Value-Deals and Millennials’ Driving QSR’s in India
India, a nation of 1.2 billion people, is the most varied market in terms of food in the world, cheers to regional differences in cultures, lifestyles and preferences. Today’s consumers select those restaurants or brands that understand them and provide them with the experience they seek. India is a price sensitive country and good bargains and promotions catch consumers’ attention. This trend is seen across consumers categories. For Indians getting valued brands for a lesser price enhances their dining experience and is a motivating factor for them to be more loyal to the restaurants or brands.
With the changing habits, there is an increased preference for convenience and eating out. According to various industry experts, nuclear families and bachelors are turning towards takeout, home delivery and semi-prepared meals (ready-to-eat/ ready-to-cook meals) as these are lower cost and also time saving options.
According to a recent report by Financial Express Online, this is one important reason why FMCG companies like Nestle, Parle, or PepsiCo have not changed the prices of their products like Maggi, Lay’s and Parle-G for nearly a decade now.
Harish Bijoor, Founder Harish Bijoor Consultancy Inc, told Financial Express Online, “These price points become memory points as well. The consumer reaches out to these packs and to an extent has an economy story in his or her mind for sure. The moment this price point is altered, even by 50 paise, there is a jarring effect in the minds of the consumer, retailer, and indeed the entire trade channel.”
The Internet economy is bringing convenience in our lives that consumers want everything at the touch of a button, which led to the emergence of food-delivery platforms in India. The online food ordering business in India has boomed in last two years with the entry of several platforms such as UberEats, Zomato, Swiggy, among others. Considering the potential in the Indian market, these platforms have been expanding foothold in India and have more than three lakh restaurants listed on them.
These platforms have gained increased usage by consumers by focusing on single-serve value-meals and varied cuisines. According to RedSeer’s Foodtech Market Updates, the foodtech industry has seen an overall Gross Merchandise Value growth of close to 140 per cent in 2018, with order volumes increasing by a whopping 176 per cent on account of discounts and value deals provided by food aggregators.
Keeping up with this trend in the country, a global QSR brand like Subway has introduced Chhota Sub, a 4-inch-mini submarine sandwich in four flavours for consumers who are constantly seeking value-deal options with exciting taste. Subway India in past had introduced SubWraps as a snacking product priced at Rs 49 for vegetarian options and Rs 69 for non-vegetarian options. The brand is also running ‘Sub of the Day Offer’ for its guests to have an opportunity to relish their favourite submarine sandwich at an attractive price once a week and is a popular value deal.
With the rapid growth of millennials as the major consumer segment, the perception of product’s value and premiumisation has also altered. Consumers no longer consider a product premium based on just a high price tag. Globally, less than one-third (31 percent) of the consumers consider a product premium only because it is expensive. Thus, a clear demand for value-for-money is emerging amongst the younger consumers.
Future of Alternative Fuels in India
As the world is shifting towards eco-friendly fuel alternatives, the Government of India is also doing its part by framing environmental friendly policies & regulations and encouraging electric vehicles (EVs) in the country.
While the shift towards EVs is a welcome step by the Government, it is not enough to meet the ever-growing energy demands of the country, which is expected to double by the year 2040. India is expected to receive almost $25 billion worth of investment in the expansion of its gas infrastructure.
In addition to this, India is expanding its domestic refining capacity from 249mmtp to 450mmtp by 2035. While EVs would bear some burden in meeting these demands, the dependence on conventional fossil fuel sources would be significant, in ensuring pleasant growth of all sectors.
In recent years ethanol has arisen as one of the most important alternative resource for liquid fuel and has also fuelled a lot of research in ethanol fermentation. Research on improving ethanol production has been fast-tracking for both ecological and economic reasons, for its use as a substitute to petroleum-based fuels.
According to various researchers, production of ethanol from renewable resources may improve energy availability, decrease air pollution and diminish atmospheric CO2 accumulation. The goal is to bring light on agricultural, industrial and urban waste, which could be used for ethanol production in an eco-friendly and lucrative manner.
Primarily, ethanol production will reduce dependency on foreign oil and will eliminate dumping problem of wastes and make environment safe from contamination.
Ethanol might be a new concept in India, but it has been driving automobiles for nearly a decade in countries like Brazil, US and several European nations.
The advantage of using ethanol over gasoline is that there is absolutely no particulate matter that is released into the atmosphere. The only gases that are emitted are carbon dioxide, carbon monoxide, water (yes H2O) and formaldehydes. In the US, the exhaust gases are oxygenated on their way out to reduce carbon monoxide emissions.
Automobile industry body SIAM has proposed making petrol-powered two-wheelers and passenger vehicles material compatible with 10 per cent ethanol (E10) and 3 per cent methanol(M3) blends by 2025.
In a white paper on 'Alternative Fuels for Vehicles' released recently, SIAM also said that by 2030, the auto industry could make specific vehicles compatible with 20 per cent ethanol (E20)-blended gasoline depending upon sustained availability of fuels with separately labelled dispensing at fuel stations.
According to SIAM, "For gasoline-powered two-wheelers and passenger vehicles, industry will endeavour to make vehicles material compatible with 10 per cent ethanol (E10) and 3 per cent methanol (M3) blends by 2025." Further, it said, "By 2030, industry could make specific vehicles compatible with 20 per cent ethanol (E20)-blended gasoline depending upon sustained availability of the fuels with separately labelled dispensing at fuel stations."
While electrification of vehicles will be a major help towards providing energy security and improving environment, India needs to work on other efforts considering the ultimate objective of improving the country’s energy security.
The Government in order to address the concerns of worsening air pollution has decided to move directly from BS-IV to BS-VI pollution norms w.e.f. April 1, 2020. With the introduction of BS-VI norms it aims to reduce the particulate matter and NOx emissions, the introduction of 2G Ethanol, Bio-Diesel, Bio-CNG, and LNG as cleaner alternative options.
Taking government’s initiative forward, Chennai-based TVS Motor Company has recently launched India’s first ethanol-powered motorcycle TVS Apache RTR 200 Fi E100. This ethanol edition is available in Maharashtra, Karnataka and Uttar Pradesh.
This can be the starting for two-wheeler industry where more and more companies and start-ups will be looking to provide green and sustainable mobility solutions across electric, hybrid and alternate fuels with the help of government intervention.
http://www.siamindia.com/uploads/filemanager/159SIAMWhitePaperonAlternativeFuelsforvehicles.pdf
https://www.researchgate.net/publication/233746451_Ethanol_as_an_alternative_fuel_from_agricultural_industrial_and_urban_residues
