Wednesday 28th September 2016
How Food industry contributes to Real Estate?
Indians are becoming increasingly obsessed with food with the advent of international cuisines and restaurants like Dominos, Mc Donald’s, Burger King, etc. Resultantly, the food and beverage industry is rocketing like never before. It is currently valued at around $40 billion, contributing 32% in the world’s food market and is going to be a $78 billion industry in the next two years. This makes India’s food and beverage industry the fifth largest in the world.
Food Industry, specially the retail sector is totally depended on the Real Estate Sector and even online food companies need logistics and warehousing services. Thus, food and beverage industry can’t grow without the real estate! Here is how our Food and Beverage Industry are pacing up the growth of Indian Real Estate. According to the forbes, Food and Beverage sector comes at No.7 that produces 141 billionaires(8% of worldwide total) and Real Estate at No.3 with 163 billionaires (9% of worldwide total).
The growth of food retails sector is directly linked to the growth of real estate. This is because opening up retail stores require commercial properties! With the expected growth rate of 12 % per annum, India’s retail industry has a lot to offer to the real estate industry because both of them go hand in hand.
Start ups are targeting niche markets to explore everything a food industry can cover. Epigama, a niche retailer making Greek yoghurt has raised 20 crores through super angels and has reached to 2,000 outlets in mere two and a half years. Another creative Indian start up, Raw Pressery, dealing in cold pressed juice has raised $7.2 million through investors. Most of this money would go to the Indian Real Estate sector to fuel it up the road of development.
Online Food Industry:
Food delivery is valued at $ 15 billion out of the total valuation of $48 billion of organized food sector. It is evident that people prefer to order online than to actually visit the place and with the growing number of internet users in India, this trend is just speeding up. Moreover, government has allowed 100 per cent FDI in food sector, which is why a lot of foreign investors are interested to initiate ventures in India. Swiggy, a food delivery start up has already raised Rs 230.34 crores to invest in India. Online retail is expected to be at par with physical retails stores in next five years.
Although we have talked about a few start- ups already, it is important to mention them separately due to their contribution and significance to the food and beverages as well as the real estate industry. Variety is in demand and has always been. People always welcome something different in the market, which is why young minds are coming up with creative start-ups in every sector including food and beverages. A two year old venture, Eatelish have brought the best regional foods from different parts of India in one plate! FAASOS is a food on demand restaurant serving Indian cuisine and is doing very well in Pune. A three year old café chain, The Beer Café, now has 23 outlets! Lluvia is a bakery in Bangalore, run by just 10 single mothers! A healthy snack called Yoga Bars,was launched in 2014. Start-ups like these and many more like Snackexperts, The Green Snack Company, Valencia Nutrition, Juicemaker, Mojo Bar, etc. have gifted the food industry with cool and creative ideas and real estate industry with a lot of growth potential and demand.
F&B Industry employs 8 per cent of the people of India. It is not a small number! Employment indirectly generates demand for real estate by leaving income in the hands of consumers. So, if looked up at the broader view, food industry does not boos the real estate industry only by giving it demanding retail and online investors, but also by creating employment opportunities for lacs of people!
Food industry and real estate go hand in hand and it contributes a great deal to create demand for property. It is actually the interdependency of not only these two, but all the sectors that forms a cycle, where every industry needs every other to grow in some way or the other.
Highlighting the effects of food industry on real estate, it has become clear that the performance expected of the food industry at present and in coming years will surely create a lot of demand for real estate industry and give a better number to our GDP.