Indian Restaurant Industry | What’s On Your Menu?

The Indian restaurant industry is worth Rs.75,000 crores and is growing at an annual rate of 7%. The industry is highly fragmented with 1.5 million eating outlets, of which a little more than 3,000 outlets form the organized segment. However, the organized segment is rapidly growing at an annual rate of 16%. Quick service segment is the clear winner in the eating out market with a growth rate of 21%.

Organized Segment is expected to reach Rs.22,000  crore by 2017, driven by:

• Rising disposable income
• Nuclear family structure
• Increasing working population
• Rapid urbanization and consumerism
• Increased private equity interest

"Indians on an average eat out lesser than 2 times a month, compared to 40 times in Singapore. Even a small increase in this number   provides a huge market opportunity for restaurants in India."

Brands By Segments

• Quick Service Restaurants (QSR): Domino's, KFC, McDonalds
• Casual dining restaurants: Pizza Hut, Yo! China, Sagar Ratna
• Cafes: Cafe Coffee Day, Barista Lavazza, Costa Coffee
• Fine Dining Restaurants: Mainland China, Sahib Sindh Sultan, Copper Chimney
• Pubs, bars, clubs, lounges: Hard Rock Cafe, Xtreme Sports Bar, TGIF

Key Private Equity (PE) & Venture Capital (VC) Firms which have invested in the Restaurant Industry

For a 30-40% stake, a typical PE investment is Rs.150-200 crores and a typical VC investment is Rs.20-30 crores. Funds are used for brand building, to open new outlets, standardize, and to expand to other geographic locations.