NRAI Report 2016 Names Bengaluru The Fourth Fastest Growing Food Service Industry

According to a report by the National Restaurants Assocaiation of India, Bengaluru – India’s silicon valley – is the second fastest growing major metropolis in the country, and the fourth fastest growing Food service industry, after Delhi, Mumbai, and Kolkatta. The employment generated by food services in the city, in both the organized and unorganized segments, is a whopping 2,15,000 people!

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When it come to the food service sector, Bengaluru being the perfect blend of new versus old is one of the main reasons why this sector has seen an exponential growth over the last few years.

Challenges Faced By The Food Service Industry

There are still several issues dampening the spirit of the sector. Until recently, the closing hour for bars and pubs was 11:30pm. However, after a lot of discussion, the NRAI Bengaluru chapter was able to bring change and as of July 2016, , to the joy of the food service sector, the deadline was extended to 01:00am.

The other challenges that Bengaluru’s food service sector faces include the recent ban on plastics, and the ambiguity in rules and regulations of the local Municipal Corporation for the restaurant industry. 

Apart from these, the industry is affected by existing acts such as the Cigarettes and Other Tobacco Products Act and Noise Pollution Acts. 

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The Door To New Opportunities

Challenges apart, this is an exciting time for investors to be in the Food & Beverages sector because of the young and demographically diverse population that comprises of students, single working professionals and nuclear families.

Statistically, Bengaluru has one of the highest eating-out and ordering-in frequencies in the country and averages a montly expenditure of Rs 5,500-5,750 per household.

Also representing the strong cosmopolitan culture of Bengaluru is the diverse cuisine mix of the city which makes it a great time for new start-up ventures to cash in on the trend.

The Statistics

With respect to Bengaluru’s food services industry, the report highlights that the city’s organized food service market  is Rs 7,870 crore 8 per cent of the total Indian organized market while the unorganized market holds around 33 per cent share and is valued at Rs 3,870 crore.

The chain market in Bengaluru is estimated at Rs 2,855 crore, which is 14 per cent of the overall chain market in the country and is dominated by Casual Dining Restaurants (CDRs), contributing to Rs 1,205 crore (43 per cent) of the city’s chain market followed by Quick Service Restaurants (QSRs) at Rs 1,070 crore (38 per cent).

Again the Organized food services market is dominated by CDRs. The market size of CDRs in the standalone market is estimated to be Rs 2,770 crore (55 per cent) followed by Pubs, Bar Cafes and Lounges (PBCL) segment with 19 per cent market share.

The organized food services market in Bengaluru is estimated to contribute Rs 800 crores to Rs 900 crore as taxes. An additional tax contribution of Rs 250 crore to Rs 300 crore can be added to the same by conversion of around 30-35% of the unorganized segment to the organized.

Developments in the Restaurant Industry in Bengaluru 

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In the report, NRAI Bengaluru Chapter Head, Ashish Kothare has highlighted the number of trends that Bengaluru has witnessed in the last couple of years. From a range of food walks, farm-to-fork establishments, and pub crawls, to molecular gastronomy and regional cuisines, Bengaluru has emerged as India’s melting cauldron. However, beer remains the city’s choice drink which has led to the number of microbreweries opening-up giving beer lovers a plethora of choice in artisanal beer.

“The food industry does robust business catering to tourists and locals alike and despite the challenges, Bengaluru Foodservice sector has come up trumps,” he concluded.

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