Homegrown Chains – Making More Than A Mere Dent In The Indian QSR Market

2014 saw a ton of business sectors and industries go through some pretty tough times. Sectors like power, housing, agriculture, horticulture and mining (to name just a few) really suffered. But, in a country of over a billion people, the one sector that seemed to be absolutely immune to this ‘economic ache’ was the food retail sector. That’s right! “Food is one’s best friend” indeed! With Indian households seeing a growth in their disposable incomes in the past decade, the Quick Service Restaurant (QSR) sector made Rs. 60 billion in spite of inflation and the economic slowdown.

International brands continue to dominate the industry with over 60% market share, in terms of the number of outlets. However, times are changing and domestic QSRs are marching in determined to make a permanent place for themselves in the Indian quick service restaurant sector.  

Some facts and figures:

By 2015, QSRs are estimated to grow at 30% CAGR (Compound Annual Growth Rate) as opposed to the mere 10% growth estimated for the Indian food service sector – trak.in

By 2017, the QSR segment will reach Rs. 117 billion (with a yearly estimated growth rate of 26%) – www.foodnavigator-asia.com

50% of the Indian population is eating out at least once every 3 months & 8 times every month (in metros) – National Restaurant Association of India

Jubilant FoodWorks

Welcome the Indian QSR giant! Jubilant FoodWorks Limited, a Jubilant Bhartia Group Company has the franchise of two international brands – Domino’s Pizza and Dunkin’ Donuts.

Domino's Pizza

     Domino’s Pizza

India’s largest and fastest growing food service company, Domino’s Pizza boasts a market share of 70% with close to 900 restaurants in almost 200 cities (as of May 2015)

Dunkin' Donuts

     

     Dunkin’ Donuts

Jubilant FoodWorks brought the world leader in donuts, baked goods & coffee to India in 2012 and in less than 3 years, Dunkin’ Donuts has 56 restaurants across India (as of May 2015)

   Café Coffee Day

Café Coffee Day

With an array of delightful coffees, sinfully scrumptious cold beverages, sandwiches, pastries and more, Café Coffee Day aka CCD has it all. Currently valued at $1billion, it is India’s biggest café operator with 1,620 outlets nationwide. CCD Enterprises just announced its hopes to raise $250 million through the Initial Public Offering (IPO). It will offer 20% of its stake and may be listed as soon as September this year.

Goli Vada Pav

Goli Vada Pav

Amidst the craze of Indian restaurants emulating international food trends, Goli Vada Pav is a breath of fresh air. Started in 2004 with the goal of developing a fast food chain dedicated to serving only Indian snacks, Goli Vada Pav has almost 300 stores in over 60 cities. In 2011 VenturEast, a VC firm invested $4.7 million in the domestic food chain.

Republic of Chicken

Republic of Chicken

This innovatively named food chain is one of the largest homegrown poultry producers and retail brands in the country. Supplying premium product to giants like KFC, Wal-Mart, Reliance Fresh and Spencer’s, ROC currently has 120 outlets across India and is expected to open 50 more by the end of the year.

U.S. Pizza

US Pizza

Don’t let the name fool you, this food chain is 100% Indian! Started in 1995, with a current count of 100 outlets in 40 cities nationwide, US Pizza competes with foreign titans like Domino’s and Pizza Hut.

Smokin' Joe's

Smokin’ Joe’s

Amid the varied international eats we Indians now have available to us, pizza is most definitely a favourite! Founded in 1993 by Parsi entrepreneurs, this popular pizza chain has over 60 restaurants across the country.

Faasos

Faasos Food Services is currently conducting the highest 

Faasos

fund-raising efforts by a homegrown QSR chain. Backed by Sequoia Capital, Faasos is raising $20 million in a fresh round of funding led by Lightbox Ventures. This Pune-based company has 90 outlets in 6 cities and is looking to make its mark in 10 additional cities within the next year. By March 2016, Faasos expects to cross the Rs.100 crore revenue mark. "We expect to break even by March 2018 on revenues of Rs 450 crore," Jaydeep Barman, founder and CEO of Faasos, said in an interview.

[Fun Fact – Faasos is the acronym for Fanatic Activism Against Substandard Occidental Shit]

A strong brand image, fascination-factor and large store areas allow foreign brands to cater to a much larger number of customers than homegrown chains. Nevertheless, the number of domestic chains resolute to compete with international giants in India is rapidly increasing, the amount of capital and funding received by these chains is rising and the quality and uniform standards they operate by is growing! Many analysts believe that the Indian QSR segment is still in its adolescent stage – in need of better infrastructure, superior management and heightened franchise standards. It might still take these underdogs some time to be on par with massive chains like McDonald’s or Subway, but they’re definitely headed on a path to colossal success!

Blog contributed by Sanaeya D -

CommScribe Communication Solutions