Organised restaurant market to touch Rs28,000 cr by 2015

Organised restaurant market to touch Rs28,000 cr by 2015

New Delhi: The organised restaurant market in India may grow nearly four-fold to around Rs28,000 crore by 2015, as several foreign players like Starbucks and Burger King are looking to enter India, an industry body said.

Quoting Technopak, a consulting firm, the National Restaurant Association of India (NRAI) said the organised restaurant sector currently enjoys 16% market share in the estimated Rs43,000-crore restaurant industry.

This is likely to increase to 45% of the total pie by 2015, it said.

“Given the faster growth of the organised segment, its share of the pie will increase from 16% currently to 45%, or from Rs7000-8500 to Rs28,000 crore (by 2015)," NRAI said in its report ‘White Paper on the Indian Restaurant Industry 2010’.

The report also said that several international brands, including Starbucks, Hooters, Burger King and Grand Canyon Coffee, are eyeing India to expand its footprint globally.

According to the report, the total restaurant industry (inclusive of both the organised and the unorganised segment) is expected to grow at over 5% in the next three years and is likely to touch Rs62,500 crore by 2015.

The apex body on restaurant chains said the growth is owing to the current and new organised players, and some of the unorganised operators becoming organised.

Besides, rise in the disposable income of individuals and changing lifestyle among young Indians are some of the factors contributing to the growth of the sector.

“A large proportion of the Indian urban population has already moved into an income bracket with a sufficient amount of disposable income and has just started enjoying a lifestyle where eating out is one of the main forms of leisure," it said.

“Most multinational companies are expected to initially set up restaurants in the metro cities in order to test the waters for acceptance of their products and prices before moving on to establish restaurants in the Tier II and Tier III cities," it added.

Though it did not mention when these international brands are likely to come, it said their entry would bring in standardised “processes, procedures and technology".

“While most multinationals are expected to establish their own brands, some could also grow via the inorganic route by buying out established domestic brands," the report said.

Besides, interest by several private equity firms to invest in the restaurant space is likely to boost the sector.

The most recent private equity deal concluded was for Coffee Day Holdings, where three PE major New Silk Route, KKR and Standard Chartered private equity invested around Rs800 crore for around 25% stake in the company.