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The upside of India’s fast-food explosion

20 Sep

mcdonalds-indiaThe Wall Street Journal reports that India’s fast-food market is set to double in size by 2016. With residents gobbling up more pizza, burgers and fries, that’s good news for the likes of McDonald’s, KFC and the rest as the country’s industry will soon be worth more than a billion dollars. Much of the growth is going to come from mid-size cities, where average household spending on such foods is expected to grow by 150 per cent.

Fast-food haters will doubtlessly harp on this trend, either with the inevitable obesity criticisms or laments about the spread of American commercialization. Even the WSJ article couldn’t help but mention India’s rising obesity rate.

The counter-intuitive fact, however, is that this is actually good news. As I detailed in Sex, Bombs and Burgers, fast food’s spread is a by-product of prosperity. When McFood goes into rapid expansion mode in a given geography, it means the country’s agricultural system has become both self-sufficient and efficient. For all the criticisms of McDonald’s and the like, fast food also contributes back into that system by introducing further efficiencies. The chains are, after all, veritable food factories.

Rapid growth is also a sign that people can either afford to eat out, or that they’re too busy to cook proper meals. Both situations are evidence of an emerging middle class. The numbers, of course, bear this out. The chart below, from the Reserve Bank of India, shows the dramatic growth in incomes over the past few decades:

india-incomes

The chart also shows quickly declining population growth, which is another sign of increasing prosperity. As people become better off they have fewer children, both because they’re too busy to tend to them and because they don’t need as many hands to help support the household. India’s birth rate is now only slightly higher than the U.S. rate, with most advanced nations close to or below the natural replacement level of two children per household.

Technology is behind much of this prosperity increase, with India not just industrializing, but also leap-frogging much of that whole process and going straight to advanced modernity. The Indian information technology industry alone is worth $67 billion, while its effect on the larger economy is estimated to be at least that much once over. As MIT professor Iqbal Quadir puts its, “the industry has given rise to ripple effects by increasing demand in housing, transport, insurance, entertainment and other industries.” He didn’t mention it explicitly, but fast food would be on that list.

Fast food, while demonized in the west, is in many ways a natural by-product of prosperity. Its existence and growth in a country should be considered a good thing, because it indicates that positive economic development is happening.

I’ve written before about the knee-jerk reaction of linking obesity to fast food and why it’s not correct to do so – sedentary lifestyles are equally responsible for it, if not more so. Even still, it’s only recently that plumpness has been shunned. For much of history and in many developing countries today, it has been and is considered a status symbol. As one article on obesity in Africa puts it, “dimples, cellulite and an ample stomach are something to be proud of. Body fat is a sign you’re not poor; it means you can afford to indulge.”

None of this is to say that obesity is a good thing. It’s of course a well-established health problem that needs to be addressed wherever it’s occurring. With India skipping past industrialization, the country’s leaders can also figure out a way to minimize this unfortunate by-product of prosperity before the population becomes too bogged down in it, which is the case in many Western countries. Some strong nation-wide efforts in physical education would be a great place to start.

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4 Comments

Posted by on September 20, 2013 in food, india, obesity

 

4 responses to “The upside of India’s fast-food explosion

  1. Marc Venot

    September 20, 2013 at 12:34 am

    In earlier times bottled bottles like Coca or Pepsi Cola had success because in a lot of places those who didn’t had the resistance to drink contaminated water had to sterilize it.

     
  2. Ben Klass

    September 20, 2013 at 12:45 am

    Man I’m not gonna lie, sometimes when I get bored with the fast food menu here in Canada I go to the McDonalds website and do a virtual tour. Their Indian offerings look like the bomb.

     
  3. Michael Elling (@Infostack)

    September 20, 2013 at 6:34 am

    Ahhh, time for some Rubens! http://bit.ly/16dIzm1

     
  4. kavita Bisla

    September 20, 2013 at 12:37 pm

    Good Read Peter. Copying on my FB wall for all my Indian Friends.

     
 
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