In an analysis, the chambers of commerce group found the segment had been growing at 25% annually to Rs8,500cr (US$1.3bn) currently.
"Entry of various national and international players in the QSR space has significantly widened the chain market due to fast expanding middle class, urbanisation, youth spending, nuclear families and better logistics," the Assocham report said.
"About 50% of India's population eats out at least once every three months, and eight times in every month in bustling metros,” said DS Rawat, secretary general.
This compares to 14 times in America, 11 in Brazil, 10 in Thailand and nine times in China, he added.
"The QSR segment is expected to witness increased activity via market expansion and entry by various players," said Rawat.
The lion’s share of QSR takes place in metro cities and mini metros due to higher consumption, heightened consumer awareness. Key cities include Delhi, Mumbai, Bangalore, and Hyderabad.
Slowly, QSRs are now expanding into smaller cities with smaller formats, the report found, after first taking off in India two decades ago with the arrival of McDonald’s in 1996.
Many global brands have followed, either through company-owned stores, through franchisees, or a mix of both.
There are now more than 120 brands operating through over 4,000 outlets spread across the country. To withstand competition, most players have tailored their offerings to reflect local taste, price and service preferences.
This includes the provision of pure vegetarian chains in certain parts of the country, and those with separate cooking areas for vegetarian and non vegetarian food.
Haldiram’s and Bikanervala, for example, offer only vegetarian food, while McDonald’s, Domino’s and KFC provide a mix of vegetarian and non-vegetarian products. McDonald’s’ mayonnaise is free from eggs. The trade in home delivery is also booming.
Rawat also highlighted a growth in outlets offering a range of cuisines cuisines, contrary to the international model, which focuses on one product category, as is the case with McDonald’s.
By 2020 it is expected that 520m Indians, or 35% of the population, will live in urban areas, compared to the current urban population of 340m. This is fertile ground to support QSR growth, Assocham predicts.
Indian consumers are increasingly spending large sums on eating out with family and friends on weekends and holidays, further churning up a huge appetite for the QSR business.
Young and old Indians can be seen devouring billions of dollars worth of fast food at shopping malls, multiplex complexes, metro stations, and highway eateries and even in office blocks, as the eating out culture spreads across urban India, the report said.
More stories from south Asia
Consumer affairs ministry to investigate graft of food officials
Corrupt food inspectors should be put behind bars, said India’s consumer affairs minister, Ram Vilas Paswan after a sting operation was caught on television.
"Strict action should be taken against these kind of officials. As a consumer affairs minister, I will take this matter very seriously," Paswan said in an interview.
His comments came after inspectors in Uttar Pradesh were filmed in readiness to approve sub-standard product against annual bribe of Rs20,000 (US$305).
"Though [the Indian food regulator] FSSAI comes under Health Ministry, but irrespective of being under any ministry, if anyone is going to play with life of people then not only strict action should be taken but also they should be sent behind bars," Paswan said.
He indicated that he would direct his department to work with the FSSAI to investigate the case.
India driving Apac’s bottled water growth
India, along with China, will drive a boom in bottled water sales in Asia-Pacific, with annual growth at 12.21% up to 2019.
According to a report by Research and Markets, growing consumer interest in health and wellness has driven sales of bottled water in many countries in APAC. Although carbonated drinks are popular in countries such as India and China, consumers are turning toward bottled water because of the functional benefits it offers.
They have also been buying into the range of attractive options that has emerged recently, thus creating more attractive options.
An increase in government regulations to exert pressure on vendors to comply food safety laws has further boosted public confidence in the Asia-Pacific bottled water market.
However, the report states that there are still challenges, including an increase in the number of private label brands to force branded companies to reduce prices to remain competitive.
New FSSAI regulations for product approvals coming soon
India must continue to wait for new regulations on product approvals, though one government official has claimed they could come in a matter of months.
Ranglal Jamuda, secretary at the Ministry of Food Processing Industries, said the Food Safety and Standards Authority of India, the food regulator, is in the process of developing the new framework.
“In another couple of months, whatever difficulty we have in getting product approvals or diversifying products or coming out with new products to fulfil demand in the market, possibly that kind of situation will substantially change,” Jamuda said.
The FSSAI scrapped its earlier system of product approvals after a Supreme Court questioned the procedure in August. It was subsequently ordered to formulate a new system that would be less arbitrary and more workable for food companies.
Givaudan breaks ground on Pune flavours plant
Givaudan has begun construction on a new flavours manufacturing facility in Pune.
Seeing India as one of its key high-growth markets, the Swiss fragrance and flavours major is investing CHF55m (US$56m) in the plant—Givaudan’s biggest investment in India since 1998.
The new site, which is expected to open in 2018, will operate alongside the company’s other flavour manufacturing facility in Daman and provide differentiated solutions for the local market.
It is expected to employ around 100 people and boost Givaudan’s capabilities in liquids compounding, powder blending, emulsions, process flavours and spray drying in India.
Monila Kothari, regional commercial head, said: “Givaudan has a 50 year heritage of operating in India and these are exciting times for us.”
Golden rice moves to next stage of tests in Bangladesh
Bangladesh Rice Research Institute scientists are preparing to continue their research on vitamin A-enriched golden rice in confined field trials. The move comes after the team successfully completed testing in a screen house.
According to the country’s agriculture minister, Matia Chowdhury, the National Technical Committee on Crop Biotechnology has approved a request by BRRI to conduct the field trials and the golden rice variety GR-2 E BRRI dhan29 will begin tests this month.
World Health Organisation data says that one in five Bangladeshi pre-school children lacks vitamin A, as do almost one-quarter of pregnant women in the country.
Researchers say 150 grams of the vitamin-A enriched golden rice under development will be enough to supply half of the required daily intake of vitamin A for an adult.
Indian onion prices fall due to ample supply prospects
The second largest onion producer, India, has seen prices decline significantly over the last month, down 33% month on month due to ample supplies in the ongoing harvest.
Adverse weather in the main growing areas in June caused concerns over the size and quality of both the standing and the harvested crop. This resulted in prices rising sharply, by almost 62% between May and the end of July.
In reaction to rocketing prices, the Indian government has raised its minimum export price from US$425 per tonne to US$700 per tonne.
However, despite initial concerns over the size of the crop, winter onion production in is projected to reach 19m tonnes, up 1% compared to 18.7m tonnes in 2014/15.
BioGaia to enter Sri Lanka market
BioGaia has signed an exclusive agreement with Axero Associates for the rights to sell the probiotics major’s ProTectis drops and tablets in Sri Lanka.
The sale of BioGaia's Gastrus and ProDentis products will begin in early 2016.
Axero Associates’ business consists of licensing, business development, marketing, sales and distribution of a wide range of over-the-counter and prescription products across a range of therapeutic segments.
Axero markets its products towards health care professionals through a team of medical delegates.
Axero will initially launch the ProTectis drops and tablets, BioGaia’s biggest products, before moving ProDentis and Gastrus to market. Today the drops are sold in 70 countries and the tablets in 50 countries worldwide.
“We see a great potential for BioGaia’s probiotics in Sri Lanka and look forward to bringing these well documented products to our market and to a successful cooperation with BioGaia,”, said Kapila Dayaratne, Axero’s managing director.
Sri Lanka has 20 million inhabitants and a per capita income of US$3,200. The economy is set to grow at a pace of 7-8% over the coming years with a commensurate increase in purchasing power per capita.
“Asia is a market with great potential and I am pleased that BioGaia’s products will be available in yet another country here. With the reputable local partner Axero we hope for a successful launch of our key products in Sri Lanka,” said Peter Rothschild, BioGaia’s president.