Appetite for new cuisines and tastes keeps India’s restaurant scene busy

Rebecca Bundhun April 23, 2016 No Comments

Appetite for new cuisines and tastes keeps India’s restaurant scene busy

GoogleKayvan Shoaye RadkayvanshrHi-Tech Development Group LLCAppetite for new cuisines and tastes keeps India’s restaurant scene busy2016-04-23 12:00:03Author Google+ Page

Boman Kohinoor, 93, owns a historic restaurant in south Mumbai called Britannia & Company.

The eatery, which serves Iranian and Parsi cuisine and has simple décor, based in an old business district lined with British architecture, was opened by Mr Kohinoor’s father in 1923, the year that he was born.

Mr Kohinoor has seen Mumbai’s restaurant industry evolve over the decades, as the majority of the city’s Irani’s cafes, once in their hundreds, have closed down. In recent years, brands including McDonald’s, Starbucks, and Domino’s have rapidly multiplied across the country and trendy restaurants serving gourmet cuisine are continuing to grow in popularity.

    “I’ve seen bad days, I’ve seen good days, I’ve seen better days, and so it goes on,” says Mr Kohinoor, before taking a sip of chai. Food prices and other high operating costs, including taxes, have hit his business and he has been forced to raise his prices. He wonders how long he can stay afloat in a fiercely competitive market.

    Mr Kohinoor gained worldwide media attention this month when he was invited by Prince William, the Duke of Cambridge, and Catherine, the Duchess, to meet them at the Taj Mahal Palace Hotel during their visit to India, which has resulted in a 15 to 20 per cent increase in business. But he is not sure how long this will last and he fears he could end up having to shut down in a year or two.

      The restaurant scene in India is rapidly developing. New restaurants are constantly opening as businesses try to capitalise on the country’s rising wealth and a burgeoning young and better-travelled population. India has long been dominated by unbranded eateries, mainly serving North Indian and South Indian food. But there is an ever-growing appetite for the big-name chains and both international and homegrown cafes and hip casual dining outlets.

        India’s restaurant “industry is one of the most vibrant industries that has seen unprecedented growth in the recent past and continues to expand rapidly”, says Arbind Prasad, the director general of the Federation of Indian Chambers of Commerce and Industry (Ficci).

        The food and beverage services market in India is worth more than 2 trillion rupees (Dh110 billion) and is expected to grow to 3.8tn rupees by next year, according to a report by Ficci and Grant Thornton.

          And there are many more opportunities for Indian and international chains, given the potential of the market, experts say.

          “Indians are decidedly eating out more because of the ongoing socio-economic changes that India is currently witnessing,” says Anurag Katriar, the executive director and chief executive of deGustibus Hospitality in Mumbai, which owns the Indigo brand, a chain that has expanded across the city as its gourmet European dishes and ambience have made it popular among well-heeled individuals in Mumbai. “Indians in big cities have higher disposable income as both partners are working. Furthermore, Indians are travelling the world now and have become more discerning.”

            He is excited about the changes that are taking place in the eating-out scene in India as the options become more sophisticated.

            “There are international brands and celebrity chefs setting shop here, and some of the traditional players are also becoming trendier,” says Mr Katriar. The maximum action is taking place in the casual dining market, where the average bill is sub-1000 rupees per head. Serious fine dining is not in vogue right now, though it is still holding a healthy position in the overall market mix.”

              Attaining profitability is often hard for restaurants in India. But food inflation has been easing recently.

              “After two years of downturn, the restaurant sector showed signs of revival in [the financial year to March 2016],” says Amit Kadoo, a vice president at Avendus Capital. “Even though the margins are yet to rise to the 2011-12 and 2012-2013 levels, they have shown signs of revival.”

              Private equity investments into the industry have been “slow”, he adds, partly because investors have not made good returns in the past and because it can be difficult to scale up brands in India because it is a fragmented market.

                “Also, beyond the top six to seven cities, the customers are very value-conscious and are not willing to pay more than the local options available,” says Mr Kadoo.

                High food costs, increasing competition, expensive real estate costs, finding good quality staff, steep taxes and securing licences are some of the biggest issues, says Riyaaz Amlani, who is the president of the National Restaurant Association in India and the chief executive and managing director of Impresario, an Indian hospitality company behind a number of popular casual dining restaurant brands including Smoke House Deli and Social.

                  Hari Kotian, a restaurateur in Mumbai who owns DP’s Fast Food, as well as being a partner in Chinese and seafood restaurants in the city, says many eateries go out of business as they struggle to manage costs.

                  “The profitability of restaurants is not as great as seems from the outside,” he says.

                  But this does not seem to be deterring individuals and companies from setting up restaurants in India.

                  Saransh Goila, a chef and television personality, says that the youth are driving the expansion trend. More than half of India’s population is under the age of 25.

                    “They all want to capture the youth’s attention because they believe that the youth have the willpower to spend,” says Mr Goila.

                    The number of restaurants opening in India is “crazy”, with an average of 10 eateries launching every day in Mumbai alone, although many of these end up shutting down, he adds.

                    “I see people from the finance sector leaving their jobs, people from the marketing sector leaving their jobs and coming out and saying that they always wanted to be a restaurateur or always wanted to be a chef.”

                      He says that following a trend of developing European restaurants in India a few years ago, there has recently been a shift towards modern, fusion Indian restaurants with “a chef’s touch” and multi-cuisine gastropubs, which have been proving popular in major cities.

                      “Asian food has done really well,” he says. “It used to be restricted to Chinese at one point of time. Now it has moved on from Chinese. Now you’ll see a lot of Thai, Vietnamese, Japanese.”

                        Oriental cuisine appeals to the Indian palette because of the spices used, he believes.

                        “You have large chains propagating Indian cuisine, like Mamagoto is, and then you have international names such as Hakkasan and Yauatcha, which are doing really well. There is space for authentic Asian food as well.”

                        But the population still predominantly has a taste for Indian food, he says. Fast food chains in India serve items geared towards the Indian market, with McDonald’s and KFC offering a range of vegetarian and spicy foods on their menus.

                          Rishi Neoge, the general manager of the Howard Johnson hotel in Bangalore, a city with a vibrant eating out scene, says that “Indians have started developing palette for different cuisines and tastes, hence they are ready to spend money on a meal out at a restaurant”.

                          According to Sandeep Pande, the director of culinary at Marriott’s Renaissance Lucknow and Fairfield Lucknow hotels, “angel investments for startups, new and better international chains coming into India to test waters and take advantage of the ever expanding Indian economy”.

                            But Mr Kohinoor is uncertain what fate the future has in store for his Britannia restaurant. He is hoping it will survive, as it has managed to endure all the changes that have taken place around it over the past nine decades.

                            “Man comes and man goes,” Mr Kohinoor says. “Business goes on.”


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