Restaurant Industry

Market Size
Rs. 75,000 Crores in CY12
Organized Segment
Rs. 10,500 Crores in CY12
Expected Annual Growth Rate
Overall: 7% Annual
Organized: 16% Annual
QSR: 21% Annual
Eating outlet
1.5 Million
Average Eating Out
India: 2 times a month
Singapore: 40 times a month

Indian Restaurant Industry | Whats On Your Menu?

The Indian restaurant industry is worth Rs.75,000 crores and is growing at an annual rate of
7%.
The industry is highly fragmented with 1.5 million eating outlets, of which a little more than
3,000 outlets form the organized segment. However, the organized segment is rapidly
growing at an annual rate of 16%. Quick service segment is the clear winner in the eating
out market with a growth rate of 21%.
Organized Segment is expected to reach Rs.22,000 crore by 2017, driven by:
Rising disposable income
Nuclear family structure
Increasing working population
Increased private equity interest

Brands By Segments
Quick Service Restaurants (QSR): Domino's, KFC, McDonalds
Casual dining restaurants: Pizza Hut, Yo! China, Sagar Ratna
Cafes: Cafe Coffee Day, Barista Lavazza, Costa Coffee

Fine Dining Restaurants: Mainland China, Sahib Sindh Sultan, Copper Chimney
Pubs, bars, clubs, lounges: Hard Rock Cafe, Xtreme Sports Bar, TGIF

Key Private Equity (PE) & Venture Capital (VC) Firms which
have invested in the Restaurant Industry
NSR: Coffee day (360cr), Adigas (200cr), Ohris (200cr)
India Equity Partners : Sagar Ratna (180cr)
SAIF Partners: Specialty Rest. (120cr), Ammis Biryani (40cr)
Everstone Capital: Pind Balluchi (110cr)
ICICI Venture: Devyani IntrnlPizza Hut, KFC, Costa (250cr)
Aditya Birla PE: Olive Bar (54cr)
Premji Invest: JSM Corp-HRC, Shiro, CPK (130cr)
TVS Capital: Om Pizza (50cr), Indian Cookery-Yellow Chili
Helion Venture: Mast Kalandar (33cr), Booster Juice (16cr)
Sequoia Capital: Faasos (28cr)
VenturEast: Goli Vadapav (26cr)
IncuCapital: Steammo (40lakhs)
Matrix India: Yo! China (27cr)
Accel Partners : Kaati Zone
For a 30-40% stake, a typical PE investment is Rs.150-200 crores and a typical VC
investment is Rs.20-30crores. Funds are used for brand building, to open new outlets,
standardize, and to expand to other
geographic locations
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The gourmet revolution in India

The market is expected to grow at a compound annual growth rate (CAGR) of 20 per cent to
touch US$ 2.8 billion by 2015, up from the current levels of US$ 1.3 billion.
Indian gourmet food industry, which is pegged at $ 1,300 million is growing at 20%
annually and could double by 2015.
The gourmet food industry is being fuelled by young urban Indians who spend as much as
40% of their income of food and keep upgrading the quality of their food consumption"

While names like Godrej Nature's Basket, Le Marche and Future Group's FoodHall have
been working in this space for quite some time now, US based The Counter and Japan's
Royce are the recent entrants in the gourmet food market in India
gourmet food connoisseurs are being fed with imported supplies of gourmet cheeses like
Haloumi, Parmigiano, Regganio, Stilton, Provolone, Feta, Gouda and counting till about 60

varieties. First press olive oils from brands like Leonardo, Cola Vita, Bertolli, Fragata are all
available
The pasta market, for instance, is growing at 20-30 per cent annually and pastas like Barilla,
De Cecco and San Remo are increasingly becoming a part of the consumer's choice.

plan an all-Italian dinners. Chances are you will find sundried tomatoes, rosemary and
zucchini much more readily available than jhinga, tori and parwal.

Washington apples, Australian kiwifruit, artichokes and dragon fruit can be spotted more
easily than Indian fruits. Gourmands pour over the meat sections to get good portions of
Australian lamb, Norwegian, seasoned bacon, chicken and ham

If market researchers are to be believed, sourcing broccoli could get easier than the desi
gobi, and sprinkling your meals with rosemary could become more common than dhaniya in
the years to come. This means all the olive oils, cheeses, meats, spices and herbs that are
used by top chefs over the world, could be available at a store next door

India's fast-food industry

Fast Food chains also known as QSR (Quick Service Restaurants) are
estimated
to grow at 30% CAGR by 2015 as compared to 10% growth estimated for
food
service sector in India.
McDonald's entered India in 1996, against the backdrop of a market
that was hesitant to try fast food and was still dependent on the "tiffin"
lunch boxes many lug to work.
Two decades later, things have changed. India's fast-food industry is
expected to double in size between 2013 and 2016, to $1.12 billion
According to the National Restaurant Association of India, 50% of the
Indian
population is eating out at least once in every three months and eight
times in
every month in bustling metros as compared to US (14 times), Brazil (11
times),
Thailand (10 times) and China (9 times). (courtesy: ASSOCHAM)

Mc Donalds and Subway are increasing their veg menus every year
incorporating
many traditional flavours. Mc Donalds Masala grill, Maharaja Mac
burgers,
Paneer wraps, Mc spicy burgers are some of their India-only offerings.
Even
Mayonnaise in Indian Mc Donald outlets is free from eggs!
Foreign QSRs are slowly entering India to cash on
the huge adolescent population, for example Krispy Kreme, Burger King,
Starbucks and Dunkin Donuts debuted the QSR landscape recently.
QSR food price ranging from Rs.100 to Rs.500 are light on pocket and
QSRs
large sized outlets, music and western food seem to lure youngsters. But
what
goes into the food and the nutritional value have been thrown outside the
window!
Also Indian traditional fast snacks like Samosas, Vada Pav, Gol Gappas,
Dabelis, Chaats, Paav bhaji whose taste is unquestionably delicious dont
have
glorified outlets
McDonald's tweaked about 70 percent of its menu for the Indian
market, according to Euromonitor. That meant staying away from beef
in a country where cows have religious significance, and appealing to a
population that tends to enjoy spicy food with options like McSpicy
Paneer and Chicken Maharaja Mac. They've also opened some 100
percent vegetarian restaurants. (That said, contrary to perceptions,
nearly 70 percent of India's population is non-vegetarian.)
The country has 356 million people between the ages of 10 and 24,
giving it the world's largest youth population, according to a United
Nations report. With more young people entering the workforce daily,
growth in the economy, a rising female work force, and increased
mobility among consumers, the traditionally difficult Indian market has
become hungry for a more diverse menu

Domino's now generates more than 17.2 billion rupees ($277 million)
in revenue, compared with $222 million for McDonald's. Domino's,
which is valued at $1.6 billion in India, has tried expanding its business
by getting Indian consumers to view pizza as a meal replacement, and
not just a snack

Dunkin Donuts entered the food market, offering fast-food sandwiches

the only
country where the chain does so."What's important for an American brand
to understand is that the Indian terrain is atypicalconsumers are clearly
most demanding, and there is too much focus on food,"

food delivery and food tech segment

The food delivery market holds a great chunk of profit. In 2013, Takeout
and delivery held an 18% market share of the fast food industry, which is
increasing since then. Theorganized food business in India is worth $48
billion, or Rs 3 lakh crore, of which food delivery is valued at $15 billion
(Rs 94,755 crore). Online food delivery niche grew 40% inthe last 12
months, which makes it the fastest growing segment of the Indian
eCommerce market.

If 2014 was the year of transport startups like Uber and Ola,2015
promises to be the year food delivery startups come of age in India.
Across major cities, entrepreneurs areexperimenting with a variety of new
business models to cater to the surging numbers of people who have little
time to cook food at home.

Food in India is a big deal,The food delivery market in India is worth $1.6
billion, growing at 30 per cent a year. But less than two per cent of the
orders are placed online. 430 million citizens out of Indias 1.2 billion
population are between ages 10 and 29, a ripe market for e-commerce

growth. The average order size is Rs. 400, and the top six cities of India
account for 40% of the market.

Late working hours and chaotic traffic is driving sales of home deliveries.
In addition, people attending late night parties and ordering food when
they get home are driving sales of 100% home delivery/takeaway.Home
delivery also works well for food operators. This type of outlet requires a
smaller space, which translates into lower and cheaper rentals and
consequently,lower capital investment (rental deposit, interiors,
furniture). In addition, ongoing operational costs (staffing, utilities, etc)
are also lower.
many consumers are too busy or too lazy to cook. Home delivery is
therefore growing fast, and faster even than going out for fine dining.
Consumers prefer clean and well-packaged food for office orders, but
dont mind messy food in plastic bags
Today, smartphones + maps + cloud + innovation are making various
logistics heavy businesses feasible for the first time. Today, online
ordering and food apps open up new methods for realtime consumer
research.

why Bengaluru and Gurgaon are attracting food-delivery activity: "Both

places have a robust migrant population that is young and has high
disposable incomes. Mumbai too might have a similar demographic but
compared to Gurgaon, it has better and more localized options of eating
such as vada pao carts
Getting the restaurant technology right was harder than cracking IIT JEE,.
What works best now is a GPRS box in the restaurant for printing orders.
Forget tablets, they just need a stone with green and red buttons, he
said. Rosy visions of ERP systems for restaurants to track supplies and
cash flow do not make sense when many prefer to operate only in cash,
and function in the black market

The food ordering industry is also subject to wild price fluctuations due to
volatility in fuel and agri markets. The average menu in India has 300
items and the prices change every 15 days, foodpanda actively does
menu updates itself, and does not leave it to the establishment to update
and display prices
Large players like IBM are exploring new opportunities by using artificial
intelligence to suggest novel recipes and spice combinations for the
Institute of Culinary Education (ICE), opening up new domains in fusion
foods.
Charging for delivery of prepared food is one kind of business model.
Another model is to send trained cooks along with groceries to prepare
meals in homes which is what CookAss.in will be launching this month in
Bangalore, says founder Sameep. We charge Rs. 30 per mouth as
cooking service charge

Brands in FOOD Delivery

Tinyowl: Launched in March 2014 by five IIT Bombay alumni, Tinyowl
operates a
mobile app on the Android and iOS that lets users order food from
restaurants aroundthem. They raised an angel round from Deap Ubhi and
Sandeep Tandon in April 2014, a $3 million Series A round from Sequoia
Capital and Nexus Venture Partners in December 2014 and the latest
round of INR 100 crores from Matrix Partners, Sequoia Capital and Nexus
Venture Partners. Their app already has more than 100k downloads in
Mumbai,and they deliver 2000 orders a day on average, more in peak
hours. TinyOwls aim is to have a very personal connection between
people and their food. Food delivery is a crucial part and the technology
play is over it where the app wants to help people make all their food
related decision.
Foodpanda: Foodpanda (in Asia and Europe) and Hellofood (in Africa,
Latin Americaand the Middle East), is a global online food delivery
marketplace headquartered in Berlin, Germany, and operating in more
than 40 countries across four continents. Launched in March 2012, The
service allows users to select from local restaurants and place orders via
the website or mobile application. Users of foodpanda/hellofood order
cuisines from more than 35,000 restaurants worldwide. The startup is

supported by Rocket Internet, the largest e-commerce incubator in the

world. It raised $20 million in funding from AB Kinnevik, Phenomen
Ventures and Rocket Internet in April 2013, $8 Million in September 2013,
$20 million from a group of investors, including Phenomen Ventures in Feb
2014, and another USD 60 Million in financing from a group of investors in
August 2014.
Tastykhana: A Pune based online food ordering delivery service startup,
TastyKhana was founded in 2007 by Shachin Bhardwaj and Sheldon and
has been steadily growing over past 7 years. Their growth accelerated
over past couple of years, after infusion of investment. In November
2011, Delivery Hero, a global firm of food ordering services, invested Rs
84 lakh in the company, which helped Tasty-Khana launch in Mumbai in
April 2012, followed by Bangalore and Delhi. Tastykhana currently boasts
of turnover of over Rs. 10 crore and has close to 10,000 restaurant menus
across 160 Indian cities.Tastykhana has witnessed 4X growth over last
year. It was acquired by Foodpanda in 2014.
JustEat: Jesper Buch founded Just Eat in Denmark in 2000 and launched
the service in August 2001. Just Eat is an online service acting as a web
based intermediary between independent takeaway food outlets and
customers. It is headquartered in the UK and operates in 13 countries
around the globe. Their latest investment includes $64 million in Series C
funding from Vitruvian Partners, Greylock partners and Redpoint Ventures
DeliveryChef: Delivery Chef is the fastest way to browse through
restaurant menus,
order food on your mobile and get quick home delivery without any
hassle. Delivery Chef brings you yummy food and incredible flavors from
the best of restaurants in Mumbai,Navi Mumbai, Pune, Bangalore, and
Delhi NCR. It was launched in 2010 by Ankita Tandon and Aditi Talreja.
Today DeliveryChef is present in seven Indian cities with over 500
restaurants in its system. They raised over INR 1 crore back in 2012.

While most offer free delivery, owing to their respective USPs they differ in minimum order and
order placement time, have a look at the table below foronline food startups.

Startup

Operations in

Order
Placement

Delivery
Time

Payment
Mode

Other Features

iTiffin

Bhojanshal
a

Bangalore

Pune

Online,
Phone

Website

Online,
Cheque,
cash

30-50
mins

COD

Daily/Weekly/ Monthl
Packages, Bulk order
orders, Corporate ord

Advance
Booking

Mumbai

Mobile App

45 mins

Online,
COD

Holachef

Parts of Mumbai

Website,
Mobile App

Advance
Booking

Online,
COD

Yumist

Gurgaon,
Bangalore

Mobile App

30 mins or
less

COD

Online,
COD

Meal Planner- 10 day

available, Nutritionist
for people following a
plan

1-3 days

Online

Introduced a fortnight
snack subscription pl

15-45
mins

Online,
Faasos
wallet

TinyOwl

Eatonomist

Gurgaon

Snackosaur

Pan India

Faasos

Mumbai, Pune,
Bangalore,
Chennai,
Ahmedabad,
Baroda

Website,
Phone

Website

Mobile App

45 mins