Key Trends

1. Cloud Kitchens: Food consumption behavior has been changing dramatically in

recent times. People no longer look at restaurants but they think of the food they
want to eat. Such demands are served by cloud kitchens which are restaurants
that have no dine-in and takeaway facility. It relies on food aggregators or home
delivery orders placed on a call or website. Operational costs are lower than a
typical restaurant.
2. Return to Roots: There are various restaurants which focus on international
cuisines. But there are very few restaurants that focus on native food culture.
Regional foods are being explored. Farm to table practice is going to hit the table
as local produce is given more importance over imported stuff.
3. Ingredient Players: Desire to eat home-made fresh food without spending much
time in cooking from scratch has led to evolution of new category of food tech
companies called ‘Ingredient players’. These companies deliver recipes or
ingredients designed by trained chefs at the door-step and consumers need to
follow the instruction given in the manual to prepare a fresh dish within no time.
4. Inefficient Supply Chain and Logistics: The supply chain and logistics practices
currently employed by most part of the restaurant industry are highly inefficient. It
is marked by the presence of multiple intermediaries. There is a lack of adequate
cold chain infrastructure. The food processing supply is also fragmented. Even in
the annual report for FY 2019 of Zomato, they have emphasized the importance
of clean food supply-chain for restaurants, and introducing Hyperpure was a big
step towards it. It is estimated that annually 18% of the food is wasted. Entry of
international QSR chains in India has helped in increasing standard for supply
chain practices but still there is a big gap yet to be filled.
5. Social Media and Digital Marketing: The large players especially the chains
observe 65-70% of the marketing budget being spent on traditional media and
the balance 30-35% on digital media. On the contrary, for the rest of the industry
20-30% of the marketing budget is spent on traditional media whereas 70-80% is
spent on digital media. A focused / targeted marketing campaign to a specific
 and well defined target audience is becoming more important than mass
marketing..
6. Online Delivery: Technology has relaxed the process of customers having to
travel to an outlet for eating out. Now customers can use their smart phones to
order food from any restaurant of their choice and get it delivered. Consumers
are able to save time and enjoy restaurant food at the same time. For Zomato,
their Delivery revenue for FY19 is $155m compared to $38m in FY18 (4x annual
growth). It now contributes approximately 75% to their total revenue, up from
55% in FY18.