Indians are chomping on more and more pizzas — but the success story is a subplot in the growth of the eating-out-of-home story, says Business Line (A topping performance, Business Line, Brand Line, August 19, 2010).
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| A big bite..! |
A few interesting pieces of information came out of this article:
According to the Food Franchising Report 2009, Indians consumed 3.5 million pizzas each month in 2008 as compared to 1.5 million in 2001. Americans polish off at least 100 acres of pizzas a day (that's 350 slices of pizza per second), while over 90 per cent of Britons eat pizza at least once a week. About 466 million pizzas were sold in Briton last year. The Food Franchising Report 2009 notes that 30 per cent of working singles eat out at least once a month, with a majority spending at least Rs 101-150 per outing. Urban Indians now have a meal out of home six times a month compared to 2.7 times in 2003. The report says the retail food sector in India is likely to grow to $150 billion by 2025 from $70 billion in 2008. The projections are that the size of the world food industry will be $400 billion in 2025 — clearly Indian mouths would be a big contributor to the global pie.
Thus, from a lending / investment perspective, restaurants appear to be interesting opportunities. Unlike industrial units, such food outlets, tend to get food items on credit and sell on cash, thus almost not requiring working capital. With food habits changing across the country and eating out becoming more and more an entrenched habit, food outlets are bound to increase in number as also do more business in future. Any outlet that is run on hygienic lines with a reasonalble pricing policy, would attract enough customers and can become safe bets for lending by banks and for investment by VCs.
While eating out has become more entrenched today than what it was even 10 or 5 years ago, what is causing worry is the contribution of junk food to the health issues confronting the masses today. The stress levels are quite high and even young suffer from heart attacks. Life style diseases are emerging as silent killers. The high cost of quality healthcare has made it almost unaffordable to a very large segment of the society and is a matter of deep concern with no solution in sight. While government hospitals remain a clear 'no' for the middle class population, not everyone in the country especially from the unorganised sector and the rural masses have access to mediclaim facility or quality healthcare in their areas.
It is in this context, the news that Glocal Healthcare will build 2,000 hospitals across India in five years, appeared interesting to me (Source: New venture seeks to start low-cost rural hospital chain, Mint, August 19, 2010).
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| Will Sri Damodaran & his team succeed where the Indian Governments have failed? |
Mint says that this healthcare venture could potentially redefine India’s private healthcare business in terms of cost and pricing. With former civil servants behind the show, let's hope they plug the gaps in the health care delivery mechanism that is obvious today. What is interesting is that this ambitious 'low-cost' health care venture is being funded by venture capital firms and not by the government. Maybe this is another case of tapping the bottom of the pyramid for making money.
Even as I wish this venture all the success, I hope that Government would contribute something to such projects either as a grant or interest free long term loan so that borrowings are kept at reasonable levels and the final healthcare cost for the rural masses remain at an affordable level.
