Food & Beverage Industry K S Narayanan

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•Innovation into cuisine acceptable to masses•Growth of Indian food palate. • Increased preference for international cuisine by

increasing students, corporates exposure to global trends through TV & Travel. • Theme based cafes and restaurants taking shape

• PE firms, International companies entering India and Indian chains expanding to newer cities. • Increase in specialized cuisines and multi-cuisine • Brand expansion into smaller cities developing a

national presence.

INDUSTRY SYNOPSIS

TRENDS TAKING SHAPE

• In absolute terms, India’s food consumption is the highest composition of the Indian private consumption expenditure; being more than 60% of the retail spending in India

• The per capita food consumption is still very low at ~ 200USD as compared to ~2,070USD in US and ~3,670 USD in UK

• The organized sector, estimated at ~INR 80 Bn is characterized by professional managed outlets, organized supply chain with quality control and sourcing norms, multiple outlets and is growing at a much faster CAGR of >20%

WHY FOOD – THE INDUSTRY

Industry Trends Evolving cuisine

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TOTAL CONSUMPTION OF FOOD AND BEVERAGES

EATING OUT MARKET SIZE

Food, Beverages and Grocery Retail (INR 9,084 Bn)

Food Service Market (INR 430 Bn)

Organized Food Service Market

(INR 80 Bn)

1985 1995 2005E 2015F 2025F

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

3,9315,622

7,147

11,547

17,296

INR

Bn

., (

20

00

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s)

THE F&B INDUSTRY - MARKET SIZE

• Approximately 90% of spend on the broad category “food, and beverages.

The organized segment of the industry is ~20% of the total and growing at an annual rate of 20-25% The Unorganized segment comprises roadside eateries including Dhaabas

CAGR (2005-2015)- 5%

GROWTH OF BRANDS

FORMAT IN THE EATING OUT INDUSTRY Formats Organized Format Description Examples Penetration of

Organized players

Formal Dining Restaurants

Full service with a specific dedicated meal course, high quality décor and highly trained staff in formal attire

Spaghetti Kitchen, Copper Chimney, Noodle bar, Olive, Mainland China ,

Punjab Grill.Low

CasualDiningRestaurants

Moderately priced food in a causal atmosphere with table service and sometimes a full bar . caters to the market segment between fine dining and QSRs

Bombay Blue, Pind Balluchi, Sigree, Cream Centre, Rajdhani, Yoko

SizzlersLow

Bars andLounges

Focus on alcoholic beverages. The higher-end bars with premium pricing are referred to as lounges

Harry’s , Hard Rock Café, Chilli’s and T.G.I.F Medium

QuickServiceRestaurants

Minimal table service. Some restaurants also feature takeaway and home delivery formats

McDonald’s, Nirula’s, Domino’s, Subway, KFC, Pizza Hut and

Haldiram’s, Medium

FoodCourts

Collection of multiple quick service restaurants with a common seating area Relatively new format popularized by shopping malls, airports, hospitals and office complexes

Spoon*, Food Talk Medium

Cafes Comprises modern format beverage retailing chains including coffee bars, parlors and tea bars

The Coffee Bean & Tea Leaf (CBTL), Barista Lavazza , Café Coffee Day, Costa Coffee, Mochas, Starbucks High

KiosksA relatively new format which comprises generally Chinese food, corn, savory Indian snacks including chaat and ice cream kiosks

Gelato, Baskin Robbins, Naturals Medium

Source: NRAI 2010- White paper on the Indian Restaurant Industry* Mostly multiple restaurants aggregated by the mall developer

Target CustomerAge, Demographics, Gender etc

Define based on Need State : Purchasing Attitude, Visit Ocassion

Distinct group of people that you want to engage with

POSITIONING YOURSELF The positioning framework Simplified. • Target Customers - Consumer Segments.

Value – Perceived offering to Price. Foodie – Innovative offerings Health conscious - Healthy foods Aspirations and More………

• UNDERSTANDING THE BRAND – Competitive frame of reference Compete on categories that are different

and unique

Target Audience

Brand framework

Benefit that differentiates

Reason to believe

• Benefit - Differentiating Attributes defining the brand. Contemporary, Fun, Simple & Quick Home Delivery, Café, Lounge, Bars etc

• RTB - Reason to Believe. The guest should be Able to See,

Touch, Feel & Believe the offering.

IDENTIFYING KEY DIFFERENTIATORS • LOCATION! LOCATION ! LOCATION !

This comes out to be the major factor defining if it will make or break a restaurant. • SERVICE : Service plays a very important aspect in defining your brand and its offering. Will

people think of your restaurants as a place with “exceptional customer service?”. Prompt Response (within 24 hours) . I-pad offered by our brands to ensure quick recovery.

• PRICING : In a market like India pricing plays a key role as consumers have define value based on their experiences. You can be in the affordable segment, value segment and premium segment.

• OFFERING/FOOD SELECTION : Differentiating your restaurant on products, cuisines is quite common which can be sooner or later replicated. Innovation to taste keeping the broader aspect intact is what comes out as a winner.

• THEME BASED RESTAURANTS : Every business is based on a thought which defines the place, it could either be cuisine, theme, category. Many brands are based on themes which follow consumer needs like Buffet BBQ Nation, Global Fusion and Deli’s wherein consumer can buy products too apart from dine-in.

• HERITAGE : Some brands are built on heritage of having served and survived over decades building the RTB for consumers to choose that brand .Eg : Copper Chimney.

POSITIONING ON THE 4Ps

PRODUCT PRICE

PROMOTION PLACE/DISTRIBUTION

Snob Value

Premium

Comfort

Premium

Affordable price

Value

Exclusive

Selective

Accessible

Prestige

Fun

Tactical

Positioning Implementing your strategy

based on research and understanding of the chosen

segment using the 4Ps

COMMUNICATING THE POSTIONINGEarlier positioning could just be about location and cuisine while today it is a lot more .• Today Positioning involves a multifaceted approach

Communication through various mediums internal & external.

Constantly redefining value proposition. Innovation to keep the excitement level with minimal

budgets and using word of mouth as an effective approach.

Partnering with bloggers, retailers, banks, online food sites etc.

Review feedback for insights.

COMPETITON BRAND SPACE - Competitive Analysis: Understanding brand perception

Low

APC

Prem

ium

Hig

h A

PC

Bombay Blue

Moshes

Mia CucinaLittle Italy

Olive

Indigo

Copper Chimney

Valu

e

Contemporary

California Pizza Kitchen

Traditional

High APC has to be backed with a positive brand perception

Café Mangii

Out of the BluePali Village Cafe

McDonoalds/KFC

Pizzahut

Spaghetti Kitchen Punjab Grill

Dominos

Rajdhani

Pind Balluchi

Mainland China

Noodle bar

Soam / Swati Cafes

RAJDHANI – INDIAN POPULARIZED THE TRADITIONAL THALI TO BECOME A CHAIN OF RESTAURANTS

SUBWAY DISSECTED THE MARKET TO SERVE ONLY SUBMARINE SANDWICHES

COPPER CHIMNEY BUILT ON THE HERITAGE OF SERVING NORTH INDIAN FOOD FOR DECADES

BOMBAY BLUE – THE FUN PLACE

• What ?– We wanted to increase Pepsi consumption at our outlet

• Where ?– Bombay Blue outlets across Mumbai

• How ? – By participating with Pepsi ‘Tameez se kyun Dekhen?’ campaign– Creating special food and Pepsi combo– Creating online buzz– Contest/ merchandise give away– And In store activation to connect and engage with our Guest

T20 Menu creative

T 20 menu Outlet communication T 20 Contest

On ground activity Winners Gratified

SPAGHETTI KITCHEN – TRADITIONAL ITALIAN

• What ?– Master Class in association with

Four Seasons wine • Where ?

– Inorbit Mall • How ?

– Cooking aficionado's participated in the master class to learn more about our secrets.

– They would learn the basics of cooking, Italian recipes & secrets of getting it right at home.

THE COFFEE BEAN & TEA LEAF

• What– Like ‘happy hours’, CBTL came up

with ‘Open house’, concept where guest can get great offers within limited Time Frame

– Helped us increase off peak hour sale

• Where– Phoenix Market city, Pune

• How – Through in store activation.– Mall, Face book Page.– Emailer & SMS Blast

THANK YOU