Consumer food service biz to see rapid growth in India

The country's consumer food services business is expected to be one of the fastest growing industries, thanks to the changing demographic profile, rising income levels and increasing urbanisation.

According to the India Retail Report 2009, the food services industry in India is in the growth phase and offers opportunities across a variety of cuisines such as fast food restaurants, multi-cuisine food courts and home delivery.

Moreover, as per the Technopak Report 2009, growth of middle-class and rising income levels have increased the frequency of eating out in the country.

The India Retail Report further said that 100 people who go shopping, 60 eat out and 40 go out to for entertainment, of which eating is an important part.

Around 80 per cent of the population eat out at least once a month, while almost 28 per cent eat out 4-6 times in a month.

In a bid to tap this growing market, Jubilant Foodworks, which runs Domino's pizza outlet in India, and has a market share of over 65 per cent, is planning to mop up funds up to Rs 300 crore from the capital market and has filed the draft red herring prospective (DRHP) with market regulator Sebi for the same.

At present, Jubilant has around 270 outlets and plans to add further 65 across the country this year.

"The plan is to populate cities where we are currently present and also enter smaller towns. For instance, in the last 18 months, we have opened stores in 23 new cities," Jubilant Foodworks CEO Ajay Kaul said.

The reasons behind this growth in the country is largely because of demographic changes, emergence of nuclear families in urban areas, growing trend of female professionals and advent of double-income households, industry experts said.

Retail outlets have also gained popularity because of their presence at high-footfall locations such as malls, airports and railway stations, they added.

The organised segment of this food services industry has presence of some of the leading international brands like McDonald's, Domino's, Pizza Hut and has over 3,000 outlets.