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The word HoReCa has its roots in Holland
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Tuesday, 02 April, 2024, 14 : 00 PM [IST]
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Dr Anitha R
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 Food is the only thing that unites us all and is, in fact, a person's most fundamental need to survive, but today, food is also a part of lifestyle. Despite India's growing urbanisation, eating has become one of the most noticeable aspects of the evolution of food consumption. In the modern era of social media, eating habits are quite important and became a culture with specific dining etiquette.
Some people eat to display their standard of living, some people go out to eat to satisfy their hunger, some people go out to eat to spend time with friends, family, and loved ones. Whatever the motivation for a visit, it eventually contributes to the expansion of the hospitality industry. HoReCa sector is one of the fastest growing markets across India. The term HoReCa was coined in 1994 by Hospitality Services in Lebanon as an abbreviation for Hotel, Restaurants, and Cafes.
Later, it established operations in Kuwait, Saudi Arabia, and Jordan. The HoReCa Concepts India was formed in 2016 by a group of hotel industry experts with more than 25 years of combined experience in the hospitality and associated industries. HoReCa Concepts India aims to quickly establish itself as one of the leading hospitality businesses in the region because of its excellent variety of brands, knowledgeable service, and affordable prices.
This is intended to provide best concepts in hospitality business. HoReCa enterprises are moving toward the cash-and-carry players as a result of the strict food laws and regulations. This review deals with the growth trends, segmentation and various factors which influences the challenges and opportunities on the market condition of HoReCa sector.
Growth of HoReCa Sector in India
Growth of hotel industry can be categorised as ancient and medieval era, colonial era (1601-1947) and modern era (1947 onwards). Most hotels in India were developed in locations that were frequented by British and Indian aristocracy before II World War. Later, few companies owned hotels in India. The Indian hotel company Taj Group, owned by J R D Tata, was the first Indian hotel constructed in an international standard in 1903.
Hospitality industry is an outgrowth of man’s urge to travel, roads and pathway used by merchants and couriers. BigBasket, an online retailer, recently stated goals to generate Rs 500 crore in revenue from their newly launched HoReCa division in 2018. In order to avoid growth hindrances from scaling up, the corporation is creating specialised distribution facilities in eight cities due to the new market's high level of attractiveness.
Over the past 10 years, a sizable number of organised food processors have emerged with the strong focus on HoReCa. The demand for higher-quality raw materials is rising in the organised food services sector as a result of the growth of the food and services industries. This leads to improved procedures and the expansion of technology. The HoReCa industry is anticipated to reach approximately US$2.38 trillion between 2021 and 2028, with a CAGR of 3.15 %.
Food services occupy a large market share in the hospitality market. The food and beverage market is growing enormously after the betterment situation from the pandemic. The popularity of the HoReCa business is influenced by the adoption of modern lifestyles and the rise in disposable income in many prominent countries. The Oyo rooms are well-liked in the Indian hotel market, and they have partnered with many other hotels worldwide. They are offering good quality and affordable accommodation in minimum budget. Kirana/resellers continue to be dominant in terms of their overall contribution to the cash and carry industry in India.
However, HoReCa is beginning to draw greater attention as a business sector though. Given the higher volumes and easier access compared to kiranas, Ankur Pahwa, partner and national leader of ecommerce and consumer Internet, India, estimates about three by fourth of the HoReCa industry is now concentrated in Tier I and II cities. This creates a significant opportunity for cash and carry players. LOTS Wholesale Solutions has been able to establish long term relationship with customers following the success of its brands.
Factors influencing the growth of HoReCa Sector
Tourism industry is one of the industries which impacts the growth of HoReCa. The movement of people and their exploration of various cuisines has an effect on market expansion. Another driver of market expansion is the young generation's preference for ordering food from restaurants, cafes, and hotels online and dining out. The foodservice market is seeing growth due to the growing number of market participants.
The market is driven by various cafés and restaurants that offer a variety of extra services to satisfy customers, creating new chances for the HoReCa sector. The possibility of eating meals away from home has increased because of people’s interest to eat outside and better spending power. This also explains why the development of food apps has rapidly gained popularity. The maintenance of cleanliness and hygiene in all areas of the food service sector as well as the price of goods are other elements that have an impact on the HoReCa sector's growth.
Future market growth will depend on how many people acquire HoReCa. The elements pushing the market towards more expansion are the drivers and opportunities. In contrast, the market is creating new obstacles that it must overcome to make a profit during the predicted period as a result of the constraints and difficulties. The HoReCa market trends are the result of several important players. Every element is taken into account when analysing the market.
Segmentation of HoReCa Sector
Hospitality industry can be classified in to hotel industry, travel and tourism industry. Hotel industry involves hotels, restaurants and contract caterers including star rated hotels, heritage hotels, budget hotels, resorts and unclassified hotels. Similarly, travel and tourism industry involves food services area such as fast-food chains, casual dining, fine dining and coffee bars. HoReCa sector is segmented in to service type and category.
HoReCa is categorised as hotels, restaurants, cafes, and pubs based on the service type. In the category segment, a single chain and a HoReCa chain split apart. The HoReCa chain recorded the highest CAGR in 2020 as a result of the extensive global network of culinary outlets. HoReCa chains are created to bridge geographic, cultural, and cuisine differences and helps to promote regional cuisine throughout the world. Because it offers a variety of things based on consumer preferences, the HoReCa is a superior market category for the HoReCa market share.
Organisations must deliver high-quality raw materials if they want to flourish in the HoReCa industry because the returns are far more attractive than those in retail. A significant food manufacturer claims that HoReCa and QSR (Quick Service Restaurant) channels employ convenience products more frequently than fine dining venues. In a nutshell, they show that India has a big underserved market that is still growing.
Current Trends and Future Scenario
The umbrella organisation for the Indian hospitality sector, the Federation of Hotel and Restaurant Associations of India, incorporates direct-weighing information to offer details on 53,000 hotels, 70 lakh restaurants, and 2.3 crore of unorganised outlets. It is expected that throughout the coming years, the typical Indian household's food budget share will increase, reaching 35.4 % by 2025. The word HoReCa, which has its roots in Holland, is often used in business contexts across Europe and Asia.
Nevertheless, as the global market keeps shrinking, the term "HoReCa" has entered American industry jargon. India's hotel business is rapidly growing, and now that foreign hotel chains are established there, the level of service in the nation has increased and new standards for excellence have been set. In the previous 10 years, there have been built three times as many hotels.At a compound annual growth rate (CAGR) of 15.1%, the size of the global hospitality business is projected to rise from $3,952.87 billion in 2021 to $4,548.42 billion in 2022.
The Covid-19 impact, which had previously led to restrictive containment measures including social isolation, distant work, and the termination of commercial activities that caused in operational difficulties, is mostly to blame for the expansion of the hotel business.The hospitality sector is projected to produce $6,715.27 billion in 2026. Over the next five years, India's hospitality industry will expand at a CAGR of 4.73 %.
The HoReCa market in India is expanding quickly, and due to the segment's attractiveness, top FMCG manufactures have launched a diversity of lines to serve this market. FMCG companies are aware of the importance and increasing their operational efficiencies at the same time to increase profits. HoReCa offers best goods for over 35 years. It is known for pan-India presence for efficient product delivery. Customers at HoReCa do not care about labels and believe that our own-brand assortment offers exceptional value because they receive the same quality cuisine for about half the price of other brands.
(The author is assistant professor, department of foods and nutrition, Muthurangam Government Arts College, Vellore. She can be reached at anithadiet2008@gmail.com)
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