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Growing demand for foreign cuisine and ingredients in India - Overview
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Thursday, 16 May, 2019, 08 : 00 AM [IST]
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Meena Patangay
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Over the last five years, we have witnessed the India food services sector evolve with the changing consumer landscape. Increased organised presence of ethnic cuisine restaurants and continued use of social media for consumer engagement are some of the key trends that will continue to shape the Indian food service sector.
While India has always been a food-loving country with each region having its own special cuisine, Indians have never been very big on eating out. But all that is changing now.
This is attributable to the fact that Indians are travelling all over the world and returning with their palates pleased and tempted by the exciting flavours and delicious foods on offer throughout the international locales.
In addition to the changing food preferences based on what other countries are serving, the evolving food habits, dual-income households, increasing health awareness, more dining-out options, and rising aspirations are all contributing to bring a tectonic shift to the Indian plate, especially in urban households.
This exploration of food outside of the conventional gamut is not only leading to the increase in the demand for foreign cuisine but also the exotic ingredients, where people are ready to play around with foreign recipes at home too.
The restaurant industry in India has been growing at a rapid pace over the last decade or so and the growth story is set to continue for the next foreseeable future.
It’s not just Indian, but also international chefs who recognise the huge untapped market and have set up high-end restaurants in the country. Ian Kittichai, the famous New York chef, opened a Thai restaurant in Mumbai called Koh in August 2010. Since he imports all his ingredients, he is able to serve his diners authentic Thai fare with a modern twist.
An interesting trend has begun and due to an increased interest in India as an investment destination, many international fine-dining chains are waiting in the wings to set up shop in India. The Indian consumer has a lot to look forward to in terms of experiential cuisine in the coming years.
It is not just traditional and local Indian flavours that are finding favour with diners, but also international cuisines. Up until a few years ago, the only international cuisine that worked for the Indian palate was perhaps Chinese. Since then, the Indian palate has grown to accommodate global cuisines.
So, we have popular London-based Hakassan restaurant serving Cantonese-style cuisine, Las Vegas’ Le Cirque serving up authentic French and Italian dishes; South African casual dining chain Nando’s famous for its peri-peri chicken; and American fast food chain Taco Bell serving Mexican inspired dishes setting up shop in India.
Besides these international chains, there are many restaurants started by Indian entrepreneurs serving global cuisines like Thai, Japanese, Lebanese, European, and popular American food. If it’s authentic traditional and international flavours that the Indian consumer is after, these restaurants ensure they get what they crave.
Industry drivers
Changing demographics: There’s a vast pool of working population in India, which includes women. There’s an upwardly mobile middle class, which is liberal and progressive. In addition to that, there’s a rapid increase in nuclear families and all of these factors contribute to the growth of the restaurant industry.
Greater spending power: India’s per capita income has been increasing steadily and this has led to an increase in the disposable income of Indians and the concept of double-income households which is the result of more women joining the workforce, which has led to an increase in the purchasing power of Indians, which in turn is driving the growth of the food service industry.
Increased exposure
More and more Indians are travelling abroad, which has increased their awareness about global cuisines. Popular food and cooking shows on television such as MasterChef have also led to greater exposure to gourmet food.
India as a travel destination: With India projecting itself as a major tourist destination to the world abroad, restaurants in the country have all the incentive to expand their range and up the level of their services to cater to a growing international market.
Infrastructure and IT development: For restaurants, infrastructure and IT development helps them control costs, minimise waste, maintain quality and so on and helps them improve their bottom-line. IT-driven business intelligence and data analysis helps them streamline their business and improve results.
Online food delivery: Entry of food delivery players such as Zomato, Swiggy and UberEats gives access to foreign cuisines at the click of a button.
The Indian food service sector with an exceptional growth is projected to grow at more than 10% over the next five years (2018–23). This can be attributed to a high percentage of young and working population with rising disposable incomes. Availability of organised retail space has also helped the industry to encourage the growth of international brands across different formats.
The imported food industry in India, growing at 22-23 per cent, is being closely followed by domesticated international foods having a growth of 14-16 per cent, while traditional products are growing between nine and 12 per cent.
At a recent knowledge session, Amit Lohani, director, Forum of Indian Food Importers (FIFI), stated, “Imported food products like breakfast cereals, savoury processed snacks, seasonings, dressings and sauces, ready-to-eat meals, and confectionery products are expected to see a compound annual growth rate (CAGR) of 19.2, 33.6, 7.9, 12.4, and 16.6 per cent, respectively, between 2016 and 2020.”
This investment by international companies like Ikea, Ferrero, Kraft, Oreos, Mondolez, Doritos and Kinder Joy brings in infrastructural advancements, vertical integration, supply chain management, cold chain and manufacturing.
While value-conscious, Indian consumers do not want to miss out on alluring foods full of international flavours but, are happy with the products manufactured in India by Indian or international brands and offer value for money.
(The author is dean, administration, and HoD, nutrition, St Ann’s College for Women Hyderabad. She can be contacted at meena.patangay@gmail.com)
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