QSRs can unlock opportunities in 2022
I remember the days back in my childhood when restaurants used to hand over menu cards that were 20 pages long, with each page listing 20-25 dishes. Now the server just hands you a QR code and whispers discreetly that a few items are not available. COVID has been a much needed vanity check for brands, especially QSRs.The magic 'twosome' of focus and discipline are back.
The silverThe silver lining of 2021 has been the success of IPOs in the QSR space. This has created a never before opportunity for investors that are looking to diversify their portfolio beyond tech. Those who missed the bus in the first round will want to join the party in the second round. QSR brands that expand in a focused manner will grow visibly. More IPOs will be seen over the next decade or so, from Indian origin brands.
The ‘business mantra’ for 2022 will be to ‘go an inch wide and a mile deep… instead of “go a mile wide and an inch deep.’ As this philosophy gains acceptance- The most disciplined brands will win. Focussed brands that have survived the pandemic, will scale rapidly to 1000+ stores. Their familiarity has served as a soothing balm for a world recovering from the ambiguity of COVID. They will continue to innovate, offer value and retain the trust they have earned. Together with the international chains, they will spawn dozens of companies in the contract manufacturing space to meet their needs.
Around this hub will be an ecosystem of cloud kitchens, online deliveries and offline retail will find their own space in people’s lives, they will expand the market rather than cannibalize each other.
India is a very large market. Even if only 20% of us belong to the affording class, that number is equivalent to the entire population of the USA. This understanding of the power of India’s consumers, has dawned universally, in the last decade. From cricket viewership to mobile phone purchases India is leading everywhere.
With improved road infrastructure and connectivity brands will find it easier to penetrate tier 2 and tier 3 towns. Restaurant brands will be able to unlock their potential and amplify availability million-fold.
With the virtual presence of QSRs amplified beyond physical locations, off-premise dining will grow. On the consumer side-
1.As every individual seeks to contribute to household income, the demand for eating out will increase. Indians will be eating out 14-15 times a week from the current 2-3 times.
2. Occasion-based social-dining is back with lockdown relaxations, even as
Mobile ordering has soared. Curbside pickup has found new life. Third-party delivery has morphed from an experiment to a necessity. Drive-throughs have found more takers
3. Customers will be spoilt for choice, hence businesses will have to offer greater ‘value, efficiency and trust.’
4. There will be a perceptible improvement in restaurant designs as the youth will want to associate with brands they have a rapport with.
5. Each consumption opportunity will have to be serviced appropriately- for e.g. the digital menu will contain products that ‘travel well’ for delivery and a separate in-store menu will offer food that is best served hot at the store itself.
There is no better time for entrepreneurship than now and no better place for it than India. More and more people want greater ownership of their future. Franchising as a business model will hence, grow rapidly and this will be a huge boost to the QSRs. Entrepreneurs will discover many options to start a business, cocooned within a brand’s safety net. We have survived one of the most difficult periods in human business history. The table is set for ingenuity and customer-centricity. While none of us will look back fondly on the pandemic, we will always have to acknowledge that this period helped us fast track into a new era for the restaurant industry.
