WITH a growing number of Indians, especially the young in metros and other major cities, leading fast-paced lives and spending long hours at work, demand for food sold by quick service restaurants (QSRs) and even makers of snacks and cereals is soaring.

Hundreds of thousands of working couples in major cities can be seen slogging it out at their offices. While they earn handsome salaries, many have had to move out of joint families to cities where couples live in smaller apartments and often far from work.

The long work hours are aggravated with the enormous time it takes to travel to office and return home. In cities like Bangalore, Mumbai, Delhi, Hyderabad and Kolkata, people have to spend hours on the roads, dashing all hopes of working folk preparing food at home.

In Bangalore, for instance, travelling four to five hours a day to work and back home is not unusual.

And in cities like Bangalore and Delhi — unlike say Mumbai or Kolkata — the unorganised food sector does not have an overwhelming presence so office-goers are increasingly getting used to fast food churned out at the QSRs operated by the multinationals.

After spectacular growth, fast food majors saw a steep decline in sales. The last few months, however, have seen a revival in their business and all leading players are reporting healthy growth

QSRs are led by American majors including McDonald’s, Domino’s Pizza, KFC and Pizza Hut, though many players from other parts of the world have also entered the business.

But after spectacular growth witnessed about four years ago, fast food majors saw a steep decline in sales, especially after demonetisation of the Indian rupee. Last year was horrendous for the growth of these QSRs and many had to shut down outlets.

The last few months, however, have seen a revival in their business and all leading players are reporting healthy growth. McDonald’s and Domino’s have each reported a 25 per cent expansion in ‘same store sales growth’ (SSSG) this year, and others, including Pizza Hut, have also seen double-digit growth.

Estimates are that McDonald’s would have seen a hefty 30-plus per cent growth in 2018, while Domino’s and Pizza Hut might clock in growth of between 20pc and 25pc.

Of course, the American giant, that entered India more than two decades ago, is still not making profit in the country. In 2016-17, it reported a loss of more than Rs3 billion, especially after the bitter fight with Connaught Plaza Restaurants, its former franchisee for the north and east.

Both McDonald’s and Connaught Plaza are battling it out in the courts, and the American major had to sharply reduce its network of outlets in the country.

The American fast food majors have also realised that it requires a lot of effort to woo young Indians to their outlets and merely selling stuff that does well in the west and other parts of the world will not get them the business they are desperately seeking in India.

Both McDonald’s and Domino’s have in recent months launched dishes that satisfy Indian tastes and have also given ‘desi’ (local Indian) branding. In fact, Domino’s is also offering all-vegetarian dishes in Gujarat, where many consumers do not take non-vegetarian items.

INTERNATIONAL food majors including Nestle and Kellogg’s are also witnessing an upsurge in demand for their products in India. Nestle of course faced major problems in 2015, more than a century after it set up shop in India.

The national food safety regulator banned the sale of its hugely popular Maggi noodles, which had an 80pc market share in the country, on grounds that it had lead and monosodium glutamate in excess of the permissible limits. About two years ago, Nestle reintroduced Maggie noodles and today has an over 60pc market share.

And the company is now looking beyond noodles. According to Suresh Narayanan, chairman and managing director, Nestle India, it is now projecting itself as “a breakfast company” in India.

India’s breakfast cereal market is expected to top Rs26bn by 2020, up from about Rs14.5bn in 2015. Currently dominating this market is Kellogg’s, which has more than a 30pc share.

The company has been clocking double-digit growth rates in India since 2010. And fuelling this growth is the rapid change in the breakfast habits of Indians, especially in cities.

Looking at the surge in demand for its products, Kellogg’s is reported to be in talks with leading Indian snack-maker Haldiram’s for a major alliance.

While the two companies are still tight-lipped about the talks, sources say that Kellogg’s wants to diversify into ethnic Indian sweets and snacks, in which Haldiram’s is a leader.

Haldiram’s maintained a low-profile in India for several years, but of late has been raising its market presence. The Haldiram group has a turnover of more than Rs40bn and a growing international presence around the globe.

Unlike international brands that have carved a strong niche in only a handful of items in India, Haldiram’s has a major presence in chips, ‘namkeens,’ and other items that are extremely popular in the cities.

Smaller Indian players are also unveiling major expansion plans to take on the international biggies. Kwality Dairy, a processor of dairy products, plans to set up a second plant focused only on breakfast cereals.

The company aims to take on Kellogg’s across India over the coming years. With the Indian cereals market expanding at a hefty nearly 30pc annually, Kwality aims to more than double its turnover in just about two years.

And like Haldiram’s, it also has a growing presence in Asia and Africa and hopes to expand operations in other parts of the world over the coming months.

The QSR, cereals and snacks market in India had been largely untapped for decades, though demand for such food was always evident in the large cities.

The proliferating brands, both national and international, are today wooing millions of consumers with mouth-watering delicacies, though thanks to the concerns raised by many, they are also focusing on ‘healthy’ and ‘safe’ items.

Published in Dawn, The Business and Finance Weekly, November 19th, 2018