There is no denial that Kolkata's F&B scene shines brightly during the auspicious Pujo season. The city, known for its love of food, boasts a rich culinary culture. From sweet Sandesh to piping hot Luchis and the humble Puchkas, Kolkata tells a unique food story. While the local cuisine is cherished across India, the city's F&B businesses have also evolved remarkably. Pan-India brands have entered the city, and some of the most recognized brands with national presence have their roots in Kolkata. The F&B market in the city of joy is more than just Pujo season hype; it is ripe and welcoming for new entrants, with existing brands showcasing strong business numbers. The city boasts 38,838 restaurants, with 7,994 in the organised segment, and the organised food service sector was valued at INR 5,049 crore, contributing significantly to the national economy according to NRAI. 

“The restaurant industry in Kolkata has seen significant growth beyond the Pujo season in recent years, with sales surpassing pre-pandemic levels. The relaxation of night curfews during festivals has allowed for extended hours, boosting sales. The ‘revenge eating’ trend has driven high demand, leading to record-breaking footfall and many restaurants running out of food. Sales have increased by 25 to 30 percent compared to pre-pandemic levels, with the festive season being a key contributor. Additionally, there has been a shift towards dine-out experiences due to limited pandal hopping options. Restaurant owners are optimistic that this growth will continue beyond the festive season,” Nitin Kohli, CEO, Neotia Group stated. 

Factors driving success for Kolkata's F&B market

There has been a noticeable trend towards diversification in cuisine offerings, an increase in themed dining experiences, and a growing emphasis on sustainability and locally sourced ingredients. “Increased urbanisation has driven higher demand for restaurants, while the rapid growth in food delivery services is making online ordering increasingly popular. Higher disposable income encourages more people to dine out, contributing to the industry's growth. However, staffing issues and hiring qualified personnel can be challenging. Inadequate technology can hinder operations, and poor supply chain management negatively impacts restaurants. Adapting to changing consumer preferences is essential for maintaining success in the competitive market,” Kohli stated.

A buzz needs to be created every-time to keep engaging customers. Quality is definitely important but not enough to drive in people. The exceeding number of outlets coming up has created a huge amount of divide and competition. Standing out is the key. 

“Success in Kolkata's restaurant market is heavily influenced by several factors. Key drivers include maintaining consistent quality in food and service, adapting to changing consumer preferences, effective cost management, and leveraging technology for operational efficiency. Challenges include rising operational costs, intense competition, evolving regulatory requirements, and the need for continuous innovation to stay relevant in a dynamic market,” Rohit Bhoot, Director of Old Town Road Cafe Kolkata commented. 

Is Kolkata a ripe market for F&B Business?

Nitin Agarwal, founder & managing partner at Hashtag Kolkata feels that the Kolkata restaurant market is highly competitive for both new entrants and existing establishments, facing several key challenges. “High competition, particularly in the organised segment, demands continuous innovation. Changing consumer preferences drive the need for health-conscious and vegan options. Sustainability and eco-friendly practices are increasingly important. Success is also tied to the effective integration of technology. Managing labour, including training, retention, and flexible work arrangements, is a persistent challenge. Compliance with health and safety regulations remains crucial, and existing establishments must adapt to retain their market share amidst these evolving dynamics,” he said.

The Kolkata restaurant market is highly competitive, with a total of 38,838 restaurants. The city's food services industry is valued at INR 1,979 crore for the organised food chain market and the market for standalone restaurants worth INR 3,070 crore. Significant growth is expected in the industry, which will boost job creation in the state. However, the market is dominated by a few large players, making it challenging for new entrants to establish themselves. “Existing restaurants face challenges due to increasing competition, rising costs, and changing consumer preferences. The market is highly fragmented, with many small and medium-sized restaurants struggling to compete with larger chains. Additionally, there is a growing trend towards online food delivery, which is changing market dynamics,” Kohli commented.

Apeksha Lahiri, director at Five & Dime feels that the Kolkata market is exceedingly competitive, since the market has opened up and become more accepting so the competition has also doubled. “The existing establishments who have made a mark also need to be on their toes,” she stated.

Is Kolkata F&B market conducive for new investors?

The Kolkata F&B market has seen significant growth, attracting new investors. Popular F&B brands include Aminia, known for its authentic delicacies; Wow! Momo, a popular homegrown chain; The Yellow Straw, with 14 beverage outlets; and Craft Coffee, a new entrant with expansion plans.  Agarwal feels that opportunities for investors lie in the growing demand for hygienic gourmet street food, vegan and healthy options, at-home dining experiences, contactless solutions, organic food, and sustainable living. However, challenges include maintaining quality and scalability, addressing environmental concerns, meeting demands for sugar-free and fat-free products, ensuring ethical animal treatment, and complying with stricter pollution regulations.

West Bengal has received investment proposals worth INR 2000 crore in the food processing sector. The F&B industry offers substantial investment prospects in areas such as food processing and fine dining. However, the Kolkata based F&B industry is experiencing remarkable expansion.

Sharing his view, Bhoot feels that the Kolkata F&B market presents opportunities for new investors, especially those willing to innovate and cater to diverse consumer tastes. Opportunities lie in expanding into underserved areas, introducing novel dining experiences, and capitalising on the city's vibrant food culture. He further stresses on that point that the investors should be mindful of challenges such as operational complexities, regulatory compliance, fluctuating market dynamics, and the need for substantial initial investment in branding and infrastructure.

The opportunities are primarily in expanding and marketing the outlet. However, the challenges depend on the investor's background. Their level of awareness and support for the business significantly impacts success.