Bengaluru: Compass India, a unit of UK's contract catering services company Compass Group, is in advanced stages of discussions for four-five acquisitions, Chief Executive for food and services, Ashwani Vohra, told DH. While Vohra refused to disclose the admittedly 'significant' investment amount, the deals will be funded from internal accruals, he revealed.
"These are largely Indian businesses which have been operating for the last 4-5 years in India, have established business models and a proven skill. They will give us a lead into markets where we are not currently operating," Vohra elaborated.
Two of the deals are centred in the technology space and the remaining would be in the core food services area, he added. "The first announcement should come out in two months," Vohra said during a conversation with DH.
Compass India, which grew 60 per cent in the last financial year (October 1, 2022- September 30, 2023) on the back of a strengthening return-to-office policy, sees revenue growth moderating to 45 per cent this fiscal. On the other hand, profit is expected to continue in low single digits.
"In the next five years, we will grow at least five times," Vohra said, adding that the company's workforce is estimated to soar to 1 lakh in the next 2-3 years, from 32,000 currently.
As per data sourced from consultancy firm Redseer, the food services market in India was estimated at $70 billion at the end of 2023 and growing between 10-12 per cent, the industry is expected to expand into a $120 billion ecosystem by 2028. "Out of this, roughly 40-45 per cent of the market is organised, so more than half is still unorganised," said Abhijit Routray, who is an associate partner at the consultancy.
Routray cited a notable growth headroom for catering services players in India, listing the opportunity for consolidation of unorganised players and expansion into smaller cities. Meanwhile, competition from online food delivery platforms and reduced volumes within a hybrid work model pose primary challenges.
"Largely we operate in four sectors right now, we are incubating new sectors and trying to see if we can have a play in new areas. We are not present in travel right now, both air and surface, where we would like to have some presence in another couple of years," Vohra said, elaborating on the brand's future plans.
Compass India, which operates eight kitchens across five cities currently, is eyeing Gurugram to set up its next kitchen in six months, followed by Chennai in nine months. Geographically, Karnataka remains the brand’s biggest market, while biryani is the top performer on its menu.