Rajesh A R Chairman LabourNet
Being small is beautiful but remaining small, particularly in any business, is definitely not desirable! There are many small entrepreneurs in food business who have great potential to grow. A small Chinese food joint can get completely transformed if they set up a branded noodle bar. A simple tea shack can become a franchise outlet for a chain of branded tea sellers. Or a food truck can expand their services into multiple locations. What stops many from such growth? In most cases, it is the lack of awareness or the inability to cope with registration, compliance and statutory guidelines.
Fast food industry in India is growing at a greater pace with the advent of new-age online food delivery platforms. To keep pace, small time entrepreneurs try to grow their business by registering on food aggregator apps like Swiggy and Zomato. With innovative models of food delivery enabled by latest technologies, there is great scope for many youth to enter into this sector as entrepreneurs.
However, there’s a critical concern that they need to address. Are these entrepreneurs aware of food safety standards from FSSAI and statutory compliance and penalty? How do they ensure that the standards are met without compromising on hygiene and quality? In fact, compliance with these standards is a mandatory requirement for them to formalize their business. In addition, they should follow the norms set by aggregators as well and should be comfortable in technology adoption.
Let’s look at some key facts about the industry. The fast food market is expected to grow at a CAGR of 18% by 2020 due to changing consumer behaviour and demography. According to the ASSOCHAM – Grant Thornton joint study on ‘Food Retail: Investment: Infrastructure’ ,by 2024, food processing sector is expected to employ 9 million people in India and expected to generate about 8,000 direct and 80,000 indirect jobs in the state. However, the unorganized sector which accounts for 42% of India’s food processing industry face a lot of difficulties in sustaining and growing their business to the next level. The issues of road-side vendors range from problems with food contamination, absence of basic amenities like water supply in and around their work place, lack of technological skills and market awareness etc,.
Coping with digital disruption
The ease of using mobile apps for food ordering has radically transformed the fast food industry. Since this trend will continue to grow, the markets would become highly competitive with scope for expansion and growth of existing and new businesses. To adapt to new ways of food production and delivery, these entrepreneurs need systematic orientation and guidance about maintenance of their production processes and managing their sales. They should know how to meet the expectations set by aggregating platforms.
Compliance with standards
FSSAI registration helps small businesses to grow as per industry standards. As new entrepreneurs enter the market with diverse ways of attracting people, it is important to win their loyalty to survive in the long term. And, the consumers are highly aware of the quality and expect consistent service. FSSAI ensures the quality and credibility of small food businesses. Once, entrepreneurs are able to develop their business through formalization, customer retention and acquisition becomes easier. Also, they can expand their business through the license acquired and can be used to avail loans.
Catering to consumer choice
Digital technologies have been a game changer in providing consumers with convenience and choice. For the business, it poses a challenge of continuous innovation and capacity building with talented workforce who can cater to different consumers. They need to ensure that the staff are trained formally and they are aware of the importance of product and service standards while meeting consumer expectations.
Food ordering platforms have radically transformed the ways of doing business. And it is not just by giving discounts and promotion. There have been instances when FSSAI has shut down many outlets that don’t comply with standards. Even food aggregators are brought under the compliance framework to ensure that the consumer’s experience truly matters.
It’s high time small businesses initiate ways of following the rules and regulations to serve their customers and keep up the growth through digital enablement. This is the only way they can become a part of the evolving ecosystem of new age food business that seamlessly integrates food, technology and logistics to create ultimate customer delight!
