Evolution of F&B industry and it’s future.
Updated: Nov 30, 2018
This is the Part-1 of the two part article I've written about the current landscape of F&B businesses in India.
Everyone’s a Foodie at heart and from the times immemorial since the early humans discovered fire and the art of cooking, food has always remained an integral part of culture and traditions across the world. Good food was and still is a time consuming affair and food or should we say food catering industry remained largely unchanged for centuries. Only recently has this industry started seeing major changes and revolutions.
Revolutions in the food industry:
The First revolution: Mass production
The first revolution probable happened at the beginning of the 19th century when large scale production of processed and packaged food items was made possible by industrial revolution.
The Second revolution: Food franchisees going global
Riding on the success of mass production, the second revolution was all about applying the principles of large factory production model to small scale units and designing central distribution facilities to serve multiple outlets across a city or a nation and gradually expanding to other parts of the world as well. The likes of KFC and McD are the best examples of the brands which were born out of this revolution.
The Third revolution: Rise of food delivery apps and cloud kitchens
we are in the middle of a third revolution in the food industry and its all about app based food delivery. On the face of it, online food delivery may just seem like a convenience offering but if one digs deeper- we can find food delivery businesses are solving more complex problems of logistics, data analytics and user behaviour/prediction. The Indian online food delivery market is estimated to reach a value of $1.5B by the end of 2018 and has multiple contenders competing to earn the maximum possible share of this market.
Home delivery is not a new concept, the earliest memories we have is of Domino’s pizza ads which said delivered in 30 min or free. Only brands like Domino’s and Pizza hut could invest in such initiatives courtesy their deeper pockets but in the current scenario home delivery as a concept has been truly democratized.
This democratization was made possible by two main factors.
- Evolution of technology.
- Mobile devices becoming more powerful and affordable.
So much has been the effect of technology on this space that it has given rise to a complete new ecosystem where restaurants are choosing to rely completely on online orders and thereby eliminating the need of having a physical space which had been one of the largest fixed costs involved in the restaurant/fine dining industry.
On the technology side, there are a lot of things happening when it comes to creating smooth and seamless user experiences, gathering user data and predicting the user behavior so that the customer can reach get his food delivered without spending too much time searching for things on these apps. With more and more restaurants and boutique kitchens making a beeline to get listed on these platforms, ensuring each and every one of those restaurants gets enough orders is a huge problem in itself.
For an uninitiated customer clicking few buttons and getting his food delivered at his office or home may look nothing less than a magic trick but in between this point A of placing an order on the app to the point B of getting food delivered, a lot of things are happening and a lot many cogs and systems are working in perfect harmony to deliver this awesome experience to the customer.
In the Part-2 of this article, I'll be taking up the case study of one of the market leaders of the Indian food delivery app market and deconstruct their journey on how they achieved market dominance.
Go to the part two.
Let us know in the comments,
What excites you more when you think of food delivery apps and what according to you can be further improved.