During their recent trip to India, chefs Gary Mehigan and George Calombaris of the television series Masterchef Australia, were in for a surprise. One of their engagements in the country was to judge dishes prepared by contestants at Godrej Nature's Basket gourmet stores in New Delhi and Mumbai as part of a social media campaign organized by the retailer. Over 700 participants submitted their recipes in this contest and, of these, six finalists were chosen to compete before the two chefs. Mehigan and Calombaris were pleasantly surprised to see that they enjoy a considerable fan following in India.
The popularity of these international chefs is indicative of the steadily growing interest of Indians in international gourmet cuisine. There are other signs, too. Take New Delhi's bustling INA market. Once a hub for expatriates to shop for ingredients for dishes like the French pot-eu-feu, Hungarian goulash, Lebanese kibbeh or British Yorkshire pudding, the market now attracts a large number of Indians hunting for handcrafted ham, almond tagine sauce, Swiss truffles, porcini mushrooms, Greek olives and much more.
"The gourmet retail space has witnessed rapid expansion in the last five years and is expected to grow manifold over the next few years," says Pratichee Kapoor, associate vice president for food services and agriculture at New Delhi-based research and consultancy firm Technopak Advisors. "Currently pegged at US$1.3 billion, the gourmet food market in India [including retail, cafes and restaurants] is growing at a compound annual growth rate [CAGR] of 20% and is set to cross US$2.740 billion by 2015."
Kapoor notes that retail brands such as Foodworld Gourmet, Foodhall, Godrej Nature's Basket, Mason D'Gourmet, Le Marche and Nuts 'n' Spices are vying for a big share inthe growing pie with a wide product range and premium offerings.
MORE ON OFFER
Take Foodhall from the Future Group, one of India's largest retailers. Launched over a year ago as a premium lifestyle food destination, Foodhall targets the well-travelled urban Indian consumer. The store also has a working bakery and an open kitchen to serve freshly cooked food. At present, there are two Foodhall stores -- one in Mumbai, spread over around 15,000 square feet, and another in Bangalore, which is around 30,000 square feet. The Future Group plans to open around 10 more Foodhall outlets over the next two years. These will include both large format as well as smaller satellite stores.
Godrej Nature's Basket, the retail venture of the consumer products-to-real estate conglomerate the Godrej Group, started in 2005 as a single fresh food store. In 2008, it launched a range of gourmet food items and has grown into 24 stores located in Mumbai, New Delhi, Bangalore, Pune and Hyderabad. These stores are somewhat smaller than Foodhall locations, at around 2,000 square feet per outlet. According to Mohit Khattar, managing director at Godrej Nature's Basket, the average capital expenditure is around US$70 to US$80 per square foot. Each store stocks 5,000 to 10,000 unique products depending on its size and location. "Some stores have done fabulously well from the first quarter onward but on average most stores tend to break even in the seventh to eighth quarter post launch. We are open to looking at expansion within the cities that we are already in, as well as new cities," says Khattar.
Knowing what to stock on the shelves can be a tricky proposition. While some products are driven by customer demand, there are others that Khattar and his team bet on based on their experience. "This keeps us ahead of the curve. Customers [like] to check out what's new at our stores," Khattar notes.
Organic Haus, a store that imports organic products from about 22 German and Austrian brands, is also in expansion mode. The first outlet opened a year ago in the city of Ahmedabad, the second one launched in Mumbai earlier this year, followed by a store each in Gurgaon and Pune recently. The total investment in all four stores is approximately US$3.6 million. Organic Haus is now looking at Bangalore for its next store. Besides the company-owned stores, the firm also plans to expand its presence across the country through shop-in-shop outlets and a franchise network. An e-store is also on the menu.
"We will gradually expand our offerings to include baby foods, a greater variety of gluten-free products, milk and milk alternatives, as well as snacks," says Dilip Doshi, chairman of Organic Haus. "Indian consumers are increasingly becoming health conscious and opting for organic products, [which are] recognized for their [health] benefits. This growing awareness of the importance of non-synthetic, naturally produced organic products [is] encouraging us to expand."
Health is a growing concern among Indian consumers and, thanks to the stringent international certification, imported organic products are more readily adopted by them.
Interestingly, the quinoa and amaranth grains, which were once part of the staple Indian diet but lost relevance as new food fads set in, are now back. This time, they are appearing on the gourmet shelves and capitalizing on the health craze -- even despite a steep price tag. Quinoa, for instance, is priced at US$10 for 500 grams.
Of course, gourmet by definition makes a dent in consumers' wallets. So while 200 grams of Finello mozzarella cheese costs US$60, an equivalent of the same in a popular Indian brand such as Amul costs about a dollar. And while 100 grams of Clipper organic decaff coffee costs US$18, that of Nescafe costs half that amount.
KEY DRIVERS
So why is there this new fascination with gourmet food among Indian consumers? Harish Bijoor, brand strategist and visiting professor at the Indian School of Business, notes that the trend is in line with India's growing economy. "As people rise in the pyramid of achievement and earning scales get tipped progressively, [they] rise from basic levels of wants, needs, desires and aspirations," he points out. "Food that is basic gives way to food that is not-so-basic [and] gourmet food is at the pinnacle of not-so-basic food. Gourmet food grows as an economy progresses and people start tipping upper-end income scales. India has a sizeable chunk of the population that is tipping top-end incomes -- a chunk as large as the entire population of Japan."
Bijoor suggests that gourmet food has a great future in India. "And this future does not stop at caviar and truffles alone," he says. "In the developed and developing world at large, greed is considered to be good. Gourmet food is greed driven. This greed is not crass; instead, it is a refined greed. When people [are not able] to eat too much food of low value, they look for too little food of high value. Gourmet food is best eaten in small measure."
According to Technopak's Kapoor, the increasing number of specialty restaurants in India is further evidence of the growing demand of Indian consumers and their widening culinary horizons. She notes that Indians are getting more adept at choosing their "daily bread" from menus featuring exotic dishes thanks to the increasing number of international fine dining specialty restaurants, such as Hakkasan, Le Cirque, Megu and the B Bar, that are making a beeline for India.
The Le Cirque at New Delhi's luxury hotel the Leela Palace is the first Asian outpost for the iconic French-Italian New York restaurant. The restaurant, which opened about a year ago in the Indian capital, offers a wine list that includes 80 Italian and 100 French labels, in addition to signature dishes like arancini risotto, tuna in pistachio crust and paupiette of black cod. Megu, which opened earlier this year, again at New Delhi's Leela Palace, offers a quintessentially Japanese culinary experience. Fresh seafood and many other ingredients are imported from Tokyo's Tsukiji market. Megu's wine list has over 600 labels and 60 varieties of sake from Japan. A meal for two (without alcohol) at these restaurants could cost anywhere around US$200 to US$250.
Anurudh Khanna, executive chef at The Park hotel in Delhi, has been watching the changing customer tastes closely. "Nowadays, the customers are well accustomed with and aware of the various cuisines and the rare gourmet ingredients available all across the world," he says. "They actually know their food well. For example, they want to know whether the truffles being used in their dish are summer or winter, black or white. Similarly, they are choosy about having a particular cheese in their pasta...."
Restaurants at The Park use a host of gourmet ingredients, including bratwurst sausages, foie gras, crabs beluga, edamame beans, single-origin rare Jamaican chocolates and brie de meux cheese. Until recently, Khanna had a problem sourcing most of these items, but now he has a dedicated chain of local suppliers including Global
Gourmet, Caspian Caviar and Olive Tree Trading. "The demand for various exotic cuisines and their ingredients have increased so tremendously that everything is now easily available in India across various supermarkets and departmental stores," he notes. Orga Foods in Coimbatore, Tutto Bene Delicatessen in Pune, Bon Appetit in Pondicherry ... gourmet food in India now has several addresses.
FROM REEL TO REAL
The increasing number of food shows on television is also playing a key role in refining the Indian palate. Consider TLC, a channel belonging to Discovery Network, and its impressive array of iconic hosts, such as Nigella Lawson, Bobby Chinn, Anthony Bourdain and Andrew Zimmern, among others. Currently, TLC has over 25 food shows covering all types of cuisines ranging from German and Mexican to Asian and Italian. In November, it launched Man vs. Food Nation and will soon roll out Season 2 of another food show called Jamie at Home.
"TLC introduced cuisine programming to the Indian [audience] way back in 2004. [Since then], it has gained traction and is enjoyed by [a wide range of] viewers. We launch over 10 food series every year on TLC," notes Rahul Johri, senior vice president and general manager of South Asia for Discovery Networks Asia Pacific. Johri suggests that typically consumers "want to experience in real life what they watch on television -- from fine dining to wine tasting sessions."
Avni Biyani, who is at the helm of the Future Group's Foodhall, agrees. Speaking on the sidelines of the Fine Food India Expo held recently in New Delhi, Biyani added: "We are also trying to make the consumers aware about subtle differentiators. For instance, we are importing potatoes from Holland. We tell [people] which varieties of potatoes are good for fries, for curry and for a mashed preparation. Visual merchandising in our stores is also driven by the same intent -- we stock products according to cuisines so that it is easier for people to pick up ingredients that complement each other. So the sesame oil goes in the Chinese section and the olive oil in the Italian."
Pointing out that just about 30% of business at Foodhall stores comes from expats, Biyani notes: "It may not be right to say that the palate of Indians has changed, but we can safely say that it is evolving." The Fine Food Expo 2012 saw over 150 exhibitors from developed food markets across the globe.
Recently, the German wholesale player Metro Cash & Carry also introduced an international foods section with a range of more than 2,000 gourmet food items at its wholesale outlets in Yeshwanthpur in Bangalore and Zirakpur in Punjab. The group runs 12 wholesale centers in India. "As the Indian palate is being increasingly exposed to global cuisines, the demand for international and gourmet foods is growing significantly ... hence this initiative," said Rajeev Bakshi, managing director of Metro Cash & Carry India at the launch of the section.
It is estimated that on an average, imported food produce accounts for around 10% to 15% of the total organized food retail space in India. According to a study by Technopak, dairy imports (cheese, creams and dips) grew 160% over the previous year to touch US$185 million in 2011. The second fastest growing import category is wine, having expanded 58% over the same period. The packaged food segment has grown by 45%.
NOT WITHOUT HICCUPS
There are challenges to be met, though. Godrej Nature's Basket's Khattar lists a few: Multiple licensing requirements, surging realty prices, import restrictions, constantly changing laws, the absence of good storage facilities and the Agricultural Produce Market Committee (APMC) Act. (The APMC Act impacts all retailers who sell fruits and vegetables. The Act dictates that all fresh produce must come in through the mandis or wholesale markets and not directly from the farmers to the stores.) "The low awareness regarding specialized food, not just among the masses but also the workforce, is another challenge in growing the industry manifold," adds Khattar.
Technopak's Kapoor believes that the opening up of foreign direct investment (FDI) in retail could be a game changer for the gourmet food category. "Though foreign players are keen to enter the market, the restrictions on imports and high customs duty have kept them at bay for a long time. Now with FDI opening up, we [are likely to] witness the growth of such players."
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