Teji Mandi Explains: QSRs - Emerging strong growth category within the organized food market
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Growth Triggers in Place for the Organized Food Industry

As per the industry report, the total food industry in India stands at Rs 4.2 lakh crore, growing at 8% CAGR over 2015-20. The organized players have grown at a faster pace than the industry, growing at 14% CAGR over 2015-20. Their market share increased from 29% in 2015 of the total industry to 37% in 2020.

The growth is likely to accelerate further with the evolving lifestyle and increase in disposable income of the middle class. This has led to increased occasions of socializing and eating out. The rise of food aggregators has also contributed to the growth of the organized food industry with more home delivery orders.

QSRs Outperforming Organized Food Industry

In 2020, the share of chained restaurants was 9% of the total food industry. The market share is bound to go up in the future for QSRs taken into consideration the pace of new store openings. All the leading QSRs like Dominos, Burger King, and McDonald’s have seen a temporary halt in their store expansion plans due to COVID. However, they remain aggressive with their expansion plans.

QSRs Fastest to Recover Post Lockdown

Post break out of COVID, there is a growing preference for hygiene among the diners. It made QSRs a natural choice for them. Hence, while the overall hotel and hospitality industry continues to remain under pressure, QSRs were the fastest to recover.

As per a report from Antique, Jubilant Foods managed to open more than 1,000 stores (out of 1300+ outlets) within 50 days of the lockdown. Westlife Developers has also opened 197 stores by May 2020 out of 304 stores of McDonald’s. It has extended delivery services of the 183 newly opened stores. Burger King has also opened 93% of its outlets as malls were allowed to be re-opened.

Different Growth Strategies

Jubilant Foodworks is best placed among the QSR segment due to its vast store networks. It operates Dominos brand which is very popular in the home delivery segment.

Other listed players like Westlife and Burger King have a negligent presence in the home delivery market. However, they have their separate market position and are targeting a different customer base.

Westlife's McDonald is positioned more as a lifestyle-based hangout restaurant. While Burger King is into serving quick bites targeting people who visit malls often.

Closing Comments

All the listed peers have been successful in their approach to attract customers. Though Jubilant is firmly placed as a market leader, the market is large enough for all the companies to grow. And, all the companies have stayed on that path with aggressive store expansion plans for the future.

Free Press Journal

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