QSR Biggies working towards better technology

The restaurant space across the world is going through a transformation. The changing palette of customers, the awareness around healthy food habits, the coming in of technology and a lot many factors are fast changing the restaurant scene in India and also abroad. COVID- 19 too had a transforming effect on the restaurant ecosystem and has taught the industry a lot many new things while helping it unlearn some. In this ever-changing restaurant industry, here are 5 culinary practices that are fast changing the restaurant scene.
 
Integration of Technology

The restaurant industry has seen unprecedented technological enhancements that have completely changed the way people are dining out. From digital menus, mobile apps to order food and reserve a table, QR code to scan and pay to a backend Artificial Intelligence driven analytics, the restaurant experience is completely digitalized today. While for the consumer, the restaurant experience can be completely contactless, the back-end technology also supports automated inventory management and analysing consumer preferences to serve the customers better. With technology, the experience has become more personalised, curated and seamless. 

Focus on Health and Wellness

Consumers today are becoming more health conscious, leading to a change in eating habits. This has led the restaurants to respond by offering more nutritious menus. The restaurant menu has gone through a complete transformation in recent times with the inclusion of many healthier options beyond soups and salads, often with a calories’ breakup and other detailed specifications. Restaurants today follow the protocol of transparency providing all details about ingredients used along with their nutritional details. There have been new additions in the menu too such as vegan, gluten-free and a lot more options.   

Emphasis on Sustainability

Restaurant Sustainability is the new normal. A lot of emphasis is being given to sustainability, right from sourcing the right ingredients, to reducing food waste to even serving in eco-friendly tableware. The goal today is to reduce the impact on the planet and restaurants are making a positive shift toward sustainability. More and more restaurants are making an effort to narrow the supply chain by ordering locally grown produce. Recyclable paper napkins and linens are being used more often besides focusing on biodegradable packaging. Reducing food waste is another important factor that restaurants take into account very seriously and also go a step ahead in sensitising the customer and staff alike.  

Cloud kitchens are here to stay

The entry of cloud kitchens and their success is a big achievement for the restaurant industry. It has helped many small businesses to grow and expand. Cloud kitchens are a great way to cut overhead costs and hence build a flourishing business. With the trend of ordering food seeing an unprecedented rise during and after lockdown, cloud kitchens have come up as a parallel entity besides sit-down restaurants. And with the demand for outside food increasing among the consumers, there will always be a demand for food from cloud/ghost kitchens. Cloud kitchens also serve a widespread menu including healthy dishes and international cuisines besides the regular Indian fare.  

Celebration of Cultural Diversity

Restaurants today have the most widespread menu. With consumers today becoming more and more experimental in their food choices, restaurants today cover a wide range of global cuisine. While there has been a rise in multi-cuisine restaurants, there has also been a huge growth of restaurants serving international cuisines. There are many restaurants today that serve authentic Pan-Asian, Japanese, Korean and other cuisines. Restaurants today celebrate the diversity in world cuisine besides holding on to the all-time traditional Indian fare.

It is observed that QSR has become a well-established section of the Indian foodservice industry and has further potential for growth throughout the country. Nukkadwala, the QSR chain which is owned by Vatika Group, serves authentic regional Indian food which is process-driven and quickly dispensed.   

The Nukkadwala journey started in 2014 by the Vatithroughoutne of the leading developers in the real estate industry in India. The Group covers various expansive integrated townships to trendy speciality restaurants to world-class learning environments that uphold unparalleled quality and reflect timelessness.

In an exclusive interview with Restaurant India, Nitika Kapur, Chief Executive Officer of Vatika QSR Pvt. Ltd., says a brand can control the quality of its products through the FOCO model.

What are some of the interesting facts about QSRs you came across in your journey so far?

Ten years back, it was the time when Mc Donald’s or Pizza Hut entered; they were not just the QSRs but they started the eating out culture in India. Back then, we had no knowledge about the difference between regular and quick-service restaurants. The QSR industry has evolved much in the past five years. With the growth of the corporate parks, millennium cities like Gurugram, Bangalore and the b-towns becoming fast-moving, the work-culture is increasing; the time factor has become important.

Must Read: Four Trends QSRs Shouldn't Ignore In 2019

Now the competition is between dispensing faster and the same food every time. That’s where the difference is when the global food brands like Pizza Hut and Mc Donald’s came and now what probably the brands like Chaayos and Nukkadwala are doing. It’s a different game altogether.

The key accomplishments of Nukkadwala in 2018

2018 was a break year where we gathered all our gaps, fixed them up. We opened many Nukkadwala restaurant outlets back-to-back in 2016 and 2017. We took almost a year hault, in 2018, to gather all the gaps we were facing in operations, expansions, locations, etc. But we opened two outlets in 2018. We signed a few of them are more futuristic. Now we are back again; we will be opening two outlets till March, this year.

In a start-up, there is no one year where you can actually think of an accomplishment; every year we face a new challenge and we try to fix them up.

The first year was about how we can maintain the consistency keeping the expansion plan. In the second year, we started multiplying outlets and focusing on how to maintain the operational gaps minimum. At Nukkadwala, we believe in selling efficiency.

Meanwhile, studying the repeat customers of the brand, there are many marketing strategies we had introduced. The loyalty we had earned in the last two years is phenomenal. We are very positive about it.

Your growth and expansion plans for the next two years

Nukkadwala’s growth has been nearly 28% which is very good and consistent; the customer repeat of 39% at the brand level.

The QSR chain, Nukkadwala is planning to expand and add 25 more outlets in different cities to keep the growth running.

Our current focus remains Delhi NCR. In the first phase, we looked up at the expansion only in Gurugram. We have a couple of outlets in Gurugram at Sohna Road, New Gurgaon area, Sector 21, Cyber City and MG Road. We also moved to hospitals and food courts as well. We started with Fortis Faridabad, and are in talks with other Fortis outlets. Our current focus is on retail and corporate business parks. We will be opening two outlets in corporate business parks in Noida, one in Gurugram and another in Dwarka.

Right now there is a huge gap. All the new QSRs are selling beverages. We are the only one, probably, who are selling authentic Indian food, vegetarian and non-vegetarian both, which in itself is very challenging. But there is a lot of demand. We are creating eating out culture. We are selling people what they actually look forward when eating out. As Indians, we cannot have pizzas or burgers daily. People who tend to eat from outside most of the time, miss the Indian cuisines. It’s a huge gap. And that’s why we are opening our outlets in malls, hospitals, university areas, markets and corporate parks.

Also Read: Five Reasons Why QSR Is An Evergreen Business

Depending upon the requirement of the locations, we are open.

Do you think ready-to-cook food kits could pose a possible threat to the QSRs?

When we talk about the Indian market, the problem with ready-to-use kits is it isn’t fresh. Secondly, if it is frozen food, maintaining a frozen chain by local retailers is a big challenge. It can actually lead to a very serious health issue if the chain isn’t maintained. On the other hand, when a customer walks in, we deliver to them instantly and if there is an issue, we are 24X7 available to solve and resolve it. Whereas, people who procure these kits, they keep calling the customer care; they won’t be heard.

People who don’t want to cook at home, even if they get the ready-to-do kit, if they want to go out and eat, they will do so. It’s a huge market and there is a share for everyone. Even if tomorrow we have twice as many QSRs as we have today, we will still have buyers. It’s not going to get cannibalized. India is a huge growing market; the spending power has improved, eating out culture is growing.

How would you compare the consumption patterns of people when you took over as CEO at the company with the current scenario?

We realized that slowly and gradually, with the increase in traffic and lack of mobility, everything even residential areas will become captive, apart from the corporate business parks. There was a time when people from West Delhi would come to South Delhi and Connaught Place for night-outs. But now with the demand, the city is building up. We are now seeing the growth and planning at every part of the city.

Aspects to keep in mind while designing the menu of a QSR

There is no magic mantra behind running the business. Your base needs to be strong.

Food consistency has to be a priority. Your food or beverage, whatever and wherever you are selling has to be consistent. If somebody has visited your outlet in CP or in Gurugram, they should have the same impression. Whatever you serve be it Vada Pav or Adrak Chai, the taste and flavours have to be the same. So the quality and consistency of the product are supreme and non-negotiable.

Considering the price sensitivity of our country, we should always consider the pricing and positioning of our product. I see a lot of new outlets and brand selling a product for Rs. 250-300. With the country like us, we need to be very watchful of what and how we are selling and the price. It’s basic economics.

Tips for restaurateurs who want to grow through a franchise model?

Nukkadwala is company-owned right now. But, tomorrow if we go into a franchise, it will be a FOCO model i.e., Franchisee-Owned and Company-Operated model. If you really want to have consistent growth and not see much of decline in the path of growth, it has to be a win-win model. Be it the hard work or the money involved, it has to be equal.

For a brand like Nukkadwala, I’ll always suggest going with the FOCO model. Keep quality and operational checkpoints with you and let the franchisee partner just help you in the expansion and management of the money.

QSR segment is growing at rapid growth. An obvious statement to hear, right? But did you know the quick-service industry is expected to touch the Rs 25,000-crore mark by 2020; currently it is at Rs 8,500. The annual growth rate of the QSR segment is 25% (CAGR).

The QSR chains which are much popular among the people living in urban areas will certainly see a rise and success too. The success of QSR brands namely Burger Singh, Rolls Mania and Chaayos makes it evident. According to an analysis by ASSOCHAM (Associated Chambers of Commerce and Industry of India), 35% of Indian population will migrate to urban areas making it to 52 crores from the current population of 34 crores. There is much more scope in the QSR space.

Though the format doesn’t allow any unnecessary investments on décor and ambience, the focus gets straight to the supply chain, food and customer service. Given low investments and high profits scalability, QSR is an evergreen business.

The food industry changes entirely every ten years. And with the new trends picking up every year, QSR is a segment which businesses should watch for. Here are four QSR trends for 2019 the brands in India should know and prepare for.

Technology Update

Digital Videos in the QSR industry is an important avenue for investment, then follows email marketing and social media.

If you want to keep up with the trends, which you should, stay up to date on technology. Working in an old-fashioned manner could take a toll on your business; QSRs doesn’t allow old-fashioned models. Technology makes the service easier, faster and is customer-friendly. It is estimated that digital videos will attract consumers, giving 50% boost to the business; email marketing and social media then take the lead in bringing the business of up to 20-30%. Choose wisely!

Must Read: This Kathi Roll Brand Grows by 103% Per Year

More Innovations

It is important to store the customers’ data to analyse their food preferences, location and time. A lot of innovation could be done on the basis of the customers’ data. As said earlier, focus on food is a must. You don't need to be in too much innovation with food but you need to keep yourself up to date in terms of the whole service. Make one thing so perfect that you don't need to change it. Like Mc Donald's has a fillet fish which it serves everywhere. While designing the menu, just make that one thing right. Don't try to be the best for everything but keep upgrading. Be open for the change. You can always do more on product packaging. These days, as health and nutrition game is scaling up, the brands are becoming more conscious with packaging and food innovations.

The Launch of New Products

Signature offerings are always a hit among the consumers if marketed right. Taking the calculated risk with new products will pay your QSR well. Introducing a new product every year will give your brand an opportunity to differentiate from that of your competitor. Products and offerings, both are the core of the QSR business. As part of creating a trusted customer base, the new product launches work!

Product Sustainability

The pressure will increase on the QSR brands to run socially-sound operations. Therefore, the quick-service restaurants, big and small, should move towards a holistic approach towards sustainability. The sustainability in QSRs covers everything from the kitchen ovens to the staff at the restaurants. Be it the concerns for product costs, service, health and nutrition and even plastic pollution. With more eco-ware launches, QSRs will take the route to eco-friendly packaging. 

As told to Sara Khan, Features Editor, Restaurant India.

Biplob Banerjee works with Jubilant Foodworks, which is the master franchise of Domino's pizza & Dunkin' Donut for India, Nepal, Bangladesh and Sri Lanka. An engineer and an MBA from XLRI Jamshedpur, he has a total of 22 years' experience with companies like PepsiCo, GECIS, GSK earlier. A certified coach and fitness enthusiast, he loves music and adventure sports. At JFL, he looks after HR, CSR and Admin for a workforce of 28,000 employees.

How do you create experience at your restaurant?

We have 1100 restaurants in 260 countries and our product is quite popular from early age to adult age. So every customer comes with a new expectation and our challenge is to fulfil that. For us, food experience revolves around one key theme which is taking care of customer in the best way possible. Restaurateurs need to think if the customers are receiving the value from the product, be it ambience, food, menu, service and price. Our consistent theme is based on customer’s need. They are spoiled for choices so restaurateurs have to make sure to produce what they stand for and what their brand promises.

How do you maintain the same consistency in all the 1100 outlets?

It is a huge investment in terms of people, energy and of course capital and we do not short cut on anything. We have our special team which is divided into two parts, one focuses on product and other on customer service. We invest in people; we have a training ace at each restaurant which focuses 80 per cent on training and 20 per cent on delivery. Employers think that their work ends with hiring people only but the way you train them plays important role. Our parent company has global audit function and they keep sending people suddenly to keep an eye on the quality and consistency.

How have you seen QSR segment growing over the past few years?

Apart from the statistics, this industry is growing at a phenomenal rate but the caution is that it is the game of scaling up. There is a huge challenge when it comes to present the brand at national or international level. There are many successful players in different regions but the question is if they can scale up their business on another level altogether. If they can then this industry has wide scope to develop.

What are the evolving trends in this particular segment?

Consumer adoption is changing at a very high rate and we are a country which is popularly divided into India and Bharat. Thus, there are different set of consumers expecting different every time and we as a brand have to maintain that balance. Not going over bored and keep an eye on what will work is the new trend.

What to keep in mind to make the brand global?

Many entrepreneurs who have entered Indian market already have that experience. The secret behind that is ‘leadership’. Leadership in terms of character and competence where character stands for vision and competence for decision. If one has the patience and integrity for the brand then scaling it globally is not a juggernaut.

NEW DELHI: The world’s largest QSR chain McDonald’s informed India’s National Company Law Appellate Tribunal (NCLT) on Wednesday that settlement of a long-standing dispute with Vikram Bakshi, its joint venture partner for the north and east, is “not possible.”

MIPL’s stand was taken on record by NCLAT, which had on 25 August asked both parties to try and settle the disputes that had led to the estrangement and keep the 169 McDonald’s outlets they operate in north and east India open and running while the talks are on.

The NCLAT also issued a notice to the parties to file their replies.

McDonald’s India had filed a petition with NCLAT on August 23, challenging a National Company Law Tribunal (NCLT) order that had reinstated Bakshi as the MD of Connaught Plaza Restaurants Pvt Ltd (CPRL). CPRL is a 50:50 joint venture between McDonald’s India and Bakshi. In 2013, Bakshi was removed from the post, following which he had approached NCLT.

On August 21, the American chain has terminated its franchise agreement with CPRL, which operated 169 restaurant outlets in India. Within 15 days of the termination notice, CPRL will cease rights to use McDonalds’s name, system, trademark, designs and its associated intellectual property, among other things. The outlets have time to run till September 6.

The Goods and Services Tax (GST) which is being implemented from today has brought uniformity in the restaurant industry. In the recent past, there have been fast paced developments regarding the rates and rules. Restaurant industry which has suffered many hurdles in the past few months is cheering high as eating out is getting almost 2% cheaper this year. Though, the ambiguity still exists on some issues, which are likely to settle down once the GST implementation is underway.

“While ambiguity persists on issues like input credit, direct benefits on food and liquor would be passed on to consumers. “Market forces such as competitive pricing will apply too; we will see how the full impact plays out,” shares Riyaaz Amlani, CEO and MD, Impresario Entertainment & Hospitality.

Restaurant chains like chains such as Pizza Hut, KFC, Cafe Coffee Day, McDonald’s, Impresario which runs restaurant chains like Social, Smoke House deli amongst others, Genuine Broaster Chicken have passed an statement saying that they will pass on lower tax benefits under GST from July 1 to their diners.

Commenting on the same, Rahul Shinde, managing director, KFC India shares,"KFC welcomes this long awaited step by the government towards implementing GST. The proposed tax restructuring will bring uniformity in pricing across all our restaurants in the country as well as taxes within the category. Given that our current menu prices are exclusive of any taxes (and same is charged separately on the bill), any benefit on account on reduction in tax rates due to GST shall be passed on to our customers."

“GST for country is a good reform. It is not only a tax reform but a business reform in which non compliant companies will lose the game. However, government should be considerate about small restaurant business and give them flexibility by introducing strict norms in a phase wise manner. Also, clauses like no rebate of tax on civil contracting etc. is unfair as it increases capex by 18% straight,” adds Karan Tanna, CEO, Yellow Tie Hospitality.

While the effective list of tax is so long in restaurants including service tax and VAT which together combines almost 21% varying from state to state and restaurant to restaurant will come down to one uniform rate of 18% across India under GST. According to NRAI food service report, the Indian food service industry is burdened with multiple taxes like VAT and service tax, besides different state taxes, which adds up to 18-25% of the bill value. “The irony of our industry is that it is very labour intensive and employment generating, our government thinks this as a cash cow and wants to extract as much as they can. Instead of supporting us by putting the F&B industry in the GST BRACKET OF 5% as is the norm all around the world, they have put us in the slab of 18% GST,” says Gaurav Sethi, Director at Baris.

Employers and Employees both are essential assets of the organization. Right co-ordination could take them to the heights. “Great things in business are never done by one person. They are done by a team of people.”

-Steve Jobs

One of the gigantic hurdles; organizations have to face is the management of Human Resource. It should always be in the right direction. One of the best things in food industry is restaurateurs could see what is coming? They just need to use that instinct in an accurate way; starting from palate, dining to one of the most important i.e., the employees. Everything needs to be next to best to expect better results. Human Resource team should be the yardsticks of the quality. “There are two categories of staff available to work for you. One highly polished & educated and on the other hand highly skilled. While us all want polished people on floor but affording such talent is a challenge”, says Celebrity Chef Akshay Nayyar, M.D, Gourmet Restaurant Concept Private Ltd. Quite true to the fact that people build business. One solution to this could be training the highly skilled ones to lead in future for you. In this way we not only motivate staff but also add great value towards customer experience at affordable pay roll. This will also lead to better hygiene practices and improve overall product.

This is one of the issues which arise purely due to lack of knowledge of new restaurateurs. It can be avoided by strategically arranging quality service programs like, food safety and cleanliness, idea about food market, what consumers demand, how to maintain high service standards et al for the highly skilled employees. It is a must for food industry to strategically plan HR management. Also, they have to keep in mind that these plans work for two to three years only; they need to keep changing the plans frequently. A good restaurant should hire efficient workers which they can train in the job itself. It is more than telling the employees what to do instead hire smart people so that they could suggest what to do. Ministry of Food Processing Industry has also initiated a step towards Human resource Department (HRD). It is implementing a scheme for HRD in the food processing sector. The HRD scheme focuses on developing technologists, managers, entrepreneurs and manpower for quality management in food processing. The scheme also provides assistance for creation of infrastructure facilities in academic institutions and for setting up of food processing and training centres (FPTC).

Now the question arises, how to maintain best relations between employers and employees. They need to motivate the employees. They need to appreciate them, arrange reward events for them and keep ensuring human resource compliance with employment rules and regulations and administering employee opinions. It is a two way street to maintain any relationship. Thus, employer also expects something from HR department, HR’s job is not related to hire employees and maintain their pay rolls. Today, HR’s role is far more than that. HR acts as a bridge between employees and employer. He’s the only attorney; he should be actively participating in the workforce strategies which benefit the organizations. The annual Human Resource requirement in food processing industry is estimated at about 5.3 lakh persons including one lakh in the organized sector as per a study conducted by the National Skill Development Corporation on Human resource and skill requirement in the food processing sector which speaks volume in itself that a great Human Resource could help growing the business.

Tell us about the journey of Panchavati Gaurav.

Panchavati Gaurav was started in 1982 by setting up the first restaurant in Nasik. We opened the second outlet in 1987 in Nasik itself and then expanded to Mumbai by setting up the third in the city in 1995 and expanding to Pune with the fourth outlet in 2000.

How many restaurants are there within your brand today and what is the expansion plan?

We are operating around 30 restaurants in India and are planning to add another four this quarter. We have around 16 company owned stores and 14 franchised stores. We are now expanding via franchisees only.

What is the franchisee fee you charge from your franchise partners and what is the support you provide them?

We charge Rs 15 lakh from our franchise partner as a fee which is non-refundable. We provide complete support to the franchisee- staff, brand name, marketing, setup details, store location and also help in designing as we have architects and designer in-house.

What is the selection criterion for the right partner?

We are looking for partners who dedicate their time to the business and are passionate about it. Most of the franchisees today don’t work for their outlet. I always suggest one should not take a franchisee by loan. You need to give some time to get your restaurants hit the space and hence put in your own menu into taking a franchisee.

Tell us something about your food.

We are pure vegetarian quick service restaurant. We have 32 dishes in our menu and you can have as much as you can eat. It’s a QSR concept.

How is the pricing done?

The totally depend on city- in smaller city we charge Rs 260 for a thali and bigger city it is priced at Rs 400. Gurgaon is costliest and is priced Rs 500 for complete meal. We have a parcel box also for corporate which we deliver at 180 rupees in Gurgaon and in smaller cities we are delivering the same box at 150 rupees.

What is your plan opening an outlet in Delhi?

We are looking for locations in CP though the rentals are too high as soon as we get one we will open the same. We are looking at Noida as well.

What is your USP?

Our food is our USP. And, we believe in word of mouth marketing. Also, right locations are very important because it brings you the clientele.

What is your plan for 2017?

We are in about 14 cities. I am planning to open around 20 in 2017 and are focusing on cities like Aurangabad, Lonavala including others.