Innovation: The Driving Force of Food Retail in India
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The word innovation, by definition, refers to a new idea or imagination in the form of a method or device. It is also often thought of as the application of feasible solutions for newer requirements or existing market needs. This is, however, not merely limited to products, and can be applied in the case of food retail, in areas of quality control, technology, consistency, efficiency, people, and even institutional changes.
According to industry reports, food processing is one of the biggest sectors in India, in terms of production, consumption, export, and GDP growth. In fact, India has even overtaken China to become the most favourable market for retail expansion. Owing to a change in the consumer’s lifestyle and consumption patterns, the future of the F&B sector is definitely looking bright. And with support from the Government, food processing is expected to be a key factor in bridging the gap between demand and supply. However, the true test of the industry’s growth will solely depend on its ability to invest, organize and innovate, in order to deliver high-value products to customers.
And in the case of the food retail industry, innovation is now about designing an experience that’s remarkable and creates value to keep the discerning customer of today engaged. As a result of the insane growth of social media, and e-commerce, today’s shopper is much more critical and has very high expectations. As players in the food retail industry need to understand the role the buyer plays in our strategies for innovation. Great customer service, impressively quick responses, ease and flexibility, nifty tools, and a plethora of choices have contributed to the growth of the sector. It would be safe to say then, that the increased use of technology and digital mediums has been a driving force behind innovation in the food retail sector. Many Indian players are making optimum use of new technologies to increase production, meet quality standards and increase profitability. And in return, the market has provided us with a lot of opportunities in recent times to facilitate the adoption of such technologies. Be it food exploration, reservations, discovery, delivery, and feedback, technology has infiltrated the sector like never before.
As a result, online food and grocery portals have gained popularity across the country, especially in metros, with Mumbai topping the charts, followed closely by Delhi and Kolkata. And this has only brought about increased competition among companies and encouraged brick and mortar restaurants to go online and follow and omnichannel model of business. This omnichannel strategy focuses more than mere selling of products and services and engages the end buyer to empower them and create an unforgettable experience.
A 30 Degree Experience
Food retail has reached a definition beyond just the service and the food. With more and more outlets opening to offer not just local cuisine but also the culture and vibrancy of the place, a 360-degree experience has become essential in the industry. Innovative ways to provide such experiences have been noticed in multiple outlets across airports. What they offer is a way to experience the city in a small pocket of the airport itself. This comes as a boon for travellers who use connected flights for their trips. Without having to step out of the convenience of airports, they are able to experience local culture and cuisine.
A big part of this experience is also the changing dining habits of consumers. The expectation of quick service has become a driving factor behind innovation in the food retail industry in India. To meet this demand, Quick Service Restaurants (QSR) has been set up at locations with high footfalls such as railway stations, airports and even national highways. This travel retail segment as it is known as has evolved from a cottage industry of sorts to a multi-billion dollar market, which is growing at unprecedented levels.
The New Concept
Another important innovation that has now made its way into the India Food Retail sector is the concept of lounges at prominent transport hubs. These lounges have a three-pronged benefit to the industry and its stakeholders. To consumers, the lounges offer a superior user experience and a feeling of being part of something special and unique. To the airports, the establishment of premium lounges such as the ones in Mumbai airport has led to a boost in their reputation and significant upside in their business. Lastly, to the airlines, what lounges offer is a way to create a sense of customer loyalty with their passengers and an opportunity to outsource such secondary parts of the business to specialists.
The organized food retail market has come a long way in India, be it with innovations in technology, newer business models or the demand for gourmet and organic products. And as we move forward, it is clear then that innovation will definitely be at the center of the growth of food retail in India.