1. 1 Launch : India Food Services Report 2016 JULY 20, 2016

2. 2 About NRAI National Restaurant Association of India is the voice of the Indian Restaurant Industry. Founded in 1982, NRAI currently represents 100,000+ restaurants, and is rapidly increasing its membership. The association in its 33rd year has a pan India presence with members comprising of restaurants, suppliers and educational institutes associated with it. NRAI is governed by a committee of members and led by a President and Office Bearers. The committee consists of over 25 Restaurant CEOs / Owners representing various national and international brands from the F & B sector. The association works closely with a network of State and City chapter partners in Mumbai, Gurgaon and Bengaluru.

3. 3 About NRAI Vision NRAI aspires to lead the Indian Restaurant Industry to greater profitable growth. We represent the interests of our members through advocacy, training, research and industry events NRAI aims to : Advocate changes in the laws governing the Indian Restaurant Industry at local, state and centre levels, Provide opportunities to educate members Play a key role in promoting skilling and career opportunities for industry professionals through the Hospitality Sector Skill Council.

4. 4 India Food Services Report 2016, 3rd Edition The objective of the 3rd India Food Services Report is to be the single, one-stop, credible source of information, identifying trends, opportunities and challenges relating to the market in India for all the key stakeholders in the eco-system. Overall, the 2016 edition of the report encompasses the following key information areas: Food Services Market – Size and Growth Key Growth Drivers and Emerging Themes Eating Out Behaviour of the Indian Consumer Impact on Allied Industries Technological Disruptions Business Models In Food Services Prospects of PE/VC Investing in India International Opportunity for the Indian Players Key Opportunities and Challenges

5. 5 Food Services, currently at ~ INR 3 Lakh Crores, is projected to grow at 10% CAGR to ~ INR 5 Lakh Crores in 2021 Food Services : ~ INR 3 Lakh Crores in 2016 Indian Railways 8x HotelsBollywood 1.6x 23x

6. 6 Organized Market One Third of the Total Organized Market’s current share of 33% projected to grow to 41% by 2021. Chain Market growing the fastest at 20%. 3% 7% 5% 3% 10% 23% 22% 28% 70%67%59% 2013 2016 2021 (P)

7. 7 Casual Dine Restaurants have the largest share Casual Dine Restaurants have the largest share ( 54%), followed by QSRs (20%) in the organized segment.

8. 8 Employing ~ 14 Mn Indians The industry currently generates a direct employment of 5.5 - 6 million people, projected to grow to 8.5 - 9 million by 2021 The industry employs another 7.5 – 8.5 million in-directly, and is projected to grow to 9.5 – 10.5 million by 2021 Offers employment opportunities at all levels, across socio-economic segments Entrepreneurial, self employing A mix of education levels and skill sets, offers opportunity to upgrade and grow

9. 9 Contribution to the Government Exchequer The chain and licensed standalone segments will contribute an estimated INR 22,000 - 24,000 Crores in 2016, projected to double to INR INR 42,000 - 45,000 Crores by 2021. The government has the opportunity to generate additional collection of INR 13,000 - 22,000 Crores through closer monitoring of tax collection from the unorganised segment

10. 10 Consumer Segmentation Views eating out as an opportunity to get together with the family. Relatively more conservative and follow a disciplined approach to eating out. Have large network of acquaintances and views eating out as a form of entertainment and social interaction. Innovative, experimental and eat out in a group. Try new restaurants and new dining concepts. Belongs to higher income households and look at eating out as place to chill and unwind. Willing to pay a premium for quality. Family Bonding SeekerFun Seeker SocializerDiscerning Urban 36%25% 15%24%

11. 11 Key Growth Drivers Technology enabling disruption in business and operating models 1 Tech Savvy Consumer – Rise of Online/ Social Media, Food Websites, Mobile Applications, Mobile wallets 2 Increasing share of delivery and take-away models, with a focus on convenience Evolving palate of Indian consumers, with new (both Indian and International) cuisines gaining market share 3 4

12. 12 Key Emerging Trends Emphasis on Regional Indian Cuisines and revival of old recipes New locations coming up, including Food Hubs, Travel, Commercial Complexes Religious tourist cities, among others Indian brands increasing presence overseas Significant interest from PE companies in the Food Services eco-system 1 2 4 3

13. 13 Market Issues & Challenges High food cost inflation Fragmented Market Increasing Competition Manpower Real Estate Fragmented Supply Chain Liquor Sourcing Over Licensing Existing High Taxes Burden of New Taxes Experimental Dynamism in Preference Unpredictable Demand ECONOMIC / MARKET FACTORS OPERATIONAL CHALLENGES REGULATORY CONCERNS CONSUMER DYNAMISM

14. 14 Suggestions & Recommendations Government should create a group to look into issues related to Restaurant Industry. Over regulations and excessive licencing to be reduced for ease of doing business. Move from licensing regime to registration regime. Reduce taxation as the same would result in conversion of unorganised players to organised segment. GST rate should not be high and to be at par with international norms. Liquor should be included in GST. 1 2 3 4 5 6

15. 15 Taxation – India vs. Singapore Tax *Tax does not include service charge 24.5% Tax 7.7%

16. Thank you