The State of Quick Service Restaurants in India
Created on 20 Feb 2023
Wraps up in 5 Min
Read by 846 people
Updated on 22 Feb 2023
In the industry, a fast-food restaurant, usually referred to as a quick-service restaurant, is a particular kind of eatery that offers fast-food fare with little table service. In these kinds of restaurants, the preparation of the food that is served is limited to a quick last-minute step. QSR caters to the needs of both working professionals and young people.
Quick service restaurants are the chain models and franchise-based business operating across the world. Most of the restaurants are located where there is constant foot traffic, which is why you can find them next to movie theatres and retail centres.
QSR Industry Overview
For the past few years, the QSR market has been steadily expanding. The rising popularity of eating out in India's big centres among all socioeconomic class without waiting for a special occasion has increased demand for QSRs. As part of their leisure activities or shopping excursions, people increasingly prefer to eat outside. The 25 to 40-year-old millennial age bracket is where this tendency is most obvious. Also, as people are exposed to more diverse lives and cultures, they are beginning to establish their own tastes and dining out more frequently to try new foods.
Globally, QSR has a huge ecosystem developed over a span of time as Quick Service Restaurant (QSR) Market size and share of revenue was estimated to be at $267.1 billion in 2021, reached $283.85 billion in 2022, and is anticipated to reach $410.1 billion by 2030, at a CAGR of 5.8% between 2022 and 2030. Popular QSRs in the world who are dominating the industry :-
- Subway IP LLC
- McDonald’s Corporation Restaurant Brands international INC.
- Yum Brands Inc.
- The Wendy’s Company
- Domino’s Pizza Inc.
- Burger King India Pvt.Ltd
- Coffee Day Global Ltd.
- Tata starbucks Private Limited
- Westlife Development Ltd
- Hardcastle Restaurants Pvt. Ltd
Public QSR Players in Decline
McDonald's dominated the QSR industry until recently, but slowly, lifestyles have changed. Since they are their biggest customers and even encourage the elderly to eat fast food, McDonald's has long concentrated on winning over the minds of young people. Yet, in recent years, parents have placed a strong emphasis on nutrition and food quality, which has put the fast-food industry at a disadvantage. The rate at which Millennials eat at fast-food restaurants has decreased by 5%, and 51% of Millennials indicated that they are now eating less at McDonald's. Due to the restaurant's unhealthy cuisine, the Millennial generation, which is both parents and a large consumer of fast food, has decreased the number of times they visit. And now they are switching to a healthier diet.
Additionally due to the fact that McDonald's has been in business for a while, it has developed a regular menu over time that needs to be updated. Therefore, they occasionally need to come up with new or seasonal products to pique the interest of their clientele. If customers are simply given the same old menus that never include anything new, they will likely get bored. The fast-food chains can lose customers as a result of this. Yet, the new addition to the menu ought to be reasonably priced and something that the public finds appealing.
On the other hand, new companies like Burger King are attempting to tap the market by introducing new additions to the food selections. They are delivering the flavour that consumers want and the flavour that is ideal for the market. And these rivals present McDonald’s with stiff competition in this market when it comes to consumer taste and preferences. And as the Indian food industry is booming exponentially, restaurants like Burger King are seizing the opportunity.
India's food service market is anticipated to increase at a CAGR of 11.19% from $41.1 billion in 2022 to $79.65 billion by 2028. In accordance with the model, compared to the dine-in sector, the take-away and online ordering categories are predicted to grow at significantly higher rates between FY2021 and FY2025, with about 18.0% and 17.4%, respectively. As due to the country's rapid urbanisation brought on by population growth, economic expansion, and an increase in people's disposable income, eating out has become increasingly popular.
In addition, the expansion of tier II and tier III cities and the growth of fast-food franchises in impoverished areas have increased the number of quick service restaurants. Additionally, middle-class spending in tier II and tier III cities has increased by 108% over the past two years, from 2,500 to 5,400. This will be a result of major fast-food corporations expanding their presence in India's smaller cities and gaining from a younger clientele, including McDonald's, Burger King, and Domino's, among others.
The tendency to eat out more will undoubtedly increase the customer base and revenue of the industry's participants. Having major industry players will increase the visibility of other businesses operating in this field, ultimately leading to an increase in the market share of the QSR sector as a whole.
Private Players come for a bigger slice
But as “Fast food” is no longer just greasy burgers and fries or heavy, cheesy pizzas, today's youth is undergoing fundamental lifestyle changes, and they are becoming more mindful of what their bodies need ,which may stunt the expansion of large corporations like McDonald's, Subway, and Domino's Pizza.
QSR industries will find it tough to grow more until and unless they make a radical shift to how they prepare meals.Future trends in the QSR business will be greatly influenced by this revolutionary development and consumer lifestyle trends. Nonetheless, new competitors have emerged, such as The Burger Company. While they only operate in India for now, they have started capturing the market by positioning themselves differently in terms of giving an Indian touch to American cuisine, which can affect the popularity of existing players like McDonald’s, Burger King and others. It follows that there would be fierce rivalry when these new competitors enter the market and introduce creative meals that are both healthier and tastier.
On the other hand when it comes to the beverages sector, coffee companies like Starbucks will face stiff competition from emerging brands like Rage Coffee. This plant-based coffee business sells coffee at a very affordable price and adds health advantages to it.
The Bottom Line
Considering that new companies are entering the market and quickly seizing the market, the future of the QSR industry seems to be a little tricky for the industry titans. As for millennials, the price of the product and the value it delivers matters a lot when it comes to health and lifestyle, but revolutionary changes can make the future fantastic for the companies who are eager to bring the change and develop an ecosystem which is nutritious and delicious as well, As “Healthier” is the new “flavour” in this generation.
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