A brief Preview of Quick Service Restaurants.

1. Brief on Quick Service Industry (QSR)
By
Jagjit Kandhari Singh
9811885103
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2. Quick Service Restaurants is identified by the acronym QSR in the industry and is
typically characterized by “food served fast” not necessarily fast food and minimal
table service. QSR chains have thrived in the Indian states and around the world
because they cater to the busy lifestyles of modern consumers.
THINK GLOBAL
EAT LOCAL
Once an introverted, home-driven consumer, the indulgent Indian is today waking up to a nascent yet
formidable “Eating Out” culture, making food services one of the most promising business sectors in India.
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3. Classification of Eating out places and where
does QSR stand with Growth drivers.
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4. Expanding
middle class
Urbanisation
Youth
Spending
Nuclear
family
Better
logistics
Mall,
multiplex,
Better transit
hubs boom
Growth Drivers
Restaurant
Industry
Unorganised Organised
Full Service QSR Bar Kiosks/Carts
Fine Dining
Casual
Dining
Take-away
Home
Delivery
Eat-in
• Highest growth segment-21%
• Maximum footfall due to
increasing traffic at
airports/railways
stations/malls/multiplex and
hyper-markets.
• Organised supply chain
• Quality control
• Sourcing norms
• Multiple outlets
• Accounting transparency
• Dominated by Global players
• Road side location
• No technical
standards
• No accounting
standards
A QSR model works best when there are economics of scale.
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5. • Many locations
• Dynamic Limited menus
• High and variable sales
• Fast service with much self service
• Many entry level employees with
varied schedules
• Unskilled labor
• Skilled management.
• Unit managers in key roles
• Highly competitive prices
• Global Chains dominate field
• Simple units
• Complex systems
Key features of QSR
Low cost in terms of initial
investment and operating costs
Low Risk
Best retail locations
High impulse products
Competitive prices
Target Audience Behaviour
• Brand conscious
• Consistency in all aspects
• Food safety conscious
• Hygiene, Taste and quality conscious.
• Westernized culture
• Seeking international standards
• Value seekers
• Experimental
Building sustainable QSR chain needs minimum 5 years, look at Jubilant Foods, They took 15 years.
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6. The Food Sector
Unorganised (4.2
lakh Cr)
Organised 14%;
INR 10500Cr
Organised in
2021 INR
147000 Cr
Brands By Segment
QSR
Global
QSR
Indian
Casual
Dine
Cafe
Fine
Dine
Pubs &
Bars
ORGANISED SEGMENT
RISING DISPOSABLE INCOME
NUCLEAR FAMILY STRUCTURE
INCREASING WORKING POPULATION
RAPID URBANISATION & CONSUMERISM
INCREASED PRIVATE EQUITY INTEREST
QSR industry is categorised as a long haul business which requires patient capital.
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7. SWOT ANALYSIS, QSR, INDIAN CUISINE
• Familiar cuisine.
• Fresh Concept.
• Back-end
operations in order
• Doing the Right
thing—People-
Money- Concept
•Burgeoning middle class
•Increase in malls,
multiplexes and transit
locations
•Increasing youth spending
•Urbanization
•Food Inflation
•Product imitation
•Price Competition
•Local Competition
• Building a cost
effective supply
chain.
• Multiple licensing
• Sourcing
Talent/retention.
• Low awareness.
• Learning curve
issues
• Brand positioning
Positive
Negative
External
Internal
Opportunities
Strength
Weakness Threat
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8. Equipment
Training
Recipes
Procurement
of products
There are 4 important factors that enable
standardization for a QSR with multiple outlets:
• Every new employee has to go through a specific pre-
designed training program for that level of employment.
• The same equipment/machines are used by all outlets.
• Standard SOP’s have to be followed by the crew who receive
thorough training for the same.
• QSRs have centralized approved vendors from where they
procure and process raw materials and distribute it retail
outlets.
The 4 pronged approach to ensure standardization across multiple outlets
Standardized aspects to follow strictly.
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9. Operations
• Counter and lobby management----
• Food and disposables costs---
• Manpower rationalisation
• Energy saving initiatives.
• Speed of service
Training
• Soft Skills and product training---
• Complaint aversion and recovery training.
• Delight moments for customers training
• Escalation matrix training
Sales and
Marketing
• Marketing calendar and media plan.
• Plan to build weak days and lean periods.
• Discipline in flyer-ing
• Digital platform activation with smart strategy.
• Innovative plays for better results
Supply
Chain
• Engineers supply chain to drive out costs and increase efficiency
• Identify competitive sweet spots
• Sourcing---best practices---volume discounts
• Receiving, tendering, storing and issuing material.
• Transport logistics
Production
•Recipe formulation and menu listing
•Product development and trials with costs analysis.
•Standardization of the recipes and training imparted to
staff.
•Production system and formats for related composites.
Administration
and HR
• Organisation structure
• All HR policies—Recruitment to Exit.
• HR and all Statutory compliances
• All Licensing issues and routine reporting.
BD/Projects/
Maintenance
• Identify new sites., Design, award and monitor progress.
• Stream line projects work and costs
• Flow of events from site selection to handover to
operations
• Emergency breakdown plan for running outlets
• Best practices for maintenance/load correction etc
• Escalation matrix for breakdowns
• Calendar for preventive maintenance
Vital Functions
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10. Acquisition
• When QSRs come to India, they find it difficult to get
experienced talent for strategic positions. There are very
few people with relevant experience, especially in a global
firm. Poaching employees from competitors would mean
huge incentives and salary raises. Thus a lot of companies
hire people in the same function but from a different
industry.
Support & training
Training is conducted at 3 stages:
• Induction and behavioral
• Process Oriented
• Process oriented On-going
• Product and Refresher capsule.
Retention
Out of 10000 employees, KFC has to replace 7000 employees each
year. This means cost for fresh recruitments, training and relieving
employees is very high. Dominos has increased salaries of store front
employees by 20% and implemented an incentive plan in order to
reduce attrition rate.
Restaurant
Manager
Shift
Manager 1
Trainee
Manager
Training
Squad
Crew
Members
Shift
Manager 2
Human Resources
“Human Resources Isn’t A Thing We Do. It’s The Thing That Runs Our Business.”
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11. Centralized
Facilities for
processing
raw
material.
Distribution By
Refrigerated
Trucks Of
Vacuum
Packed /Semi
finished
products to the
outlet
Products
Received &
Stored at Outlets
Under Controlled
Temperature.
In Retail Outlets
Items are
prepared based
on orders and
served to end
consumers.
Standard operating
procedures(SOP’s) are
followed by all
verticals to ensure
consistency.
Base Kitchen centralised so
as to save on exorbitant
rentals at retail locations and
to control product quality
and taste. This shall also
help in moving up the
learning curve while
allowing the format to scale
up without expensive
mistakes.
Typical QSR Base Kitchen working
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12. • Its important for QSRs to price their products carefully because of the stiff competition that they face.
• The strategy is to price their products in such a way that the maximum number of customers can be
retained and at the same time higher margins are abstracted from the customers who do not mind
paying more for extra value. This is achieved by----
Pricing Strategies
Pricing the base product aggressively and keeping
higher margins on the side orders
Differential
Pricing
This strategy is for the price conscious consumer
who sees great value in the base product and can
choose to not take the side orders
At the same time it allows the QSR to charge the
customer for whom price does not matter, much
more through the high margin side orders
Most QSRs keep fighter brands in their menu to
remain competitive.
Value Pricing
Eg: QSRs try to sell more French fries and cold drinks
through their value meals. Pizza chains sell more
garlic bread and cold drinks through their value meal
Value combos allow the QSR to sell more number of
high margin products with the low margin base
products.
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13. Growth Strategies of QSRs
A large burger chain in India has the highest foot fall amongst all countries, but the lowest average bill.
Growth in India is achieved based on volumes, hence every QSR is looking to expand its presence.
A coffee trading company who supplies coffee beans, started a
retail business of coffee shops all over India.
Forward
Integration
Horizontal
Diversification
Concentric
Diversification
Lateral
Diversification
A casual restaurant chain diversified into food court stalls.,
thus entering the QSR market.
A coffee shop chain diversified its coffee shops business by
establishing express outlets and coffee machines.
A soft drink giant branched out to form a new company with
Pizza and Fried Chicken chains in its umbrella. It sold off its
stake, but is in a lifetime contract with the firm
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14. Challenges
Demand Side
• Health and
hygiene
concerns
among buyers.
• QSR customers
are very easy
to sell to, but
also very easy
to lose.
• Beating local
competition
• Low entry
barriers
Supply Side
• Maintaining
Quality of
Service.
• Localization of
Menu
• Standardization
of product
across outlets
• Monitoring
multiple
outlets
• Reducing
service time –
efficient
assembly line
Talent
• Acquiring
Key Talent
• Managing
high
attrition
rate
amongst
junior level
employees
Supply Chain
• Building a cost
effective
supply chain
• Establishing a
supply chain in
a new region
• Monitoring
quality of
products
procured from
third parties
Maintaining Consistency in product and quality of service are the biggest challenges faced by QSRs
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15. Future Prospects and Trends
Locations
•Large chains expanding to smaller cities.
•Domestic chains setting up in metro’s and big cities.
•Transit locations are a BIG draw.
•Dark/Stealth Kitchens are changing the landscape of most formats.
Formats
•Express Outlets
•Smart carts/kiosks.
•Smarter, smaller formats work better for QSR
•Global giants making numerous mistakes and burning to stay afloat in the market.
Cuisines
•Basic street foods entering organised markets
•Regional cuisines –lucknowi, Malabari, Chettinad, Kebab’s etc
•Integration of concepts –McD serves coffee and CCD serves burgers.
•Menu diversification by introduction of Indian flavours.
Technology
• Today technology has redefined the way food service sector co-ordinates, evaluate and control their day to day
operations.
• It has helped improved the SOP’s to standardise all aspects of business.
• Online ordering systems.
• IVR system for placing orders and making payment via credit/debit cards.
• Food Aggregators are major game changer.
Investors are waiting on the fence to get a big slice of the QSR pie.
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16. Thank You
You may reach me at 9811885103
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