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Bridging the gap between vendors & restaurants
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Monday, 17 October, 2022, 15 : 00 PM [IST]
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Samarthya Bhargava
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The revenue in the food market amounts to $866.70 billion in 2022. The market is expected to grow annually by 8.01% (CAGR 2022-2027). Approximately 33% of this is in the organised sector. This sector is growing at a healthy CAGR of 16% over the last 5 years and is likely to continue this pace of growth.
They say that India is a country of shopkeepers. And this dimension is mirrored in the restaurant industry as well with a very healthy proportion of these restaurants comprising of standalone and small chain set ups. Huge investments are being made in the front end of the industry to provide newer and newer experiences to the consumer. Locations, Infrastructure, ambience, presentation of food and so on.
However, the back end continues to be rudimentary at best. Particularly the supply chain is both fragmented and antiquated with little use of modern technology, systems and logistics. Ask any restauranteur and he will confess to being plagued by significant issues of inventory management, spillage, pilferage and over-invoicing. With the supply chain being fragmented as it is, the backend is clogged with paper work, reconciliations, delayed payments and GST.
Operationally, restaurants appoint purchase managers who use rudimentary methods of inventory management. WhatsApp and phone calls are used to place orders and to monitor deliveries. Order quantities are guesstimates and vendor management is adhoc at best.
Most branded products like beverages, condiments etc. are supplied by distributors who find the “service orientation” expected by restaurants cumbersome. They also operate in defined territories and are often unable to service multiple restaurants in a city.
In this scenario, investments in technology, organised supply chain management, aggregation of supply and demand, tools for inventory management and transparency in all transactions are the need of the hour.
There are considerable savings possible through procurement price rationalisation, inventory rationalisation, manpower rationalisation for both singly unit and restaurant chains.
Several players are eyeing this space and in the not too distant future we should be seeing these gaps getting covered in the industry.
(The author is founder and CEO at SupplyPort)
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