Indian Hospitality Industry 19

Appended below is Nothing Good or Positive about International Fast 

Food Chains  in India, I am very serious about the state of affairs 

when I say what follows..!

o   First one to come to India with a bang was, Pizza King (Part of Shakey’s Pizza Chain) in 1984, shaking the food industry like never before and closed down in just four years with over 22 outlets in Delhi and Mumbai. Consequently the next few years witnessed a phenomenal growth of Halwai business and by default Narula’s came to the fore.I remember in 1995, when KFC (Kentucky Fried Chicken) opened in ‘Friends Colony’, the first customers who visited and queued up, were well to do educated middle class Delhiites. We all felt that we have finally arrived and were all set to share the international platform.

o   Why we were so keen to bring International Fast Food to India?, Because of reasonable prices, high levels of hygiene standards, Strict Quality control, and all new world famous international fast food cuisine which was  not available in India e.g. Fried Chicken, Pizzas, Burgers. In 1996 it was  Domino’s Pizza, followed by Pizza Hut and King of Fast Foods McDonald’s. Then Subway opened their first  outlet in 2001, followed by Dunkin Donuts in 2012 and Burger King in 2014.I am not counting AU BON PAIN, Carl’s Jr, IHOP, Papa John Pizza California Pizza, Wendy’s, Taco Bell, Krispy Kreme and many more. 

o   We the urban Indians are always very much excited about all the different variety of foods chains coming to India. We willingly accepted all these chains with open arms and big heart. As September 23 comes to an end it’s going to be 30-35 years, I decided to try to understand where these international fast food chain’s stand today, and why most of them were not doing too well. My views on these concepts are very personal, and are not influenced by any opinion or any other extraneous factors; I may be right or wrong, that only time will tell, but much will depend on the adjustments or let’s say course correction these chains are willing to make.

1.     Domino’s Pizza; Today they have over one thousand four hundred and ninety five outlets in over 320 Indian cities. But when you compare it with their American or European counterpart, their product served in India has not been upgraded or improved, whereas American and European products are far superior in terms of quality, variety and innovation. In India only innovation is Indianization and Modification - period! At this juncture, I assert  with good amount of conviction that, we Indians don’t want to eat the Indianized version -  instead we want the authentic version of truly American Domino’s Pizza same as what is served across the USA. We have always been looking American favours and taste, which has been missing. I feel that the only reason they (Domino’s Pizza) are surviving is because of pizza’s satiety value and delivery system.

2.     Pizza Hut; Opening of their first restaurant was more like, as if an international casual dining chain of the sorts had finally arrived in India. In the early stages they had similar clientele to that of TGIF or Pizza King. But within a few years the downslide started, simply because of no innovation in the menu, as a result slowly the outlets started experiencing product fatigue. To survive, they started the delivery system similar to that of Domino’s. Pizza Hut restaurants use to be my favourite in America because of amazing Salad Bar to go along with great Pizzas. In India some of their restaurants even served wine and beer. Unfortunately like America, Pizza Hut is no more a favourite Pizza joint in India – when compared to Domino’s they are left with only 413 restaurants and are declining.

3.   Pizza Express; A British Pizza chain, they serve the best and remain the most innovative pizza joint in town. But they are little expensive when compared to most other upmarket Pizza chains. Their product is genuinely International, flavours are amazing, certainly a treat for every Pizza lover. But they are also going through hard times because of gourmet product line and high prices.

The fact remains that India’s pizza market has not grown simply because of the distinctive Indian palate, as a result pizza chains have been under pressure to  modify / Indianize their menu to match the Indian taste and in the process they have not only lost their unique flavours but have also diluted their identity. Today every big city has a pizza outlet offering similar or even better value pizzas’ for the same or less money. Domino and Pizza Hut need to get better products and taste, add variety for health conscious generation, even upgrade technology to maintain their leadership position.

            1.     McDonald’s; Number one Fast food chain in the world. People who taught the world quality, standardisation and efficiency to the food Industry, unfortunately in India they have lost their authenticity and sheen. A chain created by the genius of Ray Kroc, lives a compromised life in India. In America even today, who’s who of American society lives on their product including Ex-President Trump, who makes no bones about his inclination toward MacDonald. In India with over 900 outlets, they are surviving only on Aloo Tikki Burger and softy. Service and quality standards have been compromised beyond belief. You will never hear people suffering from bad stomach by eating McDonald burger anywhere in the world, but in India nearly one in every middle class family will confirm of the same. In early eighties when we had a meeting with the head of McDonald’s International business Director on his visit to India, we were told that their main issue was to make sure they overcome the food quality & outlet hygiene issue in India. And today at least one person in the family has been victim of bad food. On other hand, you will never hear anyone getting upset stomach after eating at Haldiram or Bikaner. My view about McDonald’s is, that they have selected wrong operators as they are pure vegetarian franchises, one is Marwari from Mumbai and other one a baniya from Delhi both coming from very strict vegetarian back ground, where they don’t even eat garlic or onions. Those guys are more than happy with Aloo Tikki Burger and a Softy; I guess their targets are met. Why would they be keen on finding ways to sell real McDonald’s food, for which the chain is famous for, or even consider improving the quality? And this is the biggest compromise by McDonald. Today a very large number of middle class populations have travelled to different parts of the world and all of them will confirm that the product in India is way below the standards compare to Middle East, Europe or America.

            2.   Burger King; Although a late starter,with over 350 stores, has been a big disappointment in India. It is difficult to believe that it is the same chain which won strong legal case against McDonald regarding quality of their products on their own merit. Concept of Broiled burger is just a myth in India. All grilled burgers patties are pre-cooked, just heated and served. In the race of price line, like McDonald they have lost their brief. I feel that we in India were looking for authentic American Style Burgers and what we are getting is a poor version of Indianized burgers and that also you have to be very effective in ordering freshly prepared burger, otherwise they will try to pass off old prepared burger. I would not be wrong if I say that nearly 20% of burgers sold by McDonald and Burger King, as per their own standards are NOT FIT for human consumption. I also feel that Burger King should stop copying McDonald’s strategy and must be bold, innovative and serve truly American Burgers in their true original character and style. I still remember that every time I use to take a flight from the Zurich Airport, I would make a point to visit Burger King and have Chicken Burger or even a Vegetarian Burger and as always, they were outstanding.

            3.   Wimpy’s, Wendy’s, Carl’s Jr. Including Dunkin Donuts; These are some of the international burger chains that have either exited or are on the verge of collapsing, simply because they serve inferior quality product, while trying to create the Indian version. I have no hesitation in stating, that we Indians are one of the largest communities, which have travelled many times across the world, in last decade and who are well aware of the quality standards of international Fast Foods in other countries and these very people are the one who are rejecting these burger chains, that they all patronise when they go abroad- what a paradox. Indians still love burgers, but due to poor clones of international fast food served in India they are now-very seriously-looking at the local chains. Only in Gurgaon we have over fifty outlets serving freshly prepared burgers (check it out on Zomato if you please) and these are doing well in their own way.This is true for all metros.

The fact remains that India is a huge burger market, both Non-Vegetarian and Vegetarian. We all know that Mumbai alone sells, native style Indian  Burgers called Vada Pao and  they sell more in one day, than McDonald and Burger King put together in one month. Not to mention the potential of non-vegetarian burgers all over India. What we require is genuine, authentic, good quality Burgers of same standards which is expected from brands like McDonald and Burger King. My hunch would be that they can still be market leaders because of their systems, experience, product quality and worldwide presence if they decide to sell their authentic recipes.

            1.     Kentucky Fried Chicken; Here is another product which has made its mark in Fast food Industry. Kentucky Fried Chicken (KFC) opened their first outlet in 1995, is today the most successful brand in this category. With nearly eight hundred outlets, KFC is second most successful Fast Food chain in India after McDonald. Problem is the product quality, reason being, a)Food available is not the authentic original recipe, b) Too much bread crumbs. Yet they are doing well, as till date they have really no competition. With entry of Popeyes Chicken we expect a strong competition coming up. But real competition in India is with Tandoori Chicken and for that they have a long way to go. As for product analysis, quality of fried chicken served is not up to the mark, it is loaded with chicken skin and excessive coating of bread crumbs. Chicken based chains like, Chick-Fillet or Raising Cane, I feel will do very well if they were to venture in India. At present, what we have in India is already a history in the USA anyway. Indians love eating chicken as long as it is healthy and properly prepared, but serving their downgraded recipes will not help anyone in the long run.

    2.  Subway; In India this is another product, which has made in-roads into the fast food industry.Their first outlet was opened in 2001 in Saket Market. Today they have nearly 550 outlets in India. Ever since then, they have been downgrading the quality of raw material, product and even the standards of hygiene in their outlets.

One of the main reasons India was looking for a Food Chain from abroad was the technology, innovation, healthy product line, unfortunately Subway has compromised on all counts. I have seen cat sized rats freely moving around their Kiosks with my own eyes. As for the product they are losing their original product positioning line Eat Fresh , as they are now leaning more towards pre-cooked sub fillings, poor quality of meats and wilted fresh vegetables. They are now introducing poor adaptations (Indian versions) of Subway sandwiches.

In last twenty years, over thirty International Fast food chains have entered in the Indian market, selling from Pizzas to Burger, Bakery, Coffee, Fried Chicken, Donuts and so on. Most of these chains have not been doing too well. Many of them have closed down; many are heading toward the closer, remaining ones are surviving on miscellaneous products. My little research confirms, that all these products are in trouble because of following reasons:-

a)      Conscious effort to Indianize / Modify the product is hurting the quality of the product and market is not too happy with it.

b)      Not enough research is undertaken to understand the market requirement in terms of consumer profile their likes and dislikes.

c)      Major compromise on the quality of raw materials.

d)      Freshness of product.

It is rather depressing to see those Kings of Fast Food industry are nothing in the face of Indian competition. Because of this, today leaders of the Indian Fast Food Industry are domestic chains of Halwai origins e.g. Bikaner, Haldiram, Saravana Bhavan or Sagar Ratana.

My shout to all of you is – why are you compromising, you are capable of doing better; please get your act together or …!

 

                                           Written by Anil Chak & Virat Varma