The Rise of Ethnic & Regional Cuisine in India : A lucrative Market Opportunity

Introduction:

Ethnic eateries and regional/ localized cuisines restaurants are picking pace in India. In the past, it largely meant Punjabi dhabas offering rotis & butter chicken, south Indian cafes offering idlis and dosas and traditional Marwari Basas with unlimited thalis. 

However, over the past 10-15 years the concept has greatly evolved backed by rise in inter-state migration, increased spending power, technology enablement and growing awareness about nuances of other cultures. 

Whether it’s a Bengali employed in the IT sector in Bangalore or an Andhra man working in a unicorn retail start-up in Gurgaon, the love for their own regional cuisine remains unaltered. Even living far off from their home state, a Bengali will crave for authentic fish curries, Chicken Kosha, traditional Kolkata biryani, devils & cutlets, luchi, aloo dum, etc. Similarly, the Andhra Guy no matter how much he likes the pindi chole and butter chicken, his love for traditional thalis, Hyderabadi Biryani, chicken fry, chicken 65, rasam, remains unaltered. 

This means there is plenty of potential for ethnic eateries to thrive in other territories apart from core markets. To get the food of their choice, many would even be willing to pay a premium. 

Consequently, we are seeing a huge jump in regional style fine dining restaurants, casual dining spaces and cafes, upscale eateries, etc. Numerous branded chains have emerged specializing in various ethnic cuisines such as Andhra, Karnatic, Maharashtrian, Gujrati, Keralite, Goan/ Coastal, Bengali, Bihari, North eastern, Nepalese, Kashmiri, etc.

Likewise, hyper regional/ localized food outlets and restaurants are also on a rise such as North Karnatic, Chettinad, Amburi, Bengali Mughlai, Awadhi, Konkani, Malwani, Mangalorean, etc. 

Many such Chains have started from their own state but soon move on to/ expand into other prominent metropolitan cities such as MMR, NCR, Bangalore, Pune etc. to cater to the migrant workforce. Others focus on neighboring state, where there is visible demand. For instance, brands such as Nandhini Deluxe, Nagarjuna have expanded rapidly in the Bangalore city, catering to the Andhrite population living in the Indian Silicon Valley. Likewise, Puri which hosts a large volume of Bengali tourists also has a numerous popular Bengali restaurant, as there is visible appetite for such cuisines. 

Growth Drivers:

There are multiple factors which are driving the growing interest towards ethnic eateries in modern Indian cities. Ranging from changing cultural fabrics to evolving socio demographics in larger metropolises, the spurt in rooted in a tapestry of multiple factors playing together.

Mentioned below are the factors that are fueling the growth of regional and ethnic cuisines restaurants in India

• Migratory workforces are rising in Indian cities: In search of new job opportunities and better career options, individuals & households are now shifting to new territories. One of the first things that someone would look out for in a new city will be access to well-cooked food and cuisines from their region. 

• Rise in cultural understanding: In a food vlogging and Instagram influencer culture, what is remarkable is a rise of inter cultural understanding. As a nation we becoming more open and understanding the nuances of other cultures, societies and regions. Naturally. Cultural awareness is driving diversification of taste buds. 

• Some food items becoming mainstay rather than regional: Consequently, many food items are becoming mainstay rather than just regional delicacies. In the past we have seen this with idli dosa, chole bhature, vada pav, pav bhaji, Bengali sweets, daal baati, etc. Currently, we are seeing similar trends with litti choka, champaran meat, Kolkata style biryani, Bengali fish curry, Hyderabadi chicken 65, indoori poha, chettinad curries, etc. 

• Easy to market: Ethnic restaurants are relatively easier to market than conventional ones, as they mostly thrive on word of mouth, community outreach and building presence in cultural events. 

• Multiple formats: Ethnic and localized eateries are exploring various formats to gain market share. Besides fine dining and upscale formats, businesses are also adopting other variants such as casual dining spaces, cloud kitchens, take away, QSRs, cafes, kiosks, etc. 

Improved supply chain: As logistics are improving, local ingredients are now readily available, which makes relatively easy to start an ethnic restaurant. Ethnic restaurants need access to important raw materials and ingredients such as Sattu (Bihari/ Eastern UP), Kokum (Coastal), local masalas, etc. Today thanks to enhanced supply chains, such ingredients are easily available at a Pan-India and even international levels. 

Top Emerging Regional & Localised Cuisine Branded Chains:

Market Opportunities in the Segment:

The Indian ethnic and localized cuisine market will continue to grow at a staggering pace in the coming years. While still a niche segment when compared to other popular varieties such as Cafes, QSRs, fine dining, lounges, etc. the situation is set to change. 

It will become more mainstream as demand for specialty and ethnic cuisines are rising. Besides their home market, others are also experimenting with new cuisines in the face of growing cultural awareness and food vlogging culture. Most of the brands are self-funded/ seed-funded but we can see active participation from VCs and private equity players. This will further vitalize their growth and expedite expansion. 

How The India Watch can Help?

The India Watch is a leading market research, feasibility and business insights advisory. We cater to multiple business, with food retail and F&B being one of them. Opened in 2020, we have served multiple F&B outlets including café chains, fine dining restaurants, rooftop restaurants, ethnic eateries, casual dining spaces with tailor made research and feasibility study advisories. 

If you are a food entrepreneur and want to make data-backed business decisions that can help you de-risk and sharpen your strategy, consult us for tailor made market research and feasibility studies. Our studies offer the following

• Market insights, market sizing and trend analysis
• Competitive insights and benchmarking 
• Location analysis
• Consumer behavior research
• Consumer lifecycle mapping and purchase trigger assessments
• Consumer segmentation, targeting and positioning 
• Menu selection and optimization 
• Pricing research 
• Marketing and customer acquisition strategy 
• Business strategy and growth inputs 
• Financial models 
• Risk strategy and mitigation approach

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