Who`ll be India`s McDonald`s?
by: Punita Sabharwal
Your place or mine?
How about Café Coffee Day where everyone can join us?
Such is the common dialogue between the youths of today when it comes to chatting over a cup of coffee. Apart from the college canteen the latest hang out zone amongst today`s youth are cafes, fast food joints and food courts.
Remember the local chaiwalla`s shop where everyone meets in college and later again gathers after years of bonding at the same place. That`s the kind of environment food service joints are offering to today`s consumers. Whether it is a birthday party at one of these joints or delivering food to your home, they are all trying to be a part of your daily routine and making every day special. Counting the endless occasions to celebrate, each and everyday food company is gearing up fast, not to leave any moment to be a part of customer celebration and spending.
Lot of dough
Over the years the consumer expectations have risen and they do not settle for anything less than the best. Also a new class of decision makers has been introduced in Indian families – the kids. They not only influence the decision of their parents on which restaurant to go and which cuisine to order but are also gradually becoming a part of mainstream consumers.
Along with kids, youth also plays an important role. Today, more than half of the Indian population is under 25 while two third is under 35. With such a huge group, no chain can afford to ignore their tastes and preferences.
As the growth in the double income household increases and the lifestyle of dining out witnesses an upward trend there has been a constant rise in number of restaurant chains, both domestic and international to tickle the Indian palate.
As per Ernst & Young, the annual turnover of Indian food services market including full service restaurants, quick service restaurants (QSRs), fast food joints, cafes and bars, street stalls and home delivery caterers, is estimated to be over Rs 32,500 crore. Currently, this market is largely unorganized. In terms of value, the penetration of chained /organized players is at a mere 2.6 per cent.
Experts feel, there is a plenty of room for growth as there is a burgeoning population that is undergoing a vast socio-economic change. The number of working women is also on rise in India and by far, India can be seen showing an upward trend, as far as eating out is concerned. Industry players are excited about the burgeoning middle class and see this as a major growth driver for the food service and restaurant industry.
Formats and cuisines
In the dining out space, equations are changing on how the food is served which can be called the invention of the West and an inspiration for the East. While American cuisines basically thrive on the quick service restaurants (QSR) format, Indian cuisine is more popular through dine-in concept given the cultural heritage. The QSR format is possible because the kind of food served by American chains is fast to cook (so the name, fast food restaurants) and Indian meals are generally time involving, thereby requiring proper dine-in.
Indians like the food to be cooked fresh instead of opting for pre-cooked meals that can be served quickly. Though there is a blurring line between the two preferences, both are adopting each other`s formats. Indian traditional food is getting modernized. India`s young generation is giving way to the spread of QSRs to set their footprints, as today`s generation wants to be American fast A recent McKinsey & Co. report on US operations stated that QSR is giving way to emergence of casual dine in format which serves fresh products.
Fine dine restaurants followed by quick serve restaurants are the most franchised food segments in India. The Café and Juice bar culture is also on the rise because of the younger population. Casual eating from kiosks has also increased following rise in mall culture.
The Indian food sector serves variety of food giving rise to a number of Indian food chains, pizza chains, burger chains, coffee chains, ice cream chains, cakes and pastry chains, etc. Bakery, confectionary and ice-creams are some of the food items that are mostly sold through kiosks.
Brownie Cottage sells the products comprising brownie, brownie toffees and brownie shakes through kiosk module only. The company operates take-aways too, which form a very important part of its daily collection. At present, Brownie Cottage runs 10 outlets across India. One of the prominent advantages of operating through kiosk is no staffing problem.
Talking about the formats used most Ashish Nanda, Partner, Retail and Consumer Product Practice, Ernst & Young says, “Traditionally, standalone formats across full service restaurants, QSRs, cafes and bars were very popular. However, the trends are fast changing; players are expanding presence by venturing into food courts and formats with modified offerings.”
India is a land of diverse tastes and cultures owing to which various kind of cuisines find acceptance right under the sun. The choice of cuisines depends on the city we are going in and the tastes of the people. The kind of format one uses depends on the kind of products being offered.
As you like it
Whether it is the pizza becoming a staple diet of Indians or the coffee culture invasion, India has seen it all. Even the pizza is being served in its different variations. Apart from localization pizzas are being served in newer formats like pizza in a cone and pizza by slice.
Students spending time at coffee shops taking back home fond memories have all given rise to India born Café, Coffee Day and Barista apart from international chains like Coffee World, Costa Coffee, Gloria Jeans, etc.
In terms of food and beverage, Indian market has good number of international operators coming in as India features high on the radar of international brands expansion. International chains are focusing on a new set of customers by offering breakfast meals which has still not evolved much in India. People are willing to go out for a cup of coffee, dinner or lunch but breakfast segment is still very nascent. Fast food is turning out to be the favourite of the younger generation which can be gauzed by seeing the boom in sales in international pizza and burger chains in India.
Quick food, quick returns
The sector seems to be booming with more and more players wanting to make a quick entry into the market to cash in on the growing demand. In fact, QSRs have redefined the concept of eating out in India. QSRs are gaining momentum as also the consumer expectations for food worth the value, served in sterile, hygienic ambience with quality and standardization of taste. So a QSR format without making a big hole in your pocket will give you a good experience. QSRs combine the convenience of fast food restaurants with the quality of casual dining. In the wake of growing popularity of QSRs newer formats with more innovations are expected to descend soon. As per experts, the convenience of QSR chains is driving their growth in international market, like McDonald`s and Yum! Brands. Most of these international chains vouch by the franchise route to enter and operate in India.
The international chains have been received well in the emerging markets giving them the boost to continue operations in India. Given the affordability factor of QSRs they are doing well despite the downturn in the economy. Pizza, pasta and burger chains are making fast bucks by serving fast food in a clean and hygienic environment.
Adopting various formats of service by these food chains means to have as many ways of serving the customer as they can. The QSR model has adopted various formats like outlets, kiosks and take-away joints, which offer all the more opportunities for growth. The crown of QSR in India, is held by Nirula`s who started serving burgers in India, in 1970, but the QSR business caught up with the wave during the 90s when international QSR chains brought in their formats and better technologies to serve the Indian masses. In this race of QSR both, domestic and international chains are competing with each other to grab a share of the pie. In the 90s Domino`s made a mark on the Indian terrain by franchising its brand in India.
Nirula`s operates in different formats of QSR like Family Style Restaurant, Nirula`s Express, Fuel Station Units, Pastry Shop and Ice Cream Kiosks. All the formats are different in size, the biggest format is Family Style Restaurant (FSR) and the smallest is Express and Kiosk. The bigger FSR also have pastry shops as part of the outlets. The menu remains the same across the formats except that the tandoori products are not available in fuel station units as they are located in petrol pumps. The ice cream kiosks serve only ice creams and they are mostly located inside a mall.

