In an interview, Ajay Mariwala says that the proposed fund raise will support capacity expansion, working capital and business development, with the company currently manufacturing around 85 per cent of its portfolio in-house
Food Service India plans to raise external capital over the next 9 to 12 months while investing Rs 20 to 25 crore annually to expand manufacturing capacities by over 35 per cent each year, as it scales operations to meet rising demand across product categories, its Managing Director Ajay Mariwala said.
In an interview with BW Retail World, Mariwala noted that the proposed fund raise will support capacity expansion, working capital and business development, with the company currently manufacturing around 85 per cent of its portfolio in-house and looking to add new capabilities and packaging formats. The company is also setting up its distribution network in the United States to cater to the restaurant chains.
Chef’s Art, the company’s flagship brand and a key player in the hotels, restaurants and catering (Horeca) seasonings ecosystem, is targeting a Rs 500 crore turnover over the next two years, up from around Rs 200 crore currently, as it completes a decade. The growth strategy includes expanding its presence across over 25 states and 454 cities through an over 400 distributor network.
Capex Roadmap And Capacity Expansion
Mariwala said the company is deepening its manufacturing footprint as it brings more production in-house, with around 85 per cent of its portfolio now manufactured internally. “We would like to maintain that because that helps to give more authentic product, better quality, better traceability and lower cost,” he said. To support its growth ambitions, the company plans to invest Rs 20 to 25 crore annually to expand capacities while adding new manufacturing capabilities.
Giving a snapshot of its manufacturing base, Mariwala said Food Service India currently has capacities of over 12,000 tonne per annum for gravies, 7,500 tonne for seasonings and 2,500 tonne for sweet goods. “We will have to grow this at over 35 per cent per annum, all of these. To do that, we have to keep on investing about Rs 20 to 25 crore,” he said.
The investment, he added, extends beyond capacity creation to making the manufacturing network more versatile. “Part of that investment also goes towards capabilities,” Mariwala said, explaining that the company is expanding its packaging formats to serve diverse customer requirements. “We give a packaging format from as low as 0.7 gram to up to 25 kilos,” he said, with offerings spanning Pet packs, glass bottles, Pet bottles, pouches, spout pouches and bulk bags to cater to both B2B and B2C customers.
On the product portfolio, Mariwala said products introduced over the last three years account for around 20 to 22 per cent of the company’s product mix, while the remaining share comprises products that are older than three years. He attributed the continued relevance of legacy products to the gradual democratisation of international cuisines across India. “For tier 3 and 4 markets, this is still a new product,” he said. “For us it might be old, but for that market it is new.
The Next Piri Piri?
Looking back at the success of Piri Piri, Mariwala said the seasoning struck a chord because its flavour profile was inherently familiar to Indian consumers. “Piri Piri was a very unique thing because it has flavour drivers that are very close to Indian flavour drivers, a combination of chilli, garlic and lime, which you and I virtually eat almost about every day,” he said. The MD believes the next mass-market cuisine trend will be driven by flavours that align with Indian palates and are backed by broader cultural acceptance.
“Korean cuisine has done extremely well in India because the Korean culture itself got exposed at the same time as the food,” he said. He attributed its acceptance to familiar flavour elements, noting that Korean food also has “a high level of fermentation, a lot of use of garlic and chilli,” making the cuisine naturally relatable for Indian consumers.
Looking ahead, he sees Italian cuisine as the category with untapped opportunity. While acknowledging that “Indo-Chinese is already very big and will continue to grow,” Mariwala argued that Indians have only scratched the surface of what Italian food has to offer. “People think pasta is Italian, but largely they combine red sauce and cheese sauce and think that is Italian. Actually, Italian food is huge,” he said, adding, “You will see a lot more expansion of Italian food.”
Exports Gain Momentum, Consolidation Still Distant
Mariwala believes Indian cuisine is entering a new phase of global acceptance, particularly in developed markets. Pointing to the United Kingdom, where Indian food is already well established, he said the US is now witnessing Indian cuisine “going absolutely mainstream”, with “some of the most leading, cutting-edge restaurants” being Indian. He attributed this shift to the industry’s evolution beyond food.
“Indian food was always great, but what was missing was the whole experience piece of the meal as well as the service element,” he said. “Now that that has come in, the whole picture has started to change.”
He also sees strong export opportunities, driven by both the growing Indian diaspora and rising demand for authentic regional flavours. “We are seeing a lot of demand and interest for Indian food, more and more authentic Indian food, not very generic, from across the world,” Mariwala said. Exports have become “a very rapidly growing segment” for the company, with shipments to the Gulf, the UK, Europe and the US.
On industry consolidation, Mariwala drew a distinction between restaurant chains and food processing companies. While he expects restaurant chains to continue proliferating across states as eating habits evolve, he believes consolidation is more likely on the supply side. For Food Service India, this means expanding both product capabilities and manufacturing facilities.
“Currently we manufacture everything in Maharashtra and Gujarat and ship it all over India,” he said, adding that the company intends to manufacture closer to demand centres to reduce logistics costs by serving markets within a 400 to 500-kilometre radius. Despite plans to add capabilities and pursue acquisitions where relevant, Mariwala does not expect structural consolidation anytime soon.
Calling India’s food processing industry “the most fragmented industry in India” after restaurants, he said, “India level broader consolidation will take 15 years. Right now, that is too early.” While “people like us will acquire” and continue adding capabilities, he believes the industry’s sheer scale means “growth is going to be there for the food industry”, with consolidation remaining a long-term story.
The Biggest Bottleneck? Ease Of Doing Business
Mariwala said the issue is neither manufacturing capacity nor sourcing, but the ease of doing business. While acknowledging the government’s efforts to strengthen the food ecosystem, he argued that compliance must become simpler. “The FSSAI is doing fantastic work… everybody has the right intentions and the right objectives,” he said, adding that regulations are essential to protect consumers and improve food standards.
However, he believes the regulatory framework should not come at the cost of business efficiency. “The ease of doing business needs to go up dramatically. It’s still very complicated and difficult to run a business,” Mariwala said. According to him, the need of the hour is for industry and government to work together so that “the need to regulate need not slow down the progress and make it so difficult to run business.”
Calling for a more collaborative approach, Mariwala maintained that regulation and ease of doing business are not mutually exclusive. “We need to work hand in hand,” he said. “What you are doing is the right thing, but we need to make it happen while not losing the ease of doing business… it is possible to do that.”
Quick Commerce And New-age Food Formats
Mariwala said the company is looking to deepen its presence across multiple sales channels and is “far from satisfied” with its current reach. While Food Service India already operates across six channels, including Horeca, exports, key accounts, customised B2B solutions, white labelling, and ecommerce and quick commerce, he identified quick commerce and ecommerce as the fastest-growing channels. “Like everybody else, it’s the fastest-growing channel for us too,” he said, adding that the company serves both B2B and B2C customers through these platforms.
He expects quick commerce to become an even bigger growth driver as consumer habits evolve beyond conventional home cooking. “Quick commerce and ecommerce is going to be a very big growth sector,” Mariwala said, pointing to the rise of consumers preparing meals at home “not from scratch, but from a pre-made assembled kit.” According to him, this shift towards convenience is already becoming increasingly visible.
More broadly, Mariwala believes quick commerce cafés, cloud kitchens and food delivery-led formats are all here to stay, as they cater to different consumer needs. “They will all grow significantly,” he said, adding that it is too early to predict whether cloud kitchens or quick commerce-led food formats will emerge as the dominant model. “They have their own place because they are fulfilling different needs and different target audience,” he said, while noting that these formats are part of an irreversible transformation in the way Indians consume food, with freshly cooked meals at home gradually giving way to eating out, ordering in and on-the-go consumption.
