India’s restaurant industry is witnessing a major transformation as some of the country’s biggest corporate giants – Tata, Birla, and Ambani – are preparing to make their mark in this growing sector. With their eyes on the rapidly expanding food service market, these industrial titans are gearing up to tap into the increasing demand for dining out, especially post-pandemic.
The restaurant industry, once severely affected by Covid-19, is now on a fast track to recovery and growth. As dining out becomes a more frequent habit for Indians, these conglomerates see a lucrative opportunity. Although details about their specific business models remain unclear, it’s evident that they aim to dominate this space by venturing into both premium and casual dining experiences.
Rapid Recovery Post-Covid Spurs Corporate Interest
During the pandemic, the restaurant industry faced significant setbacks, with many outlets forced to shut down or operate under strict restrictions. However, the market has bounced back in a big way. With the rise of eating out trends, consumer demand for diverse dining experiences has surged, prompting corporate giants to enter the organized dining sector. This is why big players like the Aditya Birla Group, Reliance, and Tata Group are now eyeing this space.
What Are Their Plans?
The Aditya Birla Group has already taken steps to expand its presence in the food and beverage sector. Through its Aditya Birla New Age Hospitality Ventures (ABNAH), the group has acquired 100% ownership of KA Hospitality, which operates popular brands like CinCin, Yauatcha, Hakkasan, and Nara. This acquisition places ABNAH in the premium dining segment. They’ve also added renowned brands like Oday and Warsaw, curated by celebrated chefs Rahul Akerkar and Mukhtar Qureshi.
On the other hand, Reliance and Tata are also setting their sights on the restaurant industry, recognizing the growing appetite for diverse dining options.
Why the Focus on the Restaurant Sector?
The growing interest in the restaurant sector stems from a few key factors:
- Rising Disposable Incomes: With rising incomes, more people prefer eating out rather than cooking at home.
- Changing Lifestyle Trends: The habit of dining out has become a social activity. According to a source from the Birla Group, people are dining out eight times a month on average, a trend that’s only expected to grow.
- Targeting the Youth: The youth demographic, in particular, is a major focus for these companies. New brands and dining experiences that appeal to younger generations are being introduced to tap into their preferences.
Which Brands Are These Groups Tied To?
Each corporate group is aligning itself with strong brands to make their mark:
- Tata Group: Tata Consumer has a joint venture with Starbucks, a brand that already has around 440 cafes in India. Starbucks has ambitious plans to reach 1,000 outlets by 2028, with a new store opening every third day.
- Reliance Group: Reliance has partnered with the British chain Pret A Manger for its India expansion. They recently opened their 13th store, with plans for 100 outlets in the next five years. Additionally, Reliance Retail brought Armani/Cafe to India, with the first location opening in Mumbai last month.
- Birla Group: In addition to their acquisition of premium restaurant brands, Birla has laid out plans to introduce new food and beverage brands, with a strategy aimed at attracting the youth and expanding into new markets.
The Size of India’s Restaurant Industry
India’s restaurant industry is massive and growing at an impressive pace. In FY24, the food service industry was valued at $65 billion. This sector is expanding at a compound annual growth rate (CAGR) of 8%.
The organized segment of the industry, which includes fine dining, casual dining, cafes, and quick-service restaurants, accounted for 35% of the total market in FY19. By FY24, this share increased to over 40% and is expected to grow to 53% by FY28, according to estimates from Noesis, a hotel advisory firm.
A Race to Capture the Organized Dining Sector
As the Indian restaurant industry grows, it’s becoming clear that the race to corporate the dining sector has begun. With big names like Tata, Birla, and Ambani entering the scene, the restaurant business in India is set to see significant changes in the coming years. Their entry into this market will likely fuel competition, pushing for more innovation and customer-focused experiences. As disposable incomes rise and more people indulge in dining out, these conglomerates are positioning themselves to be key players in the future of India’s food service industry.
