Analysis of the catering market in India
The relevance of research
Catering is considered a complex multi-level process that includes modern customer service technologies and certain organizational processes.
Modern catering consists of the following interrelated elements: the presentation of dishes, the design and setting of the table, maintaining the corporate style of the event
Purpose of the study
Analysis of the state of the catering market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the catering market
Content
Part 1. Overview of the Indian Catering Market
1.1. Definition and Characteristics of the Indian Catering Market
1.2. Dynamics of the volume of the Indian catering market, 2016–2020
1.3. Market structure by type of service provided in India
1.4. Structure of the catering market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.6. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive Analysis in the Catering Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Catering consumption analysis
3.1. Estimated consumption of catering per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the catering market until 2025
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian Catering Market
1.1. Definition and Characteristics of the Indian Catering Market
Catering is considered a complex multi-level process that includes modern customer service technologies and certain organizational processes.
According to the current GOST R 55051-2012 ""General requirements for catering"", the concept of ""catering"" means ""the activities of public catering organizations, which is aimed at providing services to private and corporate persons at the place specified in the contract, and selling their own products in accordance with regulatory documentation India, with the involvement of relevant performers and services.
Modern catering consists of the following interrelated elements: the presentation of dishes, the design and setting of the table, maintaining the corporate style of the event.
The fundamental reasons for the introduction of catering in public catering establishments were:
–– the desire to bring diversity to the range of services by creating a unique and competitive service;
- Expansion of the scale of the enterprise and increase in the range of consumers;
–– positive experience of catering implementation in foreign countries.
The benefits of catering include:
–– a special individual approach to all categories of customers;
–– no restrictions on the choice of venue for any event;
–– quick preparation of meals and prompt delivery to the venue of the event;
Among the disadvantages of catering, one should highlight the need for companies in an additional place (warehouse) for storing equipment, inventory, utensils, elements for decoration, as well as the fact that the costs of organizing an outdoor event are higher than the costs of a stationary event.
The structure of the catering market provides for the development of the three most striking areas and includes:
–– mass catering (serving large events and large groups of people (at least 30 people);
–– catering for a small group of people (up to 30 people);
–– vip catering (involves the use of the most modern catering technologies, including a high level of service, haute cuisine, highly qualified staff.
Dynamics of the volume of the Indian catering market, 2016–2020
According to the Catery service, before the start of the pandemic in March 2020, the main audience of catering services - about 70% - were corporate clients. Catering was popular at corporate and team building events, conferences and seminars, trainings and exhibitions.
The prolonged lockdown, a long period without banquets and other public events pushed catering services to change. Despite a significant reduction in large orders, people were not ready to give up holidays and informal meetings in a narrow circle. One of the solutions within the reorientation to B2C for a number of catering services was individual mini-sets, created in the image of buffet sets, but more varied and portioned.
Diagram 1. Dynamics of the volume of the catering market, 2016–2020, billion Rs.
Market structure by type of service provided in India
According to the Catering and Banquet Services Association (ACBS) 2021 survey, almost all companies in the Indian catering market are engaged in event-based customer service. The most frequent services in this area are private events, such as the organization of catering services for weddings, holidays, celebrations, anniversaries, as well as corporate events for employees or clients of customer companies.
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Thus, the Indian catering market is extremely vulnerable to any bans on holding mass events, since market participants are primarily focused on serving large groups of people.
Structure of the catering market by Union Territories
From the point of view of the distribution of catering in the context of federal districts, such services are in the greatest demand ...
Assessment of current trends and development prospects of the studied market
Recently, the following trends have emerged in the catering market:
the desire of catering companies to form an alliance with agencies and venues in order to develop and implement joint programs to attract and retain customers;
promotion of events with gluten-free, vegetarian and vegan dishes;
maximum mixing of dishes from different cultures (a mix of Asian and European cuisines is increasingly used);
transition to environmentally friendly products, conclusion of contracts with local farmers;
transition of events with alcoholic drinks from high to low alcohol cocktails;
responsible consumption (refusal of customers from plastic and other types of elements that can greatly affect the ecology of the planet);
demand for ""home"" catering;
restoration of the market for business events in an offline format;
expansion of catering to the regions;
exit from the market of weak and inefficient players.
Among the main prospects affecting the market under study, we note:
growth of express delivery;
expanding the geographical coverage of major network market players;
improving the quality of services provided;
promotion and development of the catering industry as a whole;
restoration of restaurant traffic with an improvement in the epidemiological situation;
keeping part of the employees working remotely.
1.6. Assessment of factors affecting the market
Consider the main factors affecting the market and, accordingly, demand.
Economic
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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Real disposable money income
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Diagram 6. Dynamics of real incomes of the population of India, % to the previous year, 2012–Sep. 2021
Социальные
Population
During 2012–2017 India's population has shown a positive trend. However, in 2018, the vector changed – the population decreased due to the natural population decline in 2016–2019.
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Increasing urbanization
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The pace of life is accelerating, there is also a tendency to change the mentality and orientation of Indian citizens towards the Western type of consumption, where catering is most developed. The positive influence of the factor.
technological
Seasonality
In the winter season, there is a peak in the activity of various corporate events dedicated to the New Year. Spring and mid-autumn is the second season. Most companies hold business meetings, presentations and seminars at this time. The third season is summer, and in summer proms, weddings, outdoor events are held. In general, seasonality has a negative effect on the market.
Technology
Unlike traditional restaurant service, in the field of catering, you have to cook food in non-standard conditions, serve a large number of people at once. The format of events is also constantly changing. Unlike a restaurant, where the dish is served immediately after preparation, catering companies have to take care of maintaining an acceptable quality of ready meals for a long time. For this purpose, special equipment for transportation is used. All this has a negative impact on the market.
Political
State restrictions
Licensing, mandatory certification and similar restrictions on the part of the state in the catering market are absent. To organize a service, it is enough to create an IP.
Tax preferences, concessional lending
In India, programs are being implemented to support entrepreneurship and develop domestic production. However, for ordinary entrepreneurs, their availability remains in question.
Concluding the assessment of the factors influencing the catering market in India, we will summarize the key ones in the framework of the STEP-analysis.
Table 2. STEP analysis of factors affecting the catering market
According to the results of the performed STEP-analysis, macro-environment factors have a positive influence on the development of the market to a greater extent, the weak force. Urbanization and the associated acceleration of the pace of life have a positive effect; orientation of Indians to the Western type of behavior, where catering is most developed; gradual recovery of real incomes of the population; GDP recovery; stabilization of exchange rates; lack of strict regulation of the industry by the state.
Analysis of sectoral indicators of financial and economic activity
According to GidMarket's calculation, based on data on the financial performance of key companies in the market, the gross margin in the catering industry in India only in 2018 was below the level of similar financial ratios in the economy of all industries as a whole.
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Table 3. Gross margin of the catering industry in comparison with all sectors of the Indian economy, 2016-2020, %
Profit before tax reflects the share of revenue that remained in the enterprise as profit before tax. Throughout the study period, the rate in the catering sector is well below the Indian average.
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For Indian companies, the normative value of the absolute liquidity ratio is in the range Kal> 0,2–0,5. In the catering industry in 2016–2018 the absolute liquidity indicator is below the normative, since 2019 the indicator has been within the normative values. In 2020, the absolute liquidity of the catering industry was 0,43 times.
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The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise. Since 2017, financial stability indicators in the catering industry have been below the normative value (10%), which indicates an insufficient amount of own working capital in the industry, which is necessary for its financial stability.
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Part 2. Competitive Analysis in the Catering Market in India
2.1. Major players in the market
The catering market in India is characterized by a low level of concentration (a large number of operators with relatively small market shares, the Herfindahl-Hirschman index HHI <1000 - a low-concentration market).
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2.2. Market shares of the largest competitors
At the end of 2020, LLC XXX...
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2.3. Profiles of major players
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Diagram 13. Dynamics of the total revenue of the largest catering market operators (TOP-5) in India, 2016–2020, million Rs.
Part 3. Catering consumption analysis
3.1. Estimated consumption of catering per capita
3.2. Market Saturation and Estimated Market Potential in India
The main factors for the further development of the catering market can be considered:
–– growth of business activity among the population of the country;
- gradual acceleration of the pace of life;
– change in the outlook of the population of the country;
–– transition to the western type of consumer behavior;
– uneven distribution of catering enterprises across India;
– underdevelopment of the premium and economy segments of the catering market;
–– undersaturation of the catering services market and low level of competition in this segment.
Despite the covid-19 pandemic, the catering market in 2020 was supplemented by new trends and, according to experts, is still far from saturation, which makes it possible to open new businesses across India. However, the segment is already well developed. There are many more opportunities for development in Indian regions.
In total, the researchers estimate the potential total revenue from the Indian catering market at Rs 700 billion.
3.3. Description of consumer preferences
It should be noted that the most popular services are organizing corporate and entertainment events, aimed mainly at increasing employee loyalty or team building. Much less often - for organizing business events, including conferences for employees and partners, presentations of new products or client parties.
Diagram 15. Requests of potential customers in the Yandex search engine, units, 2021
3.4. Price analysis
The consumer price index in the catering market was calculated by GidMarket according to official statistics on price indices for catering products and the organization of celebrations.
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As a result of monitoring the prices of market players, it was determined that the price for an event depends on a number of factors: the type of event, the number of guests, the date and time of the event, etc.
Table 13. Average prices in the catering market by Union Territories, Nov. 2021, Rs./person
Part 4. Assessment of factors of investment attractiveness of the market
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The positive factors of the investment climate in the catering market dominate over the negative ones.
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Part 5. Forecast for the development of the catering market until 2025
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The following factors also allow predicting the dynamics of the catering market volume:
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Despite the attempts of market players to maintain profits by refocusing, among other things, on the B2C segment, the pandemic had a sharply negative impact on the demand for catering services, reducing the market volume in 2020.
However, macro-environment factors currently have a positive influence of weak force on the development of the market. Urbanization and the associated acceleration of the pace of life have a positive effect; orientation of Indians to the Western type of behavior, where catering is most developed; gradual recovery of real incomes of the population; GDP recovery; stabilization of exchange rates; lack of strict regulation of the industry by the state.
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A comprehensive assessment of investment attractiveness factors shows a neutral investment climate.
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Diagrams
Diagram 1. Dynamics of the volume of the catering market, 2016–2020, billion Rs.
Diagram 2. Catering market structure by types, %, 2021
Chart 3. Structure of catering in India by Union Territories, %, 2021
Diagram 4. Dynamics of India's GDP, 2012-Sep. 2021, % to the previous year
Diagram 5. Monthly dynamics of the US dollar against the rupee, Rs. for 1 US dollar, 2016-Nov. 2021
Diagram 6. Dynamics of real incomes of the population of India, % to the previous year, 2012–Sep. 2021
Diagram 7. Population dynamics in India, as of 01 Jan. 2012–2021, million people
Diagram 8. Profitability before tax (profit of the reporting period) in the field of catering in comparison with all sectors of the Indian economy, 2016–2020, %
Diagram 9. Current liquidity (total coverage) in the catering industry for 2016–2020, times
Chart 10. Business activity (average turnover period of receivables) in the field of catering, for 2016–2020, days days
Diagram 11. Financial stability (security of own working capital) in the field of catering, in comparison with all sectors of the Indian economy, 2016–2020, %
Diagram 12. Shares of the largest competitors in the catering market in 2020, %
Diagram 13. Dynamics of the total revenue of the largest catering market operators (TOP-5) in India, 2016–2020, million Rs.
Chart 14. Catering consumption per capita, 2016–2020, Rs./person
Diagram 15. Requests of potential customers in the Yandex search engine, units, 2021
Diagram 16. Forecast of the catering market size in 2021–2025, billion Rs.
Tables
Table 1. Urban and rural population in India in 2014–2020, million people, %
Table 2. STEP analysis of factors affecting the catering market
Table 3. Gross margin of the catering industry in comparison with all sectors of the Indian economy, 2016-2020, %
Table 4. Absolute liquidity in the catering industry compared to all sectors of the Indian economy, 2016-2020, times
Table 5. Main companies participating in the catering market in 2020
Table 6. Basic information about participant No. 1 of the catering market
Table 7. Basic information about participant No. 2 of the catering market
Table 8. Basic information about participant No. 3 of the catering market
Table 9. Basic information about participant No. 4 of the catering market
Table 10. Basic information about participant No. 5 of the catering market
Table 11. Basic information about participant No. 6 of the catering market
Table 12. Consumer price indices in the catering market in India in 2016–Aug. 2021, %
Table 13. Average prices in the catering market by Union Territories, Nov. 2021, Rs./person
Table 14. Assessment of factors of investment attractiveness of the catering market
Table 15. Forecast indicators of the development of the Indian economy
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