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India has more KFCs and Pizza Huts than Canada or Mexico, and they’re customized too

  • Outside the US, compared to North and South America, India has more KFCs and Pizza Huts.
  • There are more quick service restaurants in India than bars, clubs or even full service restaurants
  • Top two Indian franchises operating KFC and Pizza Hut have changed store formats, their amenities and even menus to cater to Indian pockets and palates.

One would think that American fast food brands like KFC and Pizza Hut would be more popular on home turf than abroad – such as in Canada and Mexico. But they have spread their wings in countries like China and India.

India has more Pizza Hut outlets than Australia, although China has more of these stores than the US. KFC also ranks very close to Australia in terms of numbers – proving that Cornell’s chicken and pizza has caught on with the Indian palate.

QSR – Not a bar or ice cream parlor

India has 400 million millennials – 120 million of them in urban areas – who prefer quick service restaurants or QSRs to pubs, clubs, bars, coffee shops and even ice cream parlours. There are 2.8 million QSR outlets in the country, accounting for 34% market share in food outlets and double that of full-service restaurants, a report by Mira Securities said.

According to a report by Mirae Securities, “Millennials are becoming more discerning in their eating habits, in terms of the frequency with which they eat in or order out, as well as the variety they seek, and this is not a trend but a pattern”.

India has more KFCs and Pizza Huts than Canada or Mexico and they are customized too

Smaller, slicker, and successful

Quick-service restaurants of all kinds — whether they serve pizza, burgers or fried chicken — have grown. Along with trends and macroeconomic factors, the industry itself has recognized this opportunity and improved affordability with the availability of their products.

The top two Indian franchisees operating these stores in India, Devyani and Sapphire, have both built a scalable economic model. For one, they reduced the size of both KFC and Pizza Hut stores by 40-45%, which reduced their investment and operating costs.

Most of these stores are reportedly operating at 20% margins, implying payback in less than three years. Some of these stores are delivery-focused — a business that closed during the pandemic and continues to result — making stores smaller and paybacks better.

Contribution of delivery business increased during the pandemic

QSR FY19 FY22
KFC 20% 44%
Pizza Hut 35% 57%

Source: Mira Securities

Biryani Chicken Bucket and Combo Pizza

Franchise operators have also modified their menus to suit Indian demand and price points. The most interesting change was the transformation of its rice bowl offering into a biryani bucket, as the earlier product never took off. It is a favorite product in the South, and has become a hit in the North and West as well.

While KFC moves into buckets and zingers, which account for half of its business, biryani and rice bowls make up 7-8% of the business. A similar but a deeper strategy was adopted by Pizza Hut whose products and prices were much higher than peers, especially Domino’s.

Over the past 2-3 years, they have continuously added combos and meals to make the brand more affordable and attractive. Now, meal combos make up about 47% of their sales. Its Average Per Customer (APC) has also come down to ₹500 from ₹750-800 three years ago.

It also caters to Indian tastes – and has introduced Momo Mia pizza and San Francisco style. The former is already successful and contributing high single digits to sales, the report said.

This variation allows it to keep its premium status while playing the price card. Their entry level pizzas and sides are also expensive because the variety is less.

“On the other hand, in the premium category, the price of Combo is 37-40% less than Domino’s for regular size pizza and 31% less than Domino’s for non-veg medium size pizza.” Reports indicate that they are. It is priced at a different vantage point.

It seems that, when it comes to food, most young Indians prefer it fast, quick, tasty and affordable – which is why they are flocking to QSRs – a sweet spot that these American brands have managed to hit.


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