Restaurant Franchise Opportunities

Expansion Mar, 01 2017

How India’s top Restaurants battle with supply chain

QSR chains demand and use of locally sourced ingredients is increasing.

By Nusra
Sub Editor

Hundreds of restaurants today are getting more sustainable and automated when it comes to getting the procurement right. Restaurant owners and operators are constantly eyeing sustainability as a value proposition – and rightfully so. This all change is happening because of the consumer getting more engrossed in what they are eating. Consumers today are looking at all things healthy and natural focusing on the freshness and the authenticity of the produce. According to a research done more than half of the customers who went through this research were happy eating fresh and local produce. Similarly, restaurants also focus on locally sourced foods and ingredients in terms of cutting their cost.

Evidently, consumers choice and their liking for fresh local produce is being heard and restaurants are responding to this changes by adapting all best tricks to get the supply rightly delivered at the restaurant and this trend can be seen across the spectrum of the food industry.

According to FranchiseHelp reports, QSR chains demand and use of locally sourced ingredients is increasing. And Technomic Menu Monitor data shows "local" call-outs on restaurant menus has increased in the past five years for that matter. As covered in the report 150 percent for desserts, 137 percent for main dishes and 82 percent for appetizers have increased in the overall menu.

Domino’s Pizza which is the largest and one of the most profitable food companies in India has a very complicated supply chain transferred into very manageable. The fast food chain which work on a network of 250 suppliers in India operate out of 10 factories. The raw material that the QSR chain buys is a lot of fresh produce. “We buy around 25,000 tonnes of vegetable and about 15 million litres of milk is gone in processing the cheese,” shares Sandeep Gugnani, GM & Head-Supply Chain, Dunkin Donuts (Jubilant Foodworks) adding that the group owns temperature controlled centres, vehicles and their logistic is also fully automated. “We have done a lot of automation in the supply chain in last few years,” adds Gugnani as Domino’s was one of the first brands in India to bring the culture of online or home deliveries.

Cutting the challenges

How we get the material to the hotels or restaurant right and in good condition is a biggest issue. Supply chain plays an important part in restaurant procurement. Though, there are hurdles and challenges restaurants are continuously cutting their procurement short to overcome these challenges. “The road transportation and the amount of time to get the supply right is the biggest challenge, points Basil Massey, Director-Procurement, Duet India Hotels.

We can say that these trends are all an answer to the ever demanding customers but freshness is a big challenge because restaurants are sourcing a large amount of vegetable and controlling its freshness at source is a big issue, reliability is another issue. Also, availability of good quality cheese and milk in the market is a big issue. We have been noticing that instead of getting the supply right restaurants have to strengthen their internal system so that they do not compromise on quality.

So the bottom line is that we can all expect to see more fresh and local offerings among QSRs in the near future. It’s a proven method to not only lure in customers but catering to the need of ever demanding existing and the new age customers. The supply chain issue can only be sorted if we have all the roadblocks sorted in order to be recognised as a food nation. 

Related: How service charge wariness is hurting the Casual dining segment

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