Rohit Raju Mhatre is the Co-Founder of Lokal Kitchen, a food-tech company focused on marketing, selling, and delivering home-cooked meals to households and offices. Rohit has close to 10 years of experience in the food industry from working with Intercontinental Marine Drive and Radisson Blu Goa to setting up his own corporate catering and school catering firm to finally setting up Lokal Kitchen with his childhood best friend and co-founder Rohit Gawli.
Crediting things to Covid-19, the food tech industry for the past 18months has grown at an unbelievable fast pace. Since the past few years, India has put efforts to accept modern changes, which has helped the food tech industry boom unexpectedly. The use of digital transactions at every small outlet in metro countries of India has shown tremendous growth in this industry. The Government of India has been focusing on the growth and development of the food processing Industry. The Government is making all the efforts possible to encourage investments in this industry through the Ministry of Food Processing Industry. Whether you visit a 5-star restaurant or a small street food joint, almost all the merchants and restaurant-owners have started accepting money digitally. Few joints have reached a technology level where the food and bar menus are displayed digitally. All that needs to be done is to scan the barcode and see the menu on your phone. Digitalizing things on an overall level has given room for improvement in food and product retailed areas.
Moreover, India’s food processing sector is one of the largest in the world. This sector is well known for its rapid growth and huge profit resulting in a great contribution to the world food trade industry every year. Due to increasing urbanization, the demand for food in India has increased in every possible way. There is now a greater demand for healthy, home-cooked meals leading to the emergence of new business models like cloud kitchen and meal subscriptions. Ordering food online has now become a habit. Earlier, food delivery charges and food taxes were some of the main reasons for not ordering more food but the pandemic has changed that perception mainly because that was the only option left and viable during such a difficult time. With an increase in urbanization and fast-paced lifestyles, there is limited time available for cooking and meal preparation resulting in great demand for home cooked meals. Also, the proportion of working people in this industry has been increasing continuously both in the urban and rural regions.
A few of the trends that have been happening and are creating greater demand in the future as well in India are as follows:
High demand for home-based food
The unprecedented turn of events witnessed last year impacted economies and businesses gravely, however, I firmly believe that irrespective of the situation, the spirit of the people of this country is hard to dampen, especially those with entrepreneurial dreams. During the pandemic we saw multiple food tech brands emerging mainly the following in mind:
- To provide healthy home cooked meals, a great alternative to restaurants
- Help support women empowerment by providing these house makers with a platform to earn, amidst the pandemic
There’s a huge need in the market for producing healthy and hygienic food that does not burn a hole in your pocket. We saw multiple food tech brands capitalizing on this concept by partnering with Home Chefs who have been individual sellers for a long time and want to increase their sales.
Most of the new age food tech company’s offer a wide range of regional and global cuisines (via multiple cloud kitchens) to facilitate eating healthy home-cooked meals. Moreover, commercially prepared dishes are commonly deemed unhealthy due to the high levels of preservatives and oil in them. Seeing the current trend, it seems obvious that increase in demand for home-based food and home deliveries is increasing rapidly.
Aggressive domestic demand of food on Pan-India level
India’s diverse agriculture climate makes it a great location to cultivate a wide range of fruits and vegetables. Being a densely populated country, the demand for a variety of food in India is too much. Moreover, Indians are very well-known for their versatility in food. India is a diversified country with a population of many religions. Each tradition and religion has its custom and taste when it comes to food, resulting in great demand for different types of spices, vegetables, fruits, etc. Due to such an increase in demand for food, farmers in India need to increase the quota of agricultural land to grow more crops or enhance productivity on existing agricultural land by adopting new methods of fertilization or irrigation processes
Increase in export opportunities
Having self-sufficiency in food grains has been one of India’s principal objectives of economic development. India has emerged as an agricultural exporter in the past decade. India is now the world’s seventh-largest exporter of agriculture products in 2013. Globally, India has become a significant player in terms of exporting rice, cotton, sugar, and meat. Keeping the current situation in mind, the demand for food products on a global level has increased tremendously thereby allowing India to export more food products. India exports agricultural products and processed foods to more than 100 countries/regions with major exports to the Middle East, Southeast Asia, the European Union (EU), and the US.
It is expected that the Indian online food industry market is expected to grow at a compound annual growth rate of 25-30 percent. A report conducted by Google and Boston Consulting Group says that the growth in this industry is expected to reach 7.5-8 billion by 2022 from 4 billion. From the start of the pandemic, few reputed online companies like Bigbasket, Lokal Kitchen’s Fresh Fleet, Grofers, Licious, etc. have evolved into efficient online food delivery platforms. This trend has helped them get new customers and has increased their profit margins. Food innovation becomes a significant step for food lovers. Not compromising on quality, they are ready to pay to make things progressive in this industry.
Lastly, the food processing sector in India is growing at an average annual growth rate of around 8.41 % between 2014-18. This industry in India is an unchanging ecosystem that is opening itself up to technological and social experiments and opportunities. Opportunities for investment in this segment are now expected to increase once the infrastructure of supply chains and distribution enhances past the challenges of Covid-19.