By nusra, Editor
Jun 09, 2023 / 9 MIN READ
With over 1,500 stores, Domino's sells more pizza in India than anywhere else in the world, barring the US. Domino's growth is just one example of how the demand for quick service restaurants (QSR) is peaking in India. In the next three years, the QSR market is pegged to reach Rs 827.63 billion by 2025 because the model has shifted from an affordable format to comfort food. And this transition in consumer perception has enhanced the addressable market in the industry.
Creating a Delicious Journey
Indian quick service restaurant industry revenue is estimated to grow by 20-25% in FY2024 over FY2023, driven by improving average daily sales (ADS) and store additions, reported ICRA.
“The market paradigm of sales has changed drastically for QSR brands. There is a huge scope of success for QSR brands in tier-2 and tier-3 cities as these cities are the emerging markets for fast food chains, and as India’s largest Home-grown burger chain, these cities are of utmost importance to us. These cities offer advantages like lower workforce acquisition expenses, cheaper raw materials, and affordable rental properties,” shared Kabirjeet Singh of Burger Singh that has grown to over 50 cities in India.
Similarly, another home-grown QSR chain Biggies Burger that recently opened its14th store in Bengaluru, is expanding its presence deep into the city bringing hyperlocal approach to its expansion plans. The QSR chain aims to have 350 stores across India by 2024. Biggies Burger currently has over 130 stores in the country.
Biraja Rout, Founder of Biggies Burger, said, "We see tremendous potential in tier II and III cities, where there is a growing demand for global QSR food options with an Indian touch for it. With a great deal of demand for our stores in these locations, we are confident that we can meet this demand and offer customers the same quality, taste, and value that they have come to expect from our brand."
Localising the Menu
The main ingredient of any QSR is the menu. While the recipe for QSR success beyond the borders of India has been standardization, here, the menu must be tailored to hyperlocal tastes. A brand can scale up only when they bet on the right products that suit the consumer’s palate. Food habits, cultural nuances, and religious beliefs must be taken into account while curating product offerings. It is why even well-known QSRs like McDonald's, KFC and others customize their menu to Indian tastes.
Earlier in April, KFC has launched, The KFC Chicken Roll that has the OG hand-breaded extra crispy and juicy chicken strip, wrapped in a warm flaky paratha, topped with Spicy Garlic and Nashville sauces, and crispy onions.
Keeping as per the trend and consumer requirement, Taco Bell recently introduced Naked Veggie Taco - a disruptive, plant-based protein option in its diverse menu that compliments the existing fan-favorite, Naked Chicken Taco.
Commenting on the same, Gaurav Burman, Director, Burman Hospitality Private Limited, Taco Bell’s exclusive franchise partner in India, said, “Taco Bell® India has established itself as the most innovative QSR in the country. We worked hard to create a vegetarian option that was as delicious, nutritious, and unique as our Naked Chicken Taco. I am excited to be able to offer our customers and fans this amazing product at such good value.”
Digital First
The success of a QSR brand hinged on real estate for a long time. The location made a material difference in footfall. Today, Indians are more digitally savvy. Add in the aftermath of COVID, and they have a deeper preference for deliveries and takeaways. From integrating with third-party delivery aggregators to activating voice ordering and other technologies that improves customer experience and streamlines operations is beneficial. McDonald’s in West and South India had recorded a massive growth this quarter and its own delivery channel, the McDelivery platform, saw a robust rise in user base, as digital sales improved to ~62%, led by SOKs (Self-Ordering Kiosks).
“FY 23 was a landmark year for Westlife Foodworld. Our strong performance, delivered by our omni-channel strategy, menu innovations, store modernization, and cost optimization strategies, is a testament to our scale and agility. We were not only able to strengthen our value proposition but were also able to capitalize on our momentum to promote long-term sustainable growth for all our stakeholders,” shared Amit Jatia, Chairman, Westlife Foodworld Limited.
High on Expansion
If we look at the numbers, the average Indian eats out 6 to 8 times a month. In other countries, it is 30 to 45 times. The numbers are evidence that there is a lot of headroom for growth of a QSR brand in India. Yet, the segment is dominated by established international brands, which contribute about 53 percent of the total revenue and make up 44 percent of the market in outlet counts. The pie’s remaining portion is a mixed bag of home-grown fast-food restaurants, takeaways, and cloud kitchens.
Korean-pizza chain GOPIZZA that currently operate 30 outlets aims to have 100 operational locations by the end of financial year 2023 across Chennai, Pune, Delhi, Mumbai, Ahmedabad and Kolkata and key Tier-2 cities such as Chandigarh, Jodhpur, Jaipur, and Kochi in the coming years.
“GOPIZZA will be a food tech brand that will pave way for Digital transformation of food and beverage allowing humans and technology to collaborate hand-in-hand in order to ensure a great customer experience,” mentioned Mahesh Reddy who envisions the brand will expand swiftly owing to its versatility of opening an outlet in an area as small as 100 sq ft and upto 2000 sq ft and across verticals such as Highstreets, Malls, Highways, Corporates, Colleges, Shop in Shop and Airports across the country.
With over 1,500 stores, Domino's sells more pizza in India than anywhere else in the world, barring the US. Domino's growth is just one example of how the demand for quick service restaurants (QSR) is peaking in India. In the next three years, the QSR market is pegged to reach Rs 827.63 billion by 2025 because the model has shifted from an affordable format to comfort food. And this transition in consumer perception has enhanced the addressable market in the industry.
Creating a Delicious Journey
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