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August 3, 2022
Written By Ratna Bhushan
Large restaurants have increased the amount of discounts and promotional offers by 15-20% on their own apps compared with those offered by aggregators Swiggy and Zomato, to offset steep commissions and search optimisation fees being charged by the aggregators and reduce the dependence on them, industry executives said.
India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.
While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.
Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.
For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.
Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost.
“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services and menu customisation.
“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.
In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.
Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”
For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based meal services and menu customisation.
Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.
According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.
India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.
While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.
“We’ve grown 40% this quarter over the previous quarter, enabling restaurants to set up their own direct ordering platform; we expect to see further escalation in demand in the upcoming festive season,” said Dhruv Dewan, cofounder at Hashtag Loyalty, which operates ThriveNow.
Jubilant Foodworks, the master franchise for Domino’s Pizza in India, had acquired a 35% stake Hashtag Loyalty late last year.
Thrive charges a 5% commission and is working to increase its scale from 11,300 restaurants at present, Dewan said.
Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.
For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.
Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost. “ .
“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services .
“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.
In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.
Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”
For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.
In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based me .
Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.
According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.
Source: economictimes
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July 27, 2022
Written ByAlakananda Chakraborty
Brand’s positioning may be just below Starbucks
It is against this background that Reliance Brands (RBL) announced its strategic partnership with global fresh food and organic coffee chain, Pret A Manger (PAM).
By Alokananda Chakraborty
India may boast of the presence of several marquee international coffee chains, but none of them, with the possible exception of Starbucks, have been able to make much of an impact. The reasons are obvious; for one, India is largely a tea-drinking market, with coffee penetration still at just about 11%. Coffee remains largely an in-home consumption drink. Then there are the usual challenges of getting prime real estate at a reasonable cost and consumers’ capacity to pay. The pandemic, which disrupted food supply chains and the overall demand, delivered a body blow, leading to shutdown of around 8% of the outlets during 2021.
It is against this background that Reliance Brands (RBL) announced its strategic partnership with global fresh food and organic coffee chain, Pret A Manger (PAM). The first store will open by the end of this financial year. While RBL is tight-lipped about the pricing or positioning strategy, experts say PAM’s biggest advantage is its association with Reliance.
“PAM is a late entrant and would have been at a huge disadvantage if it went alone,” says Anthony Dsouza, executive director & country service line leader, innovation, Ipsos India.
So what does Reliance brings to the table? “Significant investment capability, real estate strength and know-how of retail. These could lead to a much higher scalability and access to the right locations,” says Angshuman Bhattacharya, national leader, consumer product and retail sector, EY India. “However, running a café chain also involves building out the right supply chains across the country, which the brand would need to build,” he adds.
Bhattacharya is bang on. The success of an F&B franchise business depends on getting real estate at the right price. Reliance can offer a tremendous advantage here to PAM. Not only does it run a very large retail business, it also owns malls.
Experts say a lot would also depend on the right pricing. Pramod Damodaran, who had relaunched Costa Coffee India in his earlier stint as COO for that firm, and is now CEO of Wagh Bakri Tea Lounge, says, “There’s a big space between the 240 and170 for a cup of cappuccino, that is, just below the Starbucks/Costa Coffees of the world.”
PAM will probably occupy that window – it is unlikely to be a premium offering for two reasons. One, PAM is primarily a sandwich chain in the UK and it’s not clear how much premium it can command for a pre-made sandwich. Two, if PAM were to take advantage of the retail footprint of Reliance and were to follow a shop-in-shop format, say, in a Reliance Trends store, it can’t afford to be premium. The positioning would be a consequence of that captive audience.
In other words, the store location will, to a large extent, determine both the pricing and positioning of PAM. Agrees Devangshu Dutta, chief executive of Third Eyesight, a specialist management consulting firm: “At the end of the day, PAM is more a quick service outlet than a cafe. (Pret A Manger means “ready to eat” in French). And the consistency of its offering comes from what is called the pre-prep.”
All PAM outlets in the UK follow the concept of “freshness of ingredients” and “quickness of service”. The hero product – the sandwich in this case – is still a convenience food, a grab-and-go item. It is prepared by a central commissary or multiple commissaries and is at the most heated or packaged at the counter. “So it is not a restaurant and it can’t charge a restaurant price,” says Dutta.
In a sense, Domino’s has perfected this model with a lot of pre-prep done at the commissary end but the actual pizza is prepared “at location” or in the store. “In this case (PAM), you are not doing that volume of work at the consumer-facing counter,” Dutta adds. And if that is the model RBL plans to replicate in the country, the positioning, by default, is mass.
“The PAM-Reliance combination is likely to be a mass market offer, with value pricing and highly localised strategy,” Dsouza of Ipsos says.
But mass or premium positioning, PAM’s entry will no doubt roil the waters. “Incumbents have to up the food game if they want to take on the might of Reliance,” says an executive with a rival brand. Beverages form a dominant part of the café industry sales. Besides food and beverages, merchandising, which is employed largely for branding, is rapidly becoming a source of additional revenue. About 60-65% of café sales come from beverages, followed by food which forms about 20-25% and about 10% from merchandise.
For one, Tata Starbucks, which witnessed a 76% growth and logged `636 crore revenue in FY22, has been working at its food menu and delivery for some time. In a recent interview to FE BrandWagon, Sushant Dash, CEO, Tata Starbucks, had said that the brand had to “re-prioritise” because of the pandemic, with innovation becoming more important to keep the brand relevant. Starbucks innovated with the menu to keep the interest level up among customers and introduced new food items and gave the existing food items an Indian twist,” he had said.
Earlier this month, Starbucks added masala chai, filter coffee and an array of bite-sized snacks and sandwiches to its menu card. Its new milkshakes will be priced starting at 275, while masala chai and filter coffee will start from190. It also introduced the ‘Picco’ – meaning ‘small’ in Italian – starting at `185.
Will that be enough? Given PAM’s strong presence in the food space, there is no denying that existing café chains in India have to tweak their food menu considerably. In other words, they will have to get out of their comfort zones.
Source: financialexpress
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July 24, 2022
By Aishwarya Ramesh
Tata Consumer Products has rolled out ready-to-cook mock meat products under the brand name Simply Better.
Tata Consumer Products (TCPL) is the latest company to enter the plant-based meat segment in India. TCPL has launched a brand called Simply Better – which includes range of ready-to-cook (RTC) products, made of plant-based meat.
The RTC range is a mix of snacking dishes and traditional Indian dishes. It includes plant-based chicken nuggets, chicken fingers, chicken burger patties and Awadhi seekh kebabs. All these plant-based products are currently available on Amazon Prime and Flipkart.
TCPL’s Simply Better products as seen on Amazon.
When it comes to multinational companies, ITC has a play in this (RTC) category. Its Master Chef range includes a plant-based burger patty, priced at Rs 630 for 300 grams. The range has both vegetarian and non-vegetarian frozen snacks and kebabs. The Incredible range also has plant-based chicken nuggets, priced at Rs 475 for 300 grams.
ITC’s IncrEdible plant-based RTC range
Compared to ITC’s offering, Tata’s Simply Better line is priced slightly differently. 270 grams of plant-based chicken nuggets costs Rs 390 and the plant-based burger patty is priced at Rs 450 for 300 grams.
According to a report by Research and Markets, the Indian meat substitutes and mock meat market is estimated to reach over USD47.57 million in value terms by the end of FY2026 and is forecast to grow at CAGR of 7.48% during FY2021E-FY2026.
Devangshu Dutta, chief executive and founder at Third Eyesight, a specialist consulting firm, mentions that the presence of Tata Consumer Products and ITC could help in increasing adoption of the category over time, since both are large players intending to scale with mainstream customers.
“However, both companies will be advertising and targeting the same cohort of customers. Additionally, the two will also be competing against the multiple D2C brands in the category,” he added.
The plant-based meat market, or smart protein market, includes D2C brands. Some of these brands are also backed and endorsed by celebrities and athletes. The Good Dot is endorsed by Olympic athlete Neeraj Chopra, cricketer Virat Kohli and his wife and actress Anushka Sharma have invested in Blue Tribe and actor-couple Riteish Deshmukh and his wife Genelia Deshmukh have invested in plant-based meat startup Imagine Meats.
Anchit Chauhan, AVP – planning, Wunderman Thompson, mentions that the plant-based industry has been built by a set of startups, and now Tata has decided to enter the segment – somewhat late.
“If you look at the e-commerce segment too, Tata entered late with Tata CLiQ, almost 10-12 years after the e-commerce category had been built by the likes of Amazon and Flipkart. But the advantage Tata has is that the trust factor will always be associated with it. It will be able to leverage that brand equity and create success out of it.”
Dutta points out that for years, the most popular plant-based meat product had been Ruchi Soya’s product – Nutrela’s soya chunks and granules (soya chunks available at Rs 499 for 200 grams and granules at Rs 250 for a kilogram). Soya chunks have been available in India since the 1980s and Dutta calls it the ‘poor man’s meat replacement’.
He says that Indians already get protein in their diet through lentils, pulses and beans, and even those who consume non-vegetarian food don’t do so on a regular basis.
“They may eat it once or twice a week. Some people who convert from non-vegetarian to vegetarian, don’t miss the taste at all. Protein isn’t a huge selling point for these products either. So, this specific faux meat segment in India is a niche market.”
Both analysts (Dutta and Chauhan) opined that Tata’s entry into the segment would not have significant impact on the way the products are priced in this category.
According to Chauhan, India is mostly a vegetarian country and the consumers who may opt for plant-based products are ones who may do so out of concern for the environment, love for animals or an overall healthier diet.
Reasons for turning to plant-based meat
“Plant-based products are essentially for non-vegetarians, who have a certain taste but are willing to give it up because they feel for the environment or animals. But that’s a very urban niche right now. If you’re a ‘woke’ urban consumer, the price point of the products may not matter,” says Chauhan.
“One of the factors for this segment to grow in India is availability. Whether it is a startup or a company as big as Tata or ITC, it has to have financial muscle to sustain growth and must be easily available to consumers. Visibility and user trials are important, especially to attract consumers who wish to make a lifestyle switch in their diet. That’s why modern retail is an important channel for these products,” Dutta adds.
Different brands in the segment right now
Dutta explains fundamental consumer behaviour and calls expansion in this market ‘tricky’, since it is difficult to get people to change their behaviour.
“This is even more the case in smaller cities and towns, where people may have a more traditional mindset. Take the example of Kelloggs – it has been in the country for almost 30 years and there hasn’t been a mass behaviour switch as far as breakfast meals are concerned.”
Chauhan adds that it is not just plant-based meat, there is now demand for alcohol-free products – which taste the same as alcohol but do not have any of the side effects that come with drinking alcohol.
Dutta mentions that people in Tier-II and III cities may not be aware of plant-based meats. This is a tricky category that requires a lot more development. “It’s possible that plant-based meats will remain an urban phenomenon for a long time.”
Source : afaqs.com
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June 30, 2022
Written By Aditya Kalra & Abhirup Roy
MUMBAI, June 30 (Reuters) – Reliance Industries (RELI.NS) said on Thursday it would open outlets of Pret A Manger in India under a franchise deal with the British sandwich and coffee chain, a first foray by the Indian firm in the country’s growing food and beverage industry.
Reliance Brands Ltd (RBL), a unit of the conglomerate that also runs India’s biggest retail chain, would start by opening branches of Pret, as the brand is known in Britain, in big Indian cities, both companies said.
RBL Chief Executive Darshan Mehta said in joint statement the partnership was “rooted in the strong growth potential” of the Pret brand, known for its organic coffee and upmarket sandwiches, and the Indian food and beverage industry.
The first outlet would open in Mumbai before March 2023 and India was expected to become one of Pret’s top three markets in three years, a source familiar with the matter told Reuters.
Pret A Manger, whose name means “ready to eat” in French, first opened in London in 1986. It now has 550 outlets globally, including in the United States and several European states. It is owned by investment group JAB and founder Sinclair Beecham.
In India, the brand will compete with Starbucks (SBUX.O), which has a joint venture with India’s Tata, and Costa Coffee, which is owned by Coca-Cola (KO.N).
Mukesh Ambani, one India’s richest men, runs Reliance, which has more than 2,000 supermarkets and grocery stores in India. Reliance also has partnerships with luxury brands, such as Burberry and Jimmy Choo.
“Reliance wants to look at retail in all its shapes and forms. Over time, they’ve realised partnerships are the way for business formats that may be difficult or slower to crack,” said Devangshu Dutta, head of retail consultancy firm Third Eyesight.
Source: reuters
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June 28, 2022
June 28, 2022
Edited by Surabhi Shaurya, India.com
The blanket ban on single-use plastic items from next month poses a challenge to cool beverages such as Frooti, Real, Tropicana and Maaza. Earlier, beverage company Parle Agro, which owns Frooti and Appy had also urged the government to extend the deadline to implement the ban on plastic straws by six months. For the unversed, the government’s ban on single-use plastics, including plastic straw, is going to be effective from July 1, 2022.
Calling the government’s decision a ‘hasty ban’, Parle Agro had said it will ‘negatively impact’ overall businesses of the industry players in the FMCG (Fast Moving Consumer Goods) and beverage segment. “While Parle Agro endorses the government-led ban on the use of plastic straws, our plea is to postpone the implementation of the injunction by six months,” the company had said in a statement.
Amul Urges Environment Ministry to Postpone Ban
Besides, leading dairy firm Amul has urged the environment ministry to postpone the ban imposed on plastic straw by one year due to lack of adequate availability of paper straws in the domestic as well as international markets. “We have written a letter to Environment Secretary on the proposed ban on single use plastic straw,” Gujarat Cooperative Milk Marketing Federation (GCMMF) MD R S Sodhi had said last month.
GCMMF markets its milk and other dairy products under Amul brand. “The plastic straw in our butter milk and lassi is attached to tetra pack. It is part of primary packaging. So we have urged the Environment Ministry to include it as part of Extended Producer Responsibility (EPR) and recycling,” Sodhi said.
Amul needs 10-12 lakh plastic straws daily. Besides, Sodhi said, the company has urged the ministry to provide local industry one year to set up dedicated facilities for producing paper straws. “Paper straws are not available in domestic market. We don’t have capacity. We are not getting paper straws in international market,” he added.
Why Are Beverage Makers Worried?
To ensure a smooth transition to environment-friendly options like the paper of PLA straws, non-alcoholic beverage makers would require at least 6-8 months.
Parle Agro said that India produces and sells around 6 billion packs of paper-based beverage cartons with integrated plastic straws per annum. The available capacity to provide alternatives like biodegradable PLA straws or paper straws by a local Indian manufacturer is 1.3 million units per day, which is much less than the actual requirement.
“Packaging companies will need to invest in the right infrastructure to accommodate the changes which will require time to ensure the alternative is appropriate and cost-effective, especially during inflationary times,” the company said in a statement, adding that currently, there is no local manufacturer who can accommodate the demand.”
How Will Ban Impact The Sale Of Cold Beverages
The supply chain of beverages sold in small tetra packs will be disrupted with the blanket ban. Moreover, the beverage makers might have to incur heavy import and logistics costs as they import paper straws to replace plastic straws.
Speaking to Moneycontrol, Devangshu Dutta, CEO of retail consulting firm Third Eyesight said, “The companies have to look at alternative solutions, which may increase the costs. It will be challenging for the companies to pass on the increase in cost to the consumer as it may dampen demand, especially given the fact that these products are priced at low price points to target a certain consumer cohort.”
Full list of items to be banned from July 1:
