Why are startups in the food and beverage services industry failing in india?

Abstract

Despite being an exciting and potentially lucrative industry, startups, particularly cafés in the F&B industry, are failing within the first three to five years of establishment. From managing costs to keeping up with ever-evolving consumer demands, the challenges are manifold. This paper delves into four major challenges: Cost Management, Inventory Management, Understanding Consumer Preferences, and Digital Marketing, to assess their relation to café survival. The study aimed to adopt a mixed-method approach, using both quantitative and qualitative methods. With the help of Ethnography Interviews with six cafés, several strategic approaches hindering the café's growth were identified. On the other hand, the Consumer Survey of more than 200 customers helped in understanding what drives consumer choices in this industry, a crucial research many establishments failed to conduct at all. This mixed approach helps in identifying the impact of operational inefficiencies, pricing strategies, and the significance of affordability and digital presence in café selection. By synthesizing theoretical insights with empirical findings, this research provides actionable recommendations for café owners to thrive in a competitive market.