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Fast Furious: Cover Story
Fast Furious: Cover Story
Fast
A foodservice market of
the magnitude of India,
growing at a scorching
and
25-30 per cent year-
on-year, has barely
Furious
10-15 QSR brands. The
opportunity is huge and
so are the challenges. So
what exactly are these
bottlenecks, and why does
so much of fast food in
India look so American?
By Bhavya Misra
marketing at Dominos India: India has a rich there is a long gestation period, primarily to put
bounty of popular street foods, but the issue with up a viable supply chain. Huge investments in
Indian food formats is that they lack scalability and the form of time, effort and capital are critical to
consistency of delivery. This is because there is no get the back-end infrastructure in place before the
standardisation of processes and ingredients. For operation is up and running, he says.
example, a Dominos pizza would taste the same,
whether you eat it in Delhi or Patna or Mysore. This
standardisation is not possible with Indian street
foods. Some QSR chains are however focusing on
this and trying to replicate the western fast-food
model with signature Indian foods.
Manpreet Gulri, the development agent for
Subway in India, adds: There are a few successful
Listen home-grown QSRs in India that are doing extremely
to your well. But to build a successful QSR, a brand
needs consistency in product and quality, and this
customers. comes only through standardisation. Some of the
Innovate domestic QSR success stories include Caf Coffee
continuously. Day, Barista, Haldirams, Bikanervala, Sagar Ratna
and Nirulas.
Think long Bakshi notes that QSRs make for a high capex
term. business, requiring huge investments in not only
the front-end but also the back-end. Food safety
Vikram Bakshi,
managing director
& JV partner,
McDonalds India
(North & East)
QSRs in India :
Snapshot
Total Number of Outlets
as of May 11
McDonalds India
216
Dominos
that QSRs would always have a larger pie of the IEO business. Given a typically high employee churn, it
368
(Informal Eating Out) market and their life cycle becomes even bigger challenge, Dominos Rajpal Subway
would always be far longer than that of a fine dining says. 204
restaurant. While Yo! Chinas Kapur agrees on the lack of
Yum Brands India
Dheeraj Gupta, managing director of Jumbo trained manpower in India as a big hurdle for QSR
King Vada Pav, offers a more optimistic outlook on outlets, he also mentions infrastructure issues like 300 Plus
business viability of QSRs. A well-run QSR unit cold chains and power and water supply as other Nirulas
should break even in 2-3 years, he says. bottlenecks. A complex maze of licensing and 85 Plus
Vinod Mahboobani, vice-president of business taxation laws which differ from state to state is
development at Yum! Brands India, believes the the other major irritant, he says. Yo! China
life cycle of a QSR would vary across brands. Big Jumbo Kings Gupta seconds this view. Because 50 Plus
multinational QSR chains figure it out fairly quickly of multiple taxes varying from state to state, uniform Jumbo King Vada Pav
as recall for these brands already exists. The QSR pricing which forms the essence of a national
43
model is far more scalable than a FDR or a CDR brand becomes difficult. He also mentions high
model due to the higher levels of transactions that it logistics costs as a major problem. Transportation Cafe Coffee Day
drives. If you get the consumer proposition right and costs are high because the current QSR brands 1200 Plus
offer the right value, the returns are very attractive. have relatively smaller footprints. These should