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Upsurge in usage of multi-cuisine ingredients in QSRs
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Tuesday, 01 July, 2014, 08 : 00 AM [IST]
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Chandni Sahgal, Rishab Sonkar, Atul Nagpure
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fiogf49gjkf0d Quick Service Restaurant (QSR) works essentially under the Licensed Standalone Restaurant format having roughly 11% Indian market share. The share is expected to increase to Rs 10,050 crore by 2018 with a CAGR of 15%. With a high projected market growth rate and substantial rise of QSR in the food service space in India with globalisation and increasing per capita spending in this category, QSR attracts a massive consumer base to have penchant for foreign ingredients localised to Indian taste buds. This has culminated into rapid shifts in consumption patterns of food and food services paving the path for multi-cuisine and inter-disciplinary fusion of Oriental and Western cuisines in the Indian context too.
Indian cuisine has its own multi-cuisine variety. From the subtle yet ghee-dripping north Indian delights like the parantha, rajma-chhole, and makki di roti to the healthy coconut-spree in south Indian menus like uttapam, dosas, and idlis - all are entering the QSR space. From the spicy delicious kati rolls and tempting steamed momos of the east and north-east to the vada pavs, dal baatis, frankies, and missals, in the west coast all are engaged in the spurring market under QSR food services.
A myriad of multi-cuisine ingredients pushing into the Indian quick-service kitchen menu invite a lot of challenges as well as tongue-twisting recipe addition in the intense fight for market share in the red ocean realm of food service QSRs - all adhering to either Western recipes with Indian ingredients, or Indian recipes with exotic ingredients or exclusive Western or exclusive Indian varieties in food space.
India has been seeing a proliferation in the demand for imported vegetables, fruits, cereals, dairies, nuts, raw and processed meat, and beverage products in India. More and more Indians prefer foreign brands under QSR players who offer such ingredients in their offerings. The key Indian QSRs are dominated by cafes followed by pizza QSR chains and international non-pizza QSR chains in HDTA (Home Delivery-Take Away), dine-in, kiosks, and food theatre formats. With changing lifestyles of the urban Indian population and increasing spend, the QSRs are drawn towards locations in malls and multiplexes, shopping areas, corporate hubs, petrol pumps, tourist hubs and so on.
Local, international, exotic
Indian famous ingredients can be categorically, local, international and exotic. Indian QSR kitchen is fusing foreign ingredients into its recipes and Indian ingredients like tandoori - paneer or chicken or mushroom have culminated into international recipes like wraps, pizzas, sandwiches, and burritos. Even pastas contain ethnic domestic ingredients and spices and condiments to scintillate Indian taste-buds. Mexican ingredients like baked black beans and others like parsley, broccoli, and leeks, enter Indian bread stuffing and rice meals served with Indian sauces/chutneys. Or say, potatoes being the favourite base for all QSR food with Indian recipe and ingredients. Vada pav, chat kiosks, pav bhaji, paani puri, dahi chaat and so on top this list. They are also eating into the Western bandwagon savouring favourable responses from the Indian consumer ‘churn.’ Potatoes, tomatoes, capsicum, mushrooms, coriander, spinach, garlic, onions and so on comprise Indian veggies whereas sweet corn, baby corn, artichokes, brussel, lettuce, red-yellow bell pepper, paprika, jalapenos and the like illustrate the international.
Food & beverage imports include dairy like cottage or feta cheese and other authentic varieties of gouda, cheddar, blue cheese, mozzarella and so on, margarine from Italy, Spain and so on. Complementary ingredients for milk-based items like coffee beans from Brazil, Sri Lanka, Costa Rica, Kilimanjaro, Argentina and some European countries, tea from Darjeeling, Sikkim, China and so on. Nuts are favourites for Indian QSR and range from peanuts, walnuts, almonds, cashews, dates, pistachios, figs, and groundnuts. Nut butter has started gaining popularity in sandwich or burger QSRs both in Indian and international chains in India.
Healthier options
Cereals as ingredient in QSR food items are equally racing up with more Indians moving to healthier diet options like whole wheat flour (aata) replacing ‘maida’ flour as the base for Indian and foreign breads. Barley, oats, semolina, pulses, gramflour, riceflour, soyaflour - are all getting into the QSR space with healthier lifestyles.
India is land of spices. A majority of spices and condiments are sourced from key regions domestically as well other countries. Meat is either an indigenous product or is processed and imported. Indian poultry, goat meat or lamb, eggs, pork, bacon, salt water and fresh water fishes, prawns, crabs, molluscs like squids, clams and so on are sourced from the shores of east and the west coastlines of India that harbour such marines and non-sea meat is either sourced in processed or semi-processed or raw forms within India or from other countries.
Indian QSR does not embrace beef to refrain from hurting religious sentiments of the people. Poultry and mutton (goat or lamb meat) are the favourite meats in the north and north-east whereas a chunk of the coastal population has a penchant for sea foods and fresh water fishes.
Basic and popular street foods are finding their way into the organised market, with the vadapav and ice gola being served on the table. Regional cuisines, which have gained recognition locally, too, are on the menu, with the likes of Malwaneez and Kebab Lucknow Wale. Indian flavours have swayed over the international taste bud leading to diversification of menu; for example, at Subway, one may savour Chicken Tandoori Sub. There has been integration of different food concepts, with sandwiches on the menu of CCD and McDonald’s serving coffee.
It has been nearly 20 years since the first foreign quick service and casual dining restaurant chains and franchises opened in India. The initial opening was met with a mixture of anti-globalisation opposition and consumer curiosity regarding how the restaurants would adapt their menus and operations to the Indian market where many consumers are vegetarians or do not eat beef. At the same time, imports of food products were effectively banned and restaurants had to develop supply chains, processing facilities and supplies of suitable ingredients.
New vista
Also, due to high tariffs and import duties, QSRs are required to develop supplies locally rather than import food products. Efficient supply chain of such ingredients has opened up a new vista for Supply Chain Management (SCM) in QSR industry.
Standardising product quality across QSR chains impacts the overall business and food scenario in the industry. The relationship between channel partners has been proven to have worked well in categories such as cereals, dairy, poultry, spices and condiments, and frozen foods in India and there is room for such partnerships to flourish in other key categories. QSR players have multiple supplier options which help to diversify the risk and price negotiations.
There is significant demand for mozzarella cheese from pizza QSR chains and for cheese slices in burger chains in India. Demand is growing by 25% for these variants. The need for high quality milk has necessitated dairy players to set up their own milk sourcing infrastructure (e.g. Schreiber Dynamix and Parag Milk are servicing McDonald’s and Domino’s). Schreiber Dynamix and Parag have to set up cheese processing plants to cater to this demand. Both are servicing the QSR chains from their plants in Maharashtra state.
Back-end integration
Poultry has always been processed for wet markets. Therefore, the requirement for good quality, chicken and specific chicken parts for QSRs will impact processing operations. Some key poultry players have invested in poultry processing facilities to supply high quality chicken to QSRs. There has been focus on integration at the back-end in recent years, to provide quality products to QSRs (e.g. Godrej Tyson and Suguna for KFC and McDonald’s).
McCain Foods began working on French Fries in India in the late 1990s, initially importing the products to start operations. Significant research was done in multiple states in India to develop potato seeds for oblong potatoes. McCain Foods is now the largest frozen potato player in India, supplying to major QSRs. McDonald’s and RK Foodland worked together to put a cold chain in place to support the QSR operations. RK Foodland handles the delivery from distribution centres to all 271 McDonald’s outlets in India.
Other cold chain players, such as Snowman are also supporting QSR players with frozen food ingredients in India. An estimated 60 per cent of Indians are under the age of 30 and India is slowly becoming a more urban society. However, Indian consumers believe their home-cooked meals to be tastier and more hygienic than restaurant food.
Thus, the biggest challenge faced by any quick-service restaurant in the Indian market, be it a domestic player or international franchise is that of maintaining consistency in the product and in the quality of service. A number of foreign restaurants have made significant changes in their menus to cater to the quality standards and Indian tastes, developing a range of vegetarian products and Indian flavours at very competitive prices. Younger consumers and a growing emphasis on convenience are fundamentals that suggest future growth in this sector.
(Chandni Sahgal is managing consultant, whereas Rishab Sonkar and Atul Nagpure are project trainee at D'Essence Hospitality)
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