Evolution Of India’s F&B Segment: A CBRE Report

New Delhi, April 5, 2018: CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, today announced the findings of its researchon the growing prominence of the Food and Beverage (F&B) segment in India. According to the report, titled – Food for Thought, over the last few years, increasing urbanization, rising disposable incomes and trends of socializing, nuclear families, and growing consumerism have redefined the way urban India’s population dines. Recognizing the opportunity and potential for growth of F&B in the country, global as well as domestic operators have redefined their offerings and have gone all out to attract the average Indian diner.

In order to get a better insight into the operation dynamics of these F&B operators, CBRE research conducted a survey among more than 1200 restaurants in key locations of Delhi NCR, Mumbai and Bangalore. Some of the key highlights of the survey are as below:

• Almost 60% of the restaurants were located on high streets vis a vis 29% in malls. This is largely due to favorable rentals on high-streets, organic expansion opportunities and limited availability of quality space in malls
• In terms of nationality, almost 82% of the restaurants were domestic standalone outlet/chains with around 18% restaurants being of international origin
• US based restaurants accounted for almost 70% of the restaurants in the international category
• In terms of location choices were divergent; while 62% of all international restaurants are located in malls; 68% of all domestic restaurants are located on high streets
• Casual dining restaurants (CDR) has been a category that has gained significant traction in the past couple of years, accounting for almost 46% of all restaurants that were a part of the survey. More than 60% of CDR’s in the survey are located on high streets.
• Indian cuisine still dominates the country’s taste palette with a 24% share, followed by multi-cuisine with a 22% share. Asian cuisine and cafes are the 3rd and 4th preferred choices of diners
• Other cuisines including Mexican, Mediterranean, Lebanese and Arabian are gaining significant traction among consumers
• Indian cuisine offerings too are evolving with restaurants specializing in Orya, Bengali, North Eastern, Tibetan, Chettinad and Awadhi cuisine. A couple of years ago, such cuisines were restricted to their region/city of origin

Anshuman Magazine, Chairman, India and South East Asia, CBRE says, “George Bernard ShawOnce said, ‘There is no sincerer love, than the love of food.’ This is true for any country in the world. increasing globalization, growing exposure to international trends and cuisines has led to India’s food and beverage segment going through a transformation in recent years. This evolution is positively impacting the real estate sector as well with allocation for restaurant spaces going up in high streets and organized retail developments.”

Commenting on the impact of F&B on the real estate landscape, Vivek Kaul, Head, Retail Services India for CBRE South Asia Pvt. Ltd. says, “Today we are seeing more space being allocated for F&B in malls, the emergence of dedicated F&B clusters, food festivals taking place, F&B pop ups, and increased allocations in commercial buildings for F&B. These developments signify the growing prominence of F&B in our retail landscape. Planning for F&B is no longer an afterthought, it is integral to the planning stages of retail developments.”

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A significant development that has taken place over the past few years has been the emergence of F&B clusters in the country. While such clusters have been in existence in the past in local markets of cities, the format has evolved in recent years resulting in the establishment of dedicated retail developments for food across key cities. Most restaurants in F&B clusters are by established domestic and international operators and these hubs boast of experimental restaurants including multi cuisine, Asian and so on. As the F&B segment grows in the country, we expect such clusters to increase and further define the segment in years to come.

The survey, conducted across Delhi NCR, Mumbai and Bangalore also highlights trends driving the F&B segment in these cities. Some of the key findings were:

Type of operation format:

Type of cuisine type in casual dining:

Split of casual dining restaurants across cities and locations:

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The real estate sector has an important role to play in the growth of the F&B segment in India. For sustainable growth, developers will need to develop F&B spaces by ensuring their strategies match with the unique requirements of F&B operators. Creating flexible/customizable spaces, making F&B integral to the planning stage of shopping centers, having an optimum mix of restaurants and increased collaborating with F&B operators are likely to play a critical role in ensuring sustainable growth.

The RE response to the F&B segment:

With the F&B space constantly evolving in the country, operators too need to be innovative in not only their cuisine but also their operation format. Some areas they can focus on include investments into increasing visibility, establishing a local connect with the catchment of operation, use of technology to enhance the customer experience and improve efficienciesand most importantly, tapping new food segments.

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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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CBRE Report – Food For Thought

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