|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Growth in food retail due to surge in urbanisation, regulatory reforms: 12.00 PM
|
|
Friday, 23 November, 2018, 12 : 00 PM [IST]
|
|
Sumit Kumar
|
From farm to fork, the food industry is undergoing transformation and in turn transforming the lifestyle of millions. Experience economy is the driving force for the growth of the sector. It is the experience the consumers are looking for and that is what the industry is focussed on. The exposure to evolved markets is influencing the expectations and behaviour of the consumers.
Exponential growth
The food retail and food service sectors are undergoing exponential growth on account of the surge in urbanisation, formalisation of enterprises under the Goods and Services Tax (GST) regime, regulatory reforms becoming conducive for foreign investment, the advent of technology influencing business models and bringing in efficiencies, and the increase in the spending power of the middle-income strata.
Traditionally, the food and grocery retail sector has been predominantly unorganised with local provision stores and neighbourhood shops ruling the sector. This conventional set-up witnessed a bit of evolution in the form home delivery by the shop owners to offer convenience to the customer and secure business in the market consisting of many other me-too stores.
Once, the modern-format stores could be counted on one’s fingertips. However, the number is increasing with the sector becoming organised and more local and international players entering the sector due to regulatory reforms. The sector is also witnessing consolidation through mergers and acquisitions.
Convenience, availability
By 2022, the share of modern-format hypermarts and supermarts is expected to double from two per cent to four per cent. The convenience and the availability of a wide variety of products under one roof makes grocery shopping a delightful experience.
As food retail gets more organised and structured, managing the show is an industrious task for the retailer. It requires human capital to keep the show running. You need skilled manpower to manage the floor and customers in the front; and logistics in the back end.
This transition from unorganised to organised has lead to the creation of new roles like labelling, packaging, sorting, merchandising, customer care and sales promoters.
Technology is being used to add to customer delight. E-commerce is gaining momentum in the food and grocery sector. Penetration and cheaper data has increased the usage of internet. Though discounts drive sales for the e-com platforms, the convenience of shopping and home delivery is becoming preferred choice of the working millennials.
Making the competition fierce, new integrated formats are being worked upon, which are a blend of offline formats with online for wider coverage and new customer acquisition.
Quality experience
Technology like artificial intelligence (AI) is being used to understand the customer behaviour and to build connect and engagement. This transition from a conventional kirana store to a technology enabled shopping needs investment in building people capabilities, and hence, it needs structured training to ensure the quality experience that the customer expects.
As the food retail sector is witnessing a transformation so it the food service sector. Over the last decade, there is a drastic change in dthe ining out behaviour of Indian middle-income society.
The sector has seen a surge in the quick service restaurant (QSR) and casual dining restaurant (CDR) segments.
It is valued at $52 in 2017 and is expected to grow to $85 billion by 2022. As new brands continue to come up, the existing chains are growing exponentially. As a result, the sector employs six million people which will nearly double up by 2022. The expected growth needs to be supported by skilled manpower to manage and run the restaurants.
Since QSRs are pretty much run like an assembly line to dish out food, people need to be skilled to manage the process. However, CDRs have a more personalised approach to serve customers, it too cannot survive without investing in people to serve the customers.
There is an influence of technology in the food service sector as well. There are many food delivery apps that have come up which offer the convenience and discounts to order food from your favourite restaurants.
Then there are food apps that cater to different palates. These apps are gaining popularity with the working professionals, and as a result, the demand for delivery staff with behavioural and soft skills has increased.
Both the food retail and services sectors have undergone massive transformations, which will continue to happen. The growth drivers for both the sectors have been same, and the success depends on the ultimate customer experience.
As the sectors evolve, it needs a massive investment in human capital to cater to current needs and to prepare capabilities for tomorrow. While technology will support the growth, investment in human capital cannot be ignored.
Structured training
The world over, giant retailers and food chains have invested in formal structured training to develop talent. Apprenticeships have been widely used by these giants for training as it gives on the job exposure, which is best suited for services sector.
It helps build cognitive skills which are essential at work place. Under apprenticeships, trainees can be groomed as per the needs of the organisation and the industry. Performing real work under training makes the person proficient in the craft.
For talent creation, apprenticeships works best in long rung as it is a cost-effective way to build a consistent supply chain of talent which supports future growth of the organisation.
In India, the trend of apprenticeships is catching up. Employers are realizing its benefits as it supports their growth strategy.
Organisations are investing in blending learning, which is more output focussed and creates productive work force.
On-the-job training is integrated with the classroom training session at the work place which makes the output productive.
Technology is overpowering the learning form. Augmented reality, machine learning and web technology is being widely used to make the learning impactful and create a productive workforce. In India, the trend of blended learning is catching up but in baby steps.
Formal curriculums have been prepared for all job roles to offer structured training. Apprenticeships are being supported by the government to skill youth of the country to prepare talent to support the growth of food retail and services sector. Organisations need to come forward and explore the power of apprenticeships to overcome the talent crunch.
As employers are preparing capabilities through blended learning, retention of talent is another challenge that they face. Hence talent engagement becomes an essential part of human capital strategy.
Innovative techniques
Many employers are trying innovative techniques to engage with their workforce by adding value to their livelihood. Sponsoring or subsidising higher education is one such initiative which is catching up.
Usually such benefits are offered to the upper cadre of the workforce; apprentices and employees at bottom of the pyramid are devoid of such benefits.
Offering higher education connectivity to this segment fulfills their education aspirations and enhances earning power.
Offering such benefits enable employers a continuous engagement with their workforce which leads to better business returns.
Talent creation, upgrade and retention are essential ingredients of any organisation’s growth strategy.
Food sector will have to make a conscience and continuous effort in building a consistent people supply chain to support the expected growth in the age of experience economy.
(The author is vice-president, NETAP, TeamLease Services)
|
|
|
|
|
|
|
|
|
|