Food Industry Dimensions and Management

The provided document is a detailed analysis of the food industry's various aspects, including its dimensions, management strategies, and relevant research studies. The content includes information on employee turnover intentions in the US fast-food industry, global changes in food supply and obesity rates, and the impact of fast-food outlet density on obesity prevalence. Additionally, it discusses human resource management in the hotel and catering industry, as well as the use of electrochemical biosensors for detecting food contaminants. The document also presents data on Indian food industry exports and the UK eating-out market size and forecast. Overall, this assignment provides a comprehensive overview of the food industry's complexities and related research findings.

BUSINESS PLAN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Review of Proposed Market...................................................................................................1
Overview of Casual Dining Industry of UK...........................................................................2
Market segmentation..............................................................................................................4
Indian Food Industry..............................................................................................................5
Competition and Market share...............................................................................................6
PEST Analysis........................................................................................................................7
SWOT Analysis......................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Fast food sector of UK is the fastest growing sector in which different organisations are
establishing their unique food businesses. Present report deals with Kaati Zone which is Indian
fast food outlet located in Bangalore, planning to open in Manchester. UK Casual Dining market
and fast food market of both will be analysed. Moreover, SWOT, PEST and Porter's analysis all
of three are produced for firm. Proposed market and Indian Food Industry are explained with
facts which will reflect effectiveness of expansion plan. Wraps and kati rolls customised with
fresh veggies will be provided to people of UK so that they may get Indian cuisine taste. It will
be beneficial for business as new taste will be offered so as to satisfy them.
MAIN BODY
Review of Proposed Market
The UK Eating-out market is major economic power of country generating good amount
of revenue in effective manner. The total revenue in 2016 rose to 66.2 billion GBP which entails
significance of market for uplifting growth of UK. The fast food outlet will be located in
Manchester, UK which would sell healthy Indian kati rolls and fresh veggie wraps for consumers
in the best possible manner. It can be analysed that Eating-out industry is being producing higher
level of income.
Illustration 1: UK Eating-Out Market Size and Forecast (2012-2022) (Mintel reports)
The facts which denotes growth are outlined below-
 Ethnic restaurants and takeaways market are growing at a rapid rate. Healthy Asian
cuisines are demanded by consumers and is expected that market will grow by 3 % in
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2017 from £10.4 billion to £10.7 billion increment of 0.3 billion which means that food
sector will grow.
 Food-to-go market is continuing and more outlets are opening out of London. Healthier
options are provided by various brands keeping in mind advanced techniques as well. It
includes pre-order and collect or customised options for meals suitable for individual
tastes. Market is worth of £3.6 billion in the financial year 2017.
Eating-out market has achieved robust growth in recent times and accomplished desired
sales quite effectually. However, it faces regular challenges such as real incomes of customers go
down due to inflation. In 2017, CPI inflation was 2.6 % which was till June and July. It is likely
to have impact on spending level of people for eating out of home. Sales will increase if
reluctance of customer of eating outside is reduced. While, UK economy will not collapse
because people spend huge amount for eating outside which helps in successful management of
food business.
Takeaway and home delivery segments have gradually seen higher revenue as customers'
prefers to pack the food from the hotel and they find it convenient. Just Eat has helped to boost
online delivery of food items without spending on own delivery infrastructure which requires
huge cost investment. Fast food outlets are entering in supermarkets and in large shopping
centres as they can attract large number of customers, visiting the supermarkets. Hence, Eating-
out market is quite suitable for new fast food outlet to be opened in market.
Overview of Casual Dining Industry of UK
UK has variety of business opportunities and any organisation can open its branch and
attain desired revenue. In accordance with this, Casual Dining Industry of UK has been popular
segment where people continues to go out for dinner and spend their income (Food industry of
UK. 2017). On the other hand, income looks to be squeezed in 2017, which signals towards
impact on amount spent by customers. It is highlighted in ONS report that food cost and non-
alcoholic beverages hiked by 4.1 over last one year and would continue in 2018 as well. It will
impact spending ability of consumers and they will prefer grab-and-go alternatives seeking to
avail food at their doorstep and have low prices in comparison to Casual Dining restaurant. This
is because quality focused food is provided to customers.
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Another aspect which has down-streamed Casual Dining Industry is inflationary
situations prevailing in the UK. In accordance with this, it has been determined that mostly
restaurants in UK imports raw food ingredients. Salad and vegetables were largely affected in
2017 because of poor weather conditions across Europe which led to shortage of supply. This has
influenced costs of restaurants and was the major reason behind hiked prices of food items. This
helped the restaurants is to maintain stability in profits and revenues which thereby, affected
consumers. NLW (National Living Wage) and NMW (National Minimum Wage) rules are
implemented for workers in this sector which impacted hospitality industry as firms are required
to pay high wages in accordance to the law. This has increased its staffing cost (Barbut, 2016).
Illustration 2: Food industry dimensions Source: https://www.ons.gov.uk
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It can be interpreted from graph that Casual Dining Industry UK, need to focus on
analysing changed consumer behaviour to attain sales and profits. Moreover, labour costs need to
be controlled. The Casual Dining Industry has large cuisines where customers get different
variety of foods. Italian and pizza are dominating market and have combine share of 45%.
Moreover, consumers prefer to have diverse shift towards Thai, Caribbean and Mexican foods.
Indian outlets are making money as well. Manchester, Leeds and Liverpool are the major cities
which benefited the industry with exotic amenities. It is expected that premium fast food, street
food and premium casual dining will thrive for market share.
Market segmentation
The UK food industry is largely dominated by two segments such as ethnic restaurants
i.e. Casual dining and Takeaway restaurants which are producing large quantum of sales in UK.
It is expected that in future takeaway market along with ethnic restaurants will grow despite of
increased inflation affecting customer behaviour and decline in sales. Driving forces would be
brand management, enlarged lists of menu, options for home delivery, etc. Moreover, innovation
in restaurant is at its best and according to Mintel reports which denotes that 34 % of growth will
be seen in forthcoming years, forecasted to reach 15 billion GBP in 2022. This is possible as per
forecasts because rise in traffic will contribute for maximising sales within the population of 0-
14 years old and customer's would spend more. This will benefit food industry in terms of
profitability.(Davis, Lockwood, Alcott and Pantelidis, 2018).
Ethnic restaurant segment is forecasted to grow slowly and are benefited by the increase
in traffic, which will aid in growth for the Eat-in segment. Consumers will not prefer takeaway
segment as competition is becoming fierce and thus, high discounts are being provided along
with amenities attracting people to come out for meals rather than going anywhere else. It is
expected that food industry will grow by 23 % from 2017-2022. Another segment is Take away
or home delivery which is boosting sales up to major extent and revenues are maximising at a
rapid rate.
These companies are bringing restaurants to online platform without setting up their own
delivery infrastructure leading to cost-effectiveness for food business. This is bridging gap
between restaurants and customers with the help of fast food services. Digital ordering with the
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help of mobile applications is also helping businesses to make deliveries quite quickly (Rotariu
and et.al., 2016). Moreover, Chinese and Indian Takeaways are growing as people have limited
time to cook. Hence, it can be analysed that sales will increase of Take away segment and Kaati
Zone, an Indian fast food chain can enter and grab UK market.
Market Drivers
1. Dining-Out remains key spending area
 Consumers are inclined towards leisure experience
 Wage growth in May 2017 was 2.7 % while it was 2.6 % in previous month. Customers will be keen to eat outside.
2. Rising Costs
 It is highlighted in ONS report that food cost and non-alcoholic beverages hiked by 4.1
over 2016. Inflation is risen, weakening pound but would affect only budget conscious consumers.
3. Takeaway or Home Delivery services becomes ubiquitous?
 Introduction of third party delivery organisations like Deliveroo, Just Eat and UberEats. Increased in market share of consumers
4. Technology Boom supporting dining-out sector
 Technology is increasing as 79 % adult own smartphone in 2017. Connection in real-time with dinners and promoting brand
5. Gender difference
 Women are more inclined towards controlling of food. Men are in favour of convenience of quick meals
6. Healthy food preference high or low?
 Over 45 years age are more health conscious than below age. When dining-out, 16 – 45 years considers healthy food.
7. Type of cuisine preference
 Italian and pizza remains most preferred option for consumers.
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 Caribbean, Thai and Mexican chains have expanded as consumers' taste have been
changed.
8. Location or Regional factors
 Drink-led eateries are growing at a rapid rate
 Premium fast food, street food, premium casual dining is emerging
Consumer Trends and Behaviour
 UK eating-out facing challenges because profit margins are decreased because of
increasing overheads such as apprenticeship levy, NLW rules made leading to more
wages to be paid to workers. However, food industry is expected to grow to 11 % from 2017-22 enabling healthy
growth of industry and fuelling up weakened pound.
1. Consumer and their trends
 Eating-out is rare for consumers as only 24 % likes to eat outside and sit down for meals. Opportunities prevail for company as partnership of Deliveroo and TripAdvisor has been
made to takeaway food through Deliveroo.
2. Changing Taste of UK Casual Dining Market
 Higher labour costs, business rates and increment in food costs especially of raw
materials are challenging for the market.
 21 % demand for flexible meal options, 26 % demand for calorie foods, 38 % interested
in customised menus. 55 % of parents are ready to pay more money for premium quality food.
3. Consumer Confidence and Business Confidence
 Consumer confidence is changed as 64% prefers to shop physical store. While, 83 %
prefers online shopping.
 Uncertainty of Brexit is prevailing and short-term ramification may be managed but is
already creating panic for businesses.
Indian Food Industry
The Food Industry of India is one of the major industry contributing to world food trade
every year. This sector has vigorously expanded its profits where food processing is fast. This
has imparted benefits to overall Indian economy. In accordance with market share, it accounts
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for 32 % of food market of nation and government is making significant efforts for encouraging
investments in it. Indian food market alone is sixth largest in the world making profits quite
effectively (Indian Food Industry Exports. 2017). Food processing industry contributes 8.80 %
of GVA (Gross Value Added) in manufacturing and agriculture base. Thus, it is accounting for
13 % of exports to other countries. The gourmet industry of India is presently valued at $1.3
billion with CAGR (Compound Annual Growth Rate) of 20 %.
On the other hand, online food ordering business is also expanding. The major players of
expansion are, Swiggy, Food Panda, Zomato which are scaling up with potential partnerships
with the aim of attaining higher growth in the future. Online food delivery sector grew by 150 %
having an anticipated GMV (Gross Merchandise Value) of around $300 million in 2016 financial
year. It has been analysed that fast food outlets are increasing in country and good amount of
sales are accomplished. Kaati Zone located in Bangalore, India will open its fast food chain in
Manchester, UK where casual dining industry is quite profitable. It will sell kati rolls made of
fresh veggies, hygienic chicken tikka and mixed veg rolls to consumers of UK.
It can be interpreted from the graph that Indian food industry is rapidly maximising its
profits in the best possible way and enlarging its market share in world food trade (Manning and
Soon, 2016). The exports highlight that during the span of 2011-2016 that is five years, exports
from India of processed food and food items grew at a CAGR of 11.74 % hiking to $16.2 billion.
Major destinations in exports are Middle East and South-East Asia. While, it remained at $1.3
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Illustration 3: Indian Food Industry Exports Source:

billion in 2017. It can be said that Indian food industry will grow more robustly in forthcoming
years.
Competition and Market share
The competition in the food industry has been gradually increasing at a rapid rate.
Various firms are competing with each other for gaining market share. The Casual Dining
Industry is facing rivalry as there are many rivals which are providing goods at lower prices to
customers. It is determined that better strategies should be implemented to outreach rivals and
achieve market share (Geppert, Matten and Williams, 2016). Fast food outlets are also having
cut-throat competition for attaining more customer base and consecutive share in the market.
Kaati Zone is required to frame strategies to enter food industry by outreaching competitors in
early phase of expansion operations. The following table reveals competition of organisations in
fast food restaurant sector-
SUBWAY
McDonald’s
KFC WRAP IT
UP!
BARBURRI
TO
CHIPOTLE
CHILANGO
Other small
brands (Leon
Restaurants)
It is operating
since 1968.
The
organisation
has good
market share
in UK has
been
increasing and
is market with
a storm. 0.9 %
of growth is
seen from past
year. It sells
premium
McDonald’s
is operating
since 1940
and is on top
list of most
trusted and
valuable
brands. It is
primarily
known for
hamburgers
but has
enlarged with
new items like
chicken
KFC has
been in the
worldwide
market since
1930
founded by
Harland
Sanders and
is located at
21,000
locations. It
sells chicken
products
such as fried
chicken,
Wrap it up!
Has been
operating in
market of
UK and
gaining
popularity
among
customers as
quality
standards are
taken utmost
care. It is
operating in
UK, Pakistan
It is another
fast food
chain of
Britain
selling
Mexican
style of food
mainly
burritos. The
first store
was opened
in Piccadilly
Gardens in
Manchester
and founded
Chipotle is
American
fast food
chain
operating
since 1993
and serves
UK, Canada,
Germany and
France. It
sells variety
of Mexican
products and
operating
income of
Chilango is
another fast
food restaurant
operating in
London with
variety of
products such
as Mexican
Cuisine with
wraps and rolls
and providing
enlarged food
menu with the
taste of
Mexican of
It was founded
by John
Vincent and
Henry
Dimbleby and
operating since
2004.
Restaurant has
53 outlets in
UK and
Netherlands
which is
expanding its
business.
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quality salads
and submarine
sandwiches
and is located
at 43,306
places in 112
nations.
products,
French fries,
salads wraps
etc. It has
over 235,000
employees
and 37241
restaurants are
present in
various
locations.
sandwiches,
wraps,
milkshakes,
desserts and
attains large
quantum of
profits
around the
world
benefiting
American
economy.
and provides
Turkish
Gozleme,
Nantwich
Cheese and
Onion,
Mexican
Morning
Chilli and
related
breakfast
flatbreads
and wraps.
by Morgan
Davies and
Paul
Kilpatrick. It
is growing in
the market
and currently
operating in
UK and
Canada
having
collectively
71 of stores
in both
locations.
$34.57
million in
2016.
burritos. It has
been operating
since 2005 in
UK and
serving exotic
Mexican food
items to
customers
focusing on
providing
profits to it.
PEST Analysis
Political (P) or Legal (L)-
The Indian fast food outlet, Kaati Zone needs to adopt food safety and health guidelines
so that it may provide quality foods to customers and attract their taste towards exotic Indian
healthy kati rolls having Mexican taste. Health and safety guidelines are important as it affects
business operations if not adhered to (Bebe, 2016). Food Standard Agency (FSA) regulates food
industry and responsible for health of UK citizens and Kaati Zone has to follow regulations
imposed by agency for uninterrupted operations in new market.
Economic (E)-
Expense or cost for setting up outlet is comparatively low than other processing industry.
Hence, it becomes suitable for Kaati Zone to effectively enter into market. In period of recession,
ethnic casual dining restaurants finds difficult to lure customers as disposable income is low.
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However, fast food outlet does not find issue as sales and therefore the outlets are able to earn
stable profits (Lelieveld, Holah and Gabric, 2016).
Social (S)-
Requirements of the society needs to be taken into consideration when expanding. People
have busy life and fast food restaurant are known for fast and quick services, they have become
part of citizens' lifestyle. On the other hand, obesity is main problem in UK and as such,
customers are focused on low calories' food but fast food outlets have high calories. It is needed
that Kaati Zone should make items which are lowly in calories (Zobel and et.al., 2016).
Technological (T)-
Technology has completely changed human perspective of food. It is required that Kaati
Zone should make food in accordance to new techniques and for electronic payment mechanism
should be installed. Hence, acceptance of paperless currency should be used. Online marketing
can be used in the company by promotions in relation to games, discounting offers on website
etc. Computerised billing system and ordering online are also vital part of technological
advancement which will assist Indian outlet in managing successful business operations. For
example, McDonald’s has installed Electronic Funds Transfer at Point of Sale (EFTPOS) at
terminals where paperless payments are done. It can be adopted by Kaati Zone to promote easy
payment system which will assist customers in making secure digital payment.
Porter's Analysis
Threat of new entry-
Food industry has attracted many companies as there are higher profits in this sector.
Domestic and MNC keeps on entering market but cannot stay because strong entry barriers
prevail. It is required that innovative techniques are needed so that for establishing brand image
and differentiating products from rivals requires involvement of huge capital. Hence, threat of
entrant is moderate in fast food industry (Lowry and Lee, 2016). However, new entrants are not
significant competitive forces in the industry because it has strong entry barriers.
Bargaining power of customers-
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It is an industry which have high bargaining power of customers as several substitutes are
available and any food items can be availed by customer. Pressure among rivals increases and in
order to retain and attain consumers, they provide discounts on products. This leads to low
profits and wide variety of items are offered at low costs. Thus, due to high bargaining power,
brand loyalty is little.
Bargaining power of suppliers-
Fast food industry is not affected by the bargaining power of suppliers as they are large in
number. It means that power of suppliers is low because there is flexibility in supply chain,
backward integration which reduces supplier's power in the industry resulting in reduced
pressure among competitive players in fast food industry. Hence, it bargaining power of supplier
is low.
Substitute threats-
It can be analysed that Kaati Zone will find it difficult to operate smoothly in market as
fast food sector has high degree of substitutes which affects profit level. It means that threat of
substitutes is high due to availability of ethnic and mid-range restaurant. Online order and home
delivery food services like pizza, burger, canned food and pre-cooked meals are common edibles
which denotes high threat from substitute. (Royo-Bordonada and et.al, 2016).
Rivalry in industry-
The rivalry in the industry is getting more intensified day-by-day which leads to low
profits among players. Overall, industry in its saturation and facing slow growth. It implies that
price war is increasing and they are to cut-down costs in order to gain significant market share.
Hence, rivalry is high in fast food industry (Polsky and et.al, 2016).
SWOT Analysis
Strengths (S)- There are various strengths in the fast food outlets. First of all, low
investment is needed by Kaati Zone to operate in new market. Owner of
firm is an Indian and thus, understands perfectly the cuisine. It will be
possible to operate in UK as contacts gets established making it easier for
fast food chain to locate in Manchester.
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Weaknesses (W)- Quick inventory ratio to be maintained along with stock analysis is complex
task. Operational processes become complicated from end-to-end. Food
items are highly perishable which leads to wastage if not quickly utilised.
Finance requirements from outside is difficult to obtain by new entrant in
market as it lacks financial standing (Boella, 2017).
Opportunities (O)- Ample of opportunities are there for Kaati Zone in gaining market in the
best possible manner. This means that it can enter in market and can expand
in segments such as coffee, online ordering of items etc. Furthermore,
wraps and kati rolls are favourite Indian cuisine of UK. Healthy food is
demanded by people which will lead to increase in sales by adopting quality
standards (Athens, Duncan and Elbel, 2016).
Threats (T)- Economic instability is high and influence of Brexit imply high cost of raw
materials and not certain for business. The competition is increasing as
every year 1700 new restaurants are being operated. Fusion food is
demanded and market is easy to access. Thus, threats are high for Indian
outlet (Mazidi and Speakman, 2017).
CONCLUSION
Hereby it can be concluded that UK food industry is highly competitive. Casual Dining
segment is experiencing downward growth but will pace up slowly in the future. While, take
away segment has been performing well and achieving desired sales. Kaati Zone is planning to
launch outlet in Manchester, UK has to implement well-structured strategies so that it may not
face many difficulties and will be able to dominate fast food market. Thus, it can be said that
Indian-street fast food outlet in Manchester will be able to accomplish objectives and attain
profits in new market by serving famous Indian wraps or kati rolls.
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REFERENCES
Books and Journals
Barbut, S., 2016. Poultry products processing: an industry guide. CRC press.
Davis, B., Lockwood, A., Alcott, P. and Pantelidis, I. S., 2018.Food and beverage management.
Routledge.
Rotariu, L. and et.al., 2016. Electrochemical biosensors for fast detection of food contaminants–
trends and perspective. TrAC Trends in Analytical Chemistry. 79. pp.80-87.
Manning, L. and Soon, J. M., 2016. Food safety, food fraud, and food defense: a fast evolving
literature. Journal of food science. 81(4). pp. R823-R834.
Geppert, M., Matten, D. and Williams, K. eds., 2016.Challenges for European management in a
global context: Experiences from Britain and Germany. Springer.
Bebe, I. A., 2016. Employee turnover intention in the US fast food industry.
Lelieveld, H. L., Holah, J. and Gabric, D. eds., 2016.Handbook of hygiene control in the food
industry. Woodhead Publishing.
Zobel, E. H. and et.al., 2016. Global changes in food supply and the obesity epidemic. Current
obesity reports. 5(4). pp.449-455.
Lowry, L. L. and Lee, M., 2016. CittaSlow, slow cities, slow food: Searching for a model for the
development of slow tourism.
Royo-Bordonada, M. A. and et.al, 2016. The extent and nature of food advertising to children on
Spanish television in 2012 using an international food-based coding system and the UK
nutrient profiling model. Public Health. 137. pp.88-94.
Boella, M., 2017. Human resource management in the hotel and catering industry. Routledge.
Mazidi, M. and Speakman, J. R., 2017. Higher densities of fast-food and full-service restaurants
are not associated with obesity prevalence. The American journal of clinical
nutrition.106(2). pp.603-613.
Polsky, J. Y. and et.al, 2016. Absolute and relative densities of fast-food versus other restaurants
in relation to weight status: Does restaurant mix matter? Preventive medicine. 82. pp.28-
34.
Athens, J. K., Duncan, D. T. and Elbel, B., 2016. Proximity to fast-food outlets and supermarkets
as predictors of fast-food dining frequency. Journal of the Academy of Nutrition and
Dietetics. 116(8). pp.1266-1275.
Online
Food industry of UK. 2017. [Online]. Available Through: <https://www.ons.gov.uk/>
Indian Food Industry Exports. 2017. [Online] Available Through:
https://www.ibef.org/industry/indian-food-industry.aspx
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