How many times have you ordered a Pizza from Dominos or stopped by at Starbucks for your searing hot, no foam latte? Too many times to count. What’s great about these eateries is that you can quickly pick-up your order without the fuss of getting proper seating, using tablecloths and cutlery, or paying for an exorbitant bill. This is what the concept of a QSR is all about. 

What is the QSR Sector in the Food Industry?

The QSR Sector is a part of the Restaurant and Food Services Industry. QSR or Quick Service Restaurants churn out food quickly and efficiently. It is synonymous with fast-food restaurants. These restaurants generally do not provide table service, although they cook food exceptionally fast compared to a fine dine or a gourmet restaurant. 

3 Key Reasons why it’s a Massive Market

Targets age demographic that will elevate sales 

The QSR Market in India is a potentially massive market because the target demographic of the sector mainly comprises Millennials with an optimal age-group demographic between 15-35 years. This age demographic will elevate sales since India’s median age is much lower at 26.7 years in comparison with countries like the United States or China. 

Restaurant food consumption boom 

The per capita income is rapidly increasing in India with Millennials fuelling the country’s consumption boom. Also, Millennials have higher disposable incomes which they are spending heavily on outside food every month. 

Pan-India Internet Penetration

The Internet Penetration is deeply seeping into Tier II, III cities as well as villages. The market is slowly expanding to encompass a pan-India presence. As such, the market opportunity is massive in QSR. 

Why is it attracting Investors’ Interest?

Owing to the pandemic-friendly business model, QSR chains have tremendous opportunities to engage with big companies, especially in the fine dining sector. The Indian QSR sector is also being looked at as a hotbed of opportunities by Private Equity (PE) funds and Venture Capitalists (VCs). QSRs with well-established online and take away models have a chance of being chosen by big companies. 

The two key factors attracting interest from large PE funds and VC’s are:

Cheaper, versatile menus

Food churned out by QSRs is much more affordable when compared to fine dine restaurants. It is age, diet, and budget inclusive which will obviously attract a larger consumer base. 

Low investments

QSRs require low investments since the interior set-up costs are eliminated. Since they are mainly focused on delivering food at top speed, sophisticated high-paid staff and expensive infrastructure investments are not needed. Thus, the business model looks profitable for investors. 

Industry Forecasts and Expectations by 2025

The Indian QSR Market is estimated to be valued at INR 51000 Cr by the end of this year. It is projected to grow at a CAGR (compound annual growth rate) of over 18% between 2021-25. The Restaurant and Food Service Industry will record a rise in CAGR by about 10.4% in 5 years between 2018-2022. The QSR sector in particular will achieve significant growth while the industry as a whole is forecasted to be worth INR 5.5 Tn by 2022. 

The Growth of QSR Start-up Charcoal Eats

Charcoal Eats, a QSR start-up recently raised INR 1 Cr in Growth Capital from GetVantage, a Revenue Based Financing Lender. It’s a food tech brand that has completed over 2 Mn orders since its inception owing to its high-growth phase business model and high-speed execution in delivery of food. Charcoal Eats’ success is attributed to the fact that they are a digital-first food tech brand that’s steadily serving more plates across the country. 

You decided to make a chicken dinner on a Sunday afternoon. How do you acquire fresh meat without stepping out of the house and risking hygiene and safety at an overcrowded butcher’s shop? Besides, most local meat shops remain closed due to frequent lockdowns. Without much thought, you can easily order fresh meat on a home delivery app like Licious or BigBasket. This is India’s online meat market. 

How this unorganised sector is undergoing a transformation

The online meat delivery market has stayed nascent valued at just INR 700 Cr. In 2019, the broader meat market has also remained largely unorganised. But with the faster emergence of online players, it is slowly transforming. Start-ups like Licious, FreshToHome, ZappFresh, BigBasket have seen 3X growth ever since the pandemic broke out. 

Key Forecasts of the Industry

India’s overall meat market is set to grow to more than INR 460,000 Cr by 2024 in Gross Merchandise Value (GMV). It has a large growth runway ahead and is also welcoming of disruption by branded players. The online meat market in India has huge headroom for growth. The demand is only surging, and the sales of online meat players are seeing a significant rise. This trend will further intensify, and India’s online meat market will be very interesting soon. 

What are the consumer pain points?

Purchasing meat from local butchers

The Covid-19 scare forced people to stop going to their friendly neighbourhood meat shops, which has helped online players to a great extent. Super verticals in online grocery and food delivery like Licious, FreshToHome, and BigBasket turned out to be safe and convenient options to acquire fresh meat directly to the doorstep. Covid-19  transformed the fish and meat purchasing behaviour of consumers dramatically. 

Due to safety concerns, consumers moved to e-commerce and online demand shot up for most of the companies. Covid-related apprehensions in purchasing from local/offline butchers led to offline players effectively communicating their superior quality and hygiene practices which boosted customer confidence.

Hygiene issues

As we are aware, the local butcher shops chop meat in roadside stalls which are most often open, teeming with fleas, and are surrounded by unhygienic conditions like open sewers, garbage dumps, stray animals, traffic, and pollution. Online meat companies slice, chop, store, and pack their meat in interiors at controlled temperatures against hygienic, conducive settings for the meat to remain fresh as long as it makes its way to the consumer’s table. The meat provided by online players is clean, without any stain of blood, and has negligible odour. 

Start-ups like Licious adopted industry-first and global standard food safety, and quality management systems right from the beginning of their journey to always ensure hygiene. The success of online meat providers is attributed to vertically integrated supply chains with high bars on quality. Licious is a INR 1000 Cr ARR (annual recurring rate) meat brand. 

Less options

With the local butcher, you can’t place too many demands or requests on the specific cut of meat you want, whether you want your shrimp deveined on both sides, or not. They are mostly overburdened with too many orders and are mostly unable to accommodate too many requests. Also, local butchers usually store 1 or few kinds of options in terms of tenderness of the meat or even in terms of the variety of meat and seafood available. 

Online meat marketplaces like FreshToHome offer a myriad of options including fish  and seafood, poultry, mutton, steaks and fillet, and even Ready To Cook pre-marinated meats, gravies, and curries. The pieces that are provided by online meat marketplaces are of high quality, rich in nutritional benefits, and ideal for young, working consumers. 

The players have innovated to provide consumers a wide set of offerings and attracted them through highly relevant and contextual marketing. FreshToHome enables its marketplace sellers to source and sell high-quality meat and fish directly from livestock farmers and fishermen. They receive close to 15 Mn orders per month and $85 Mn in annualised sales run rate. 

Longer wait times

Butcher shops are overcrowded with people placing orders. They are also short-staffed, and orders get vastly delayed. However, in online meat delivery, you can choose the delivery slots which are mostly not one or two hours later than the delivery time. The customer’s order will be delivered, packed, sealed, and fresh, right at the doorstep. 

The ‘eating-out’ habit underwent a massive change in the ongoing pandemic, as people became wary of eating outside due to hygiene and cleanliness concerns. The pandemic also forced people to relook at their food palette and diet as in such times consuming nutritious and immunity-boosting foods becomes paramount. The intermittent lockdowns and curfews imposed by state and central government have painted a grim picture for the QSR (Quick Service Restaurant) chains with the culture of dine-in fading and limited business hours. 

According to a report from Edelweiss Securities, the organised QSR market shrunk by 23 percent in 2021 compared to 2020. Mounting rental costs caused many QSR chains to shut their shops. However, amid losses, QSRs are responding to altered consumer behaviour and bringing changes in their business processes to pull themselves back.

We are already thankful enough to Mughals and Delhi Sultans for adding Kebabs, Firni and Mughlai to the Indian palette, but are grateful to them for introducing their heritage dish biryani to India. Interestingly, since its origin in Persia, biryani in India has evolved under the influence of various tastes and spice preferences of Sultans and Nawabs. The Nizams gave a spicy touch to Hyderabadi biryani, Nawab Wajid Ali Shah added potatoes and aroma to Kolkata biryani and the Nawabs of Lucknow added saffron and dry fruits to add a unique taste to Lucknow biryani. 

Biryani – a concoction of meat, sometimes potato, long-grained basmati rice, and rich spices comprising star anise, bay leaves, cinnamon topped with fried onions is a highly relished dish among Indian families during festive and wedding occasions. 

Coming to current times, several hotels and food companies do serve this authentic dish, but what was not liked by two entrepreneurs – Kaushik Roy and Vishal Jindal – was biryani being treated like pizza or burgers, which hotels served in 20 min. It meant that the dish was repacked and reheated to serve in aluminium foil boxes. They soon plunged into the food business to offer a unique experience of this heritage dish. 

Let’s disrupt the biryani eating!!

The duo, Kaushik Roy and Vishal Jindal began their entrepreneurial venture by founding Biryani By Kilo in 2015 from Gurugram. Leveraging Kaushik’s experience of spending many years in the food industry and Vishal’s dream of entering into entrepreneurship, they thought of developing a cloud kitchen model of delivering fresh dum-cooked biryani. The venture soon opened outlets in different cities. To maintain consistency in taste, the duo implemented customised measuring tools and technology for every ingredient to be used in the same manner at different outlets. 

Biryani By Kilo – reviving the Khansama culture 

Biryani By Kilo revived the Khansama style by offering biryani in an earthen pot or famously known as Handi with the brand name embossed. For every order, the biryani is freshly cooked and with every biryani order, they provide customers with Aanch, a chulha, or a stove to help warm the biryani as per the convenience. Moreover, with the word ‘Kilo’ in the name, they provide biryani in Kgs of 1 to 2 serving 3-4 people, perfect for a small family gathering at home. Biryani by Kilo serves both veg and non-veg biryani in three variants: Hyderabadi, Bengali, and Lucknowi. It also serves delectable kebabs, curries, and Mughal-inspired desserts such as Matka Firni and Gulabjamun with Rabri.  It also offers customised catering for at least 50 people. 

The updates by FSSAI (Food Safety and Standards Authority of India) are regular and consistent for the food industry. They are always available to address any concerns and challenges raised by food business operators regarding their latest guidelines. This shows that they are a proactive government body with genuine concerns towards the health and safety of consumers.

The latest update by FSSAI 

The FSSAI, as part of its regular sharing of updates, has released a note that states that Food Businesses in India will henceforth be obligated to conduct mandatory food testing twice a year. This update comes as a ‘clarification’ by the food regulatory body under the condition of licence according to the Food Safety and Standards (Licencing and Registration of Food Businesses) Regulations, 2011.

Compliance guidelines

Stipulated time and frequency for product testing

Under the compliance guidelines, food businesses are required to perform mandatory product testing twice a financial year on a half-yearly basis. Also, two mandatory testings must be conducted within 3 or more months, never less than this duration. The stipulated time provided for the tests are in the first half of the year from April to September and from October to March in the second half, twice every fiscal year. 

Testing criteria

As per Condition 12 of the Licencing and Registration Rules, food businesses are required to test for relevant chemicals, microbiological contaminants that are included in the regulations. The testing is to be carried out based on required frequency after assessing historical data and risks involved. The products need to be tested through FSSAI’s very own NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited and notified labs. 

Food businesses that come under the purview of the updated guidelines

All food businesses that churn out food products as well as manufacturers come under the purview of the updated guidelines. Also, the FSSAI has mentioned that food business operators with newly obtained licences within the last months of the previous half-year during the months of September and March are exempted from mandatory testing for the previous and concluding half-year period. 

Motive behind the new regulations

The motive behind FSSAI’s decision was to align with the submission of Annual Returns by Food Business Operators (FBO) online on a financial year basis. The decision is also backed by FSSAI’s goal of ensuring the production and delivery of safe food by manufacturers.

India’s tryst with express delivery began when popular QSR (Quick Service Restaurant) chain Domino’s, claimed that it could deliver a pizza within 30 minutes or else the pizza is free. The fact that a pizza company hurrying through jam-packed roads of India could precisely deliver within the said time, added to its popularity. 

Cut to 2021, where the e-commerce space is crowded with an influx of online companies emerging in the space of pharma, retail and food giving more or less similar products and services. The competition to deliver goods to consumers at a quicker pace has grown immensely which has resulted in becoming the point of differentiation. Startups are now excessively focusing on express delivery of 4-hour or 1 hour or even same day. 

According to a report by RedSeer, quick commerce deliveries in less than 45 minutes is projected to be a $0.3-billion market in 2021 and is expected to grow 10-15X in the next five years -that is, $5 billion by 2025.

Why do e-commerce companies want to join the express delivery rush? 

In an offline shopping experience, people get to take the product home instantly after purchase . To replicate the same, E-commerce companies are building their capacities on express delivery to up the game of customer satisfaction. The rate of customer satisfaction in online shopping is linked to the shorter turnaround time. Moreover, essentials like medicines and perishables like dairy products remain fresh for a short time.

There has been significant debate regarding the constitution of blended vegetable oils. The food authority of India had earlier in 2018 realised the ill effects of marketing vegetable oils as ‘heart healthy’, ‘cholesterol safe’ and other such claims. The FSSAI (Food Safety and Standards Authority of India) is thus working to bring transparency in the sale of vegetable oils and to avoid labelling or branding packages with tall or incorrect claims. They want consumers to be aware that the ingredients may be blended into vegetable oils. As such, the FSSAI has recently issued a direction to relabel ‘Blended Edible Oils’ as ‘Multi source edible oils’, omitting the word ‘vegetable’ from a previous nomenclature.

Why this revision?

This revision is being carried out due to concerns regarding labelling of packages by food businesses. A previous revision had mandated the labelling of ‘Blended Edible Vegetable Oil’ (BEVO) as ‘Multi sourced edible vegetable oil’ which was a significantly large nomenclature which would prove to be difficult for food businesses to label on their products. To ease the trouble, this revision has removed the term ‘vegetable’ from the nomenclature to align it on packages.

Effect of the new regulation

When the compliance comes into effect, this revision will affect food businesses, particularly manufacturers of vegetable oils since they will need to make several amendments on the labelling, packaging of the products, and conform to the display rules wherever specified by the regulations.

Market will see change

The vegetable oil market will see a change since food business operators will be uniform in their packaging. This move is aimed at transparency with respect to food packages as consumers will know the precise constituency of its contents. Food business operators will need to quickly clear out their existing stock and inventory of tables consisting of non-compliant packaging before the regulation comes into force. The market may be riddled with bulk sales and discounts on old stock of vegetable oils.

Compliance guidelines and labelling norms

• • Vegetable oil products will need to be rebranded as ‘Multi source edible oil’ wherever specified from the date of effect of the new regulations.
  • Font size, nomenclature on the packages as well as warnings/statements on sweeteners need to be changed accordingly to align with the new label.
  • Packages containing an admixture of edible oils will need to carry the label ‘Multi source edible oil’ in bold, capital letters immediately underneath the brand name on the front of the package.
  • Package sizes below 1 litre need to show the label in a font size of minimum 3 mm and the declaration statement of minimum 35 mm in length.
  • Package sizes between 1 litre and 5 litres need to show the label in a font size of minimum 4 mm and the declaration statement of  minimum 45 mm in length.
  • For packages sized above 5 litres, label font size must be a minimum 10 mm.
  • Lastly, the package must bear the following label in bold, capitals at the front ‘NOT TO BE SOLD LOOSE’.

Deadline for compliance

The revised compliance guidelines will be operationalised from 17 November 2021 and food business operators have until this time to clear out old stock before complying with the new nomenclature.

The restaurant food services job market has worn a deserted look ever since the second wave began. Employees suffered from job losses, pay cuts, and were forced to change their career paths this year. But now that the curve has flattened, restaurants are scrambling to hire people to recover the losses quickly before talks of a third wave emerge. If you are looking to venture into this space, you need to be aware of the pitfalls and the opportunities in the food job market so that you can hire with precision.

Has recruiting halted?

The Restaurant industry came to a standstill early this year, with mass layoffs and a complete full stop on recruitment efforts. But once again, restaurants are looking to salvage the losses incurred during the second wave lockdowns. They are taking advantage of the lockdown lifting and have resumed hiring for key positions like Bartenders, Restaurant Managers, Waiters and Kitchen Staff. Recruitment is picking up from where they had left off in the Food Services business.

Current Recruitment Trends in Restaurants and Food Services

Disinterest among food service job seekers

Currently, only 10% of job seekers in Restaurant & Food Services are seeking urgent job opportunities. Since food businesses are struggling to cope with losses, being employed only means low wages, pay cuts, fear of being laid off, and nil tips earned since operations are no longer happening in full capacity. Finding suitable candidates who are actively applying for jobs and willing to work for meagre employment benefits will be tough for businesses.

Low salaried jobs

The industry is currently unable to entertain or fulfil high salary demands of workers joining or re-joining the workforce. As such, low salaried jobs are trending since industry standards have significantly dipped. Competitive salaries are no longer being offered to otherwise high paying jobs like Executive Chef and Restaurant Managers.

No employment benefits for recruitment in the unorganised sector

The unorganised sector in the Restaurants & Food Services industry comprises solopreneurs or families selling RTE (read-to-eat) meals through roadside stalls, dhabas, food carts, and street stalls. They were once the biggest employment generator and contributor to the workforce in the industry. However currently, employees being hired in these firms will be unable to enjoy benefits since the unorganised sector cannot afford to provide them.

Good news for job seekers – Hiring activity saw growth of 15% in June 2021

As per ‘Naukri Job Speak Index’, a report by Naukri.com, the job market saw a 15% growth in the month of June and is recovering post the second wave. This is good news for job seekers since hiring activity was up by 87% in June across Hotels and Restaurants ever since recruitment took a nosedive with the onset of the second wave.

The phenomenon of Indians eating out has gained momentum in the past decade, especially the organised food services that comprise chain hotels and standalone restaurants. Besides, quick-service restaurants like Pizza Hut, McDonald’s, Domino’s expanding their chains in India, standalone restaurants are not behind in gaining popularity. A standalone restaurant’s offerings vary from basic local cuisine to classical international cuisine and inexpensive to highly expensive dishes.

According to National Restaurant Association of India (NRAI) India Food Services Report (IFSR) 2019, the organised standalone restaurant owned a lion’s share of 75 percent worth of Rs 1,10,534 crore in 2018-2019. Out of the total food services market, the organised standalone restaurant market is expected to own 29 percent in 2022 from 24 percent in 2017, and also will be growing at a CAGR of 14 percent from Rs 82000 crore in 2017 to Rs 1,60,500 crore in 2022 as per a joint NRAI Technopak report.