India’s quick-service restaurant (QSR) market is expected to clock a compound annual growth rate of 23 percent between 2020-2025 as more and more brands are entering into the space, large chains are deepening their reach in Tier-I and II cities and benefit from a younger demographic, shared a report by Edelweiss Securities.

Becoming the highest growing sub-segment in the foodservice game, the QSR segment stands at 23 percent CAGR. And, with the segment being the infrastructure, delivery-ready, it went through the greatest innovations of all time.

Technology as a Game-Changer

“Technology adoption in the space of QSR has been immense. Automation is something a lot of brands are adopting. I would not say it is innovation, I would say it is a very generic adoption that everyone is adding today. For a QSR, I believe consistency and sustainability are the most crucial things,’ shared Biraja Prasad Rout, Founder, Biggies Burger by adding that as part of the QSR ecosystem, the Indian food ecosystem has been growing massively and has been seeing massive makeovers since past 5 to 6 years. To cope with that the brands like us have been focusing a lot on stabilizing, improvising, and bringing new effective majors in terms of SOPs. Either it could be software, hardware by automation, new research and development of products, or through operational aspects as well.

Also, if we look at data, as of FY20, organized QSRs had a market size of Rs 348 billion. Future growth in the segment will be driven by chains in the QSR market, which accounted for 54 percent of the total QSR sub-segment in FY20 and are estimated to reach 64 percent of the QSR sales by FY25.

“Technology has played a major role in controlling our expansion. From detailed reports enabling data analytics on sales through digital billing to SaaS platforms enabling operations, we've been using all tech available. Our supply chain management too is completely digital,” added Rajat Jaiswal, Co-founder of Wat-a-Burger that has moved to complete digital payment management for their franchises a few years back and that has enabled efficient and planned growth for them while keeping information transparent for all.

Similarly, for GoodDo, two aspects of technology are central to their expansion. Product-related technology as it pertains to the development of newer and more improved plant-based meats that let them provide more fun, innovative and realistic alternatives to meats. Also, the utilization of new manufacturing technologies to improve the uniformity and throughout of production helps them scale some particular dishes faster and with better quality control. 

“On the business side, the use of cutting-edge billing and inventory management systems helps us streamline our operations, enabling swifter responses to change dynamics. Of course, the use of new-age marketing tools in social media with geo-tagging is central to being able to target the right segment in the right areas,” pointed Abhinav Sinha, Co-Founder, GoodDo.

Keeping a Check on Menu and Pricing

Covid gave a big blow to the foodservice industry on account of the lockdown in the country, QSR emerged victorious by innovating themselves to the core. From adopting new technologies, delivery models, menu innovations to backend and frontend streamlining, it has gone through the biggest innovation of all time. In the QSR industry, you are mostly reaching to masses, which means you have a huge audience to cater to and in lesser time your taste can become obsolete. Therefore you need to ensure that you are offering something new every time.

“We have always worked on strengthening our menu and array of offerings. We introduced new recipes infused with fresh flavors that would impress the Indian palate. At Wat-a-Burger we have always kept it pocket-friendly. Our menu now happens to be the only one to start burgers at Rs 29 and with our soon-to-launch gourmet range, we shall be catering to customers with the segment above Rs 500 also. This gives us a wide range of Rs 29-500+ to offer to our customers,” added Jaiswal.

The brand has adopted various methods of quality control and recipe development which makes their consistency easy to manage across the country. Additionally, they have a fully equipped kitchen embedded with a high-end SAAS-based tech solution to manage quality, inventory, payments, cash flow, invoicing, and procurements.

“This not only increases margins with smart inventory management but also saves time and controls the quality,” Jaiswal further pointed out.

Similarly, Sinha has focussed on taking plant-based meat and dairy alternatives to the masses in an affordable QSR format. With backward integration with GoodDot, India’s leading plant-based meat company, GoodDo is India’s very first vegan QSR chain.

“With aggressive pricing, e.g., UnMutton Keema Pav at Rs 29, we have also dispelled the myth that vegan food has to be expensive. Also, the use of ambient-stable plant-based meats has helped us streamline the supply chain, minimize wastages and minimize food and operational costs,” he shared by explaining that there is a growing awareness about the need to own categories and develop sustainable meats by various QSRs, which necessitates innovation around business models as well as business processes.

“One of the general categories of innovation that I have noticed is the adoption and move towards industrialized food production for Indian-origin products and product categories, which allows economies of scale and standardization,” he commented.

And, there is no denying that across the QSR industry as a whole, there are lots and lots of exciting innovations - some successful and some not quite so.

Customer is the King

“There are four pillars of customer acquisition. First is price parity to the person of the product. India is a price-sensitive market. As a national brand, we need to have products rightly configured for different demography. For instance, T1 and T4 have different purchase parity but as a national brand, we have to curate such a brand that can adapt for the consumers. It is all about affordability quotient and designing products as per the affordability of the consumer. Secondly, understanding the palette of the consumer base as it is very crucial for the Indian mindset and it is universal. Thirdly, it’s the innovation and adoption of the newest trends and changing menu/ product to the consumer. The fourth pillar would be technology adoption to reach out to the consumer making them aware of how the brand is different from the others. Innovative marketing strategies to engage the consumer and create a virtual image of the brand,” explained Rout.

According to Jaiswal, product acceptance and satisfaction cost control and acceptance, complaint resolution, and loyalty rewards are universal mantras for everybody in the customer-centric market.

“Focus on quality, differentiated value proposition, clear and positive communication and consistency across the whole customer experience are key attributes for successful customer service,” added Sinha who at GoodDO consistently strive to maintain or improve the quality of their dishes, and the result of that constant improvement is ever-increasing ratings and long-term repeat customers.

Not only this, these players are constantly developing and propagating clear and consistent communication around the brand values as well as their USP. Being in the QSR industry, customers expect a consistently high-quality experience across all locations and all cities. Of course, there is still a lot of room for improvement across several of these and other dimensions and these brands actively keep looking for those opportunities to learn and improve. 

As per Edelweiss report, the entire food services market plunged 82 percent year-on-year in the first half of FY21, the contraction that organized QSR chains such as Domino’s, Burger King, McDonald’s (West & South) reported was restricted to 45 percent; by September recovery was already at 85 percent of pre-covid levels.

Also, QSR chain Burger King reported a blockbuster IPO last year; meanwhile Jubilant Foodworks, which operates the Domino's pizza franchise in India has expanded the chain to new markets and territories and has most recently acquired the franchise right of QSR chain Popeyes in India.