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India has more KFCs and Pizza Huts than Canada or Mexico, and they are custom made too

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  • Outside the US, compared to the Americas, India has more KFCs and Pizza Huts.
  • India has more fast-service restaurants than bars, clubs or even full-service restaurants.
  • The top two Indian franchises running KFC and Pizza Hut have changed store sizes, their usability and even menus to cater to Indian wallets and tastes.

You would think that American fast food brands like KFC and Pizza Hut would be more popular on their own property than abroad, such as in Canada and Mexico. But in countries like China and India they are spreading their wings.

While China has a higher number of these stores outside the US, India has more Pizza Hut locations than Australia. It is also very close to Australia in the number of KFCs, proving that Colonel’s chicken and pizzas appeal to the Indian palate.

QSRs – no bars or ice cream parlors

India has 400 million millennials – 120 million of them in urban areas – who prefer fast restaurants or QSRs over pubs, clubs, bars, coffee shops and even ice cream parlors. The country has 2.8 million QSR stores, accounting for a 34% market share in food stores and twice as many full-service restaurants, according to a report by Mirae Securities.

“Millennials are becoming more critical of their consumption habits, both in terms of the frequency with which they eat or order from outside and the variety they seek, and this is not a trend but a pattern,” according to a report from Mirae Securities. .

Smaller, slicker and successful

All kinds of fast restaurants – be it pizza, burgers or fried chicken – have grown. Along with trends and macroeconomic factors, the industry itself recognized this opportunity and improved affordability along with the availability of their products.

The two largest Indian franchises that run these stores in India, Devyani and Sapphire, have both developed a scalable economic model. First, they reduced their store size of both KFC and Pizza Hut by 40-45%, reducing their investment and operating costs.

Most of these stores operate on a 20% margin, which means a payback in less than three years, according to the report. Some of these stores are also focused on delivery — a business that has boomed during the pandemic and is still delivering results — making stores smaller and better payback.

Contribution from delivery activities grew during the pandemic

QSR FY19 FY22
KFC 20% 44%
pizza hut 35% 57%

Source: Mirae Securities

Biryani chicken buckets and combo pizzas

The franchise operators have also revised their menus to meet Indian needs and price points. The most interesting change was to convert the rice bowl offering into a Biryani bucket as the former product never got off the ground. This is the most favored product in the south and has also become a hit in the north and west.

While KFC runs on buckets and zingers, which make up half of its business, biryani and rice bowls make up 7-8% of the business. A similar but deeper strategy was followed by Pizza Hut, whose products and prices far exceeded those of 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 combinations make up about 47% of their sales. The average per customer (APC) has also fallen to 500 from the ₹750-800 it was three years ago.

It also adapts to Indian tastes – launching Momo Mia Pizza and San Francisco Style. The first is already successful and is making high single-digit contributions to sales, the report said.

This variety also ensures that it maintains its premium status while playing the prize cards. Their entry pizza and side dishes are expensive also because the variety is low.

“On the other hand, in the premium category, the combo is priced 37-40% cheaper than Domino’s in the regular pizza and 31% cheaper than Domino’s in the non-vegetarian medium pizza,” the report said. praise it at another vantage point.

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

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