Analysis Of The Fast Food Industry In India And Challenges It Faces

Literature review

The economic growth of a country Comes along with the increasing spending capacity of the citizen. The leisure time in India is mostly spent on dining out with friends and families and fast food are the most favorite option of Indian while they prefer to eat out.

The diet habits of Indians has evolved over time and there were very much influenced by the income of the people price of the food products and individual preferences as well as beliefs of Indians according to their cultural traditions. The Rapid economic growth of India in the past decade has altered the spending habit of the people both in the urban and rural region of the country. The consumption pattern has also changed due to the increased capacity of spending.

Globalization is also responsible for the changing habit of consumption including the food items. The big multinationals dealing with fast foods like pizza, burger and sandwiches enter the Indian market and become popular in very little time. The Government of India has also flexible policies of direct investment in the trading of food products in India. The Indian market is dominated by Multinational companies like ok, McDonald's, Dominos, KFC and Subway. Although Pizza is dominating the market fast food in burgers are also favorite among the Indian people. There is a huge market of burgers in India which can be captured with exotic ingredients and flavor.

This literature review is done to understand the demand in the Indian fast food market and also to understand what type of burgers will be preferred by the Indian food lovers. in order to understand the market, it is also reviewed who are the major players in the fast food market in India so that the organization can make effective strategies before launching their burger in the Indian market.

India an emerging market for global fast food industry 

The amazing growth of the Fast Food industry in India is driven by the significant changes in Indian society. The past two decades saw the entry of women in huge number to the workplaces as a sign of changing attitude of Indian society. Most of the working women in India are young ladies with small children who love to eat out and enjoy their time together. The entry of the young mothers into the workforce has created a market for food items which are preferred by young children and also the adolescents that are healthy, can be served quickly and provide great satisfaction while consuming those food items. The previous generation spent one-third of their earned money on preparing meals at home but the present generation spends half of the earned money to buy food especially from the restaurants or rather the fast food restaurants like McDonald's, KFC And Dominos.

After the liberalization policy came into force in India in 1991, the first fast food chain started their business in India was McDonald's. after then the KFC Domino's Pizza and Pizza Hut set up their business in India either independently or joint ventures with the Indian partners. Initially, all the fast food chains started their business in India's face very lukewarm response from the customers. The multinational organizations took time to understand the Indian culture and food habit of the people.

The successful models of McDonald’s, KFC and Pizza Hut in North America and the European countries fail to impress the customers of India because of the ingredients and taste of the items. Various Research and market studies had been done by those international food chains and the incorporated Indian ingredients in their products and also market the pizza burger and sandwiches which satisfy the taste of the Indians and also not hurt their religious sentiments. McDonald's Dominos KFC and Pizza Hut become more popular after the Indianise their menu and also altered the sitting arrangements in their food joints to suit the Indian customers.

At present the fast food market especially the pizza and burger market at dominated by the four International Food joints and it is expected that the first food market of India will grow by 18% at the end of the year 2020. A significant change in customer behavior and also changing demography responsible for the expanded food market in India which is estimated to be 28 billion US dollar by 2020.

Most of the fast food market in India is an organized and the local stalls dominate the fast food market. There is a huge demand for burgers which is hot and spicy and suits the Indian tastes. The Ambience of the food joints and the services also play a very important part in the business growth of fast food change in India. In India people love to go out with family and friends, therefore, the sitting arrangements should be different from the other countries where people like to visit alone. Clean and hygienic interior with prompt service from well-behaved service person will surely win the Indian customers.

The demand for vegetable fast foods is very high in India. States like Gujarat, Rajasthan, Uttar Pradesh and Bihar are mostly dominated by the vegetarians and people of those States prefer to have vegetable burgers with hot spices. McDonald’s, KFC and Dominos have adopted policies to serve vegetable burgers two dedicated vegetable fast food joints in the states of Gujarat and Rajasthan. 45% of the fast food market in India is dominated by vegetarian fast foods which are mainly hot and spicy.

The fast food dining restaurants are the organized fast food market in India and they have huge potential to grow by the end of 2020. The growth of 27% is projected by vegetarian fast food market in India. The quick serving restaurants are projected to grow by 20% at the end of 2020. The burger joints are expected to grow by 13% by the end of the year 2020.

Reasons for the emergence of burger chains in India

It is very important to understand the reasons for the emergence of fast food chains as well as the burger joints in India in order to start a business of hot and spicy burger in India. Apart from globalization and liberalization policies adopted by the government of India, there are other reasons which are very much responsible for the spread of the fast food restaurants in India including the burger joints. Some of the primary reasons behind the emergence of the burger chains in India are,

Change in gender roles

The gender roles in India are changing as more and more women entered into the job arena or taking up responsibilities to start a business. Earlier all the household chores were done by the women who had to spend most of their time at home. The woman used to be busy cooking food and taking care of the children.  As women are now busy with their job and businesses, the household chores are done by the domestic helps or they do it with the help of electrical gadgets. Similarly, cooking food elaborately at home has also taken a backseat and women along with their friends and family become acquainted with the restaurant culture and they love to dine at various famous joints in the locality.

Most of the working women in India are young ladies with small or adolescent children who prefer to visit the burger joints and the mothers also support it as the burgers fill that stomach quickly and the kids love the taste of it. For these reasons burger joints are very common in India and along with multinational food chains the local burger joints have also become very popular.

More sophisticated customers in India

With Economic prosperity, the customers in India have become more sophisticated and with the advancement of Smart phones and internet technology people are more aware of the varieties of burgers available all over the world and they demand it in their local burger joints also.

Apart from the variation in burgers the customers are also well aware of the hygiene and food quality of the burgers available in India. The customers are particular about the hygiene of the food joint which is not available in the roadside stalls although they offer very tasty food items at relatively less price. Therefore the sophisticated customers who don't want to look for the taste of burgers but also the ambience of the place always prefer the burger joints where tasty burgers are served in a very hygienic way.

Scarcity of time

People in modern India are very much Busy with their job and other engagements they have little time to cook elaborately at home and also have very little time to consume food at home. Whatever little time people get they want to spend it with their friends and family and enjoy eating out with them. The young people of India, who are very busy with their working schedule, prefer to have their lunch or dinners with burgers which fill the stomach and also satisfy their taste buds. The Indians according to their vegetarian or non vegetarian preferences choose the burgers because the burgers can be eaten quickly and the stomach remains to fill for long hours. For all these reasons the burger joints are very popular with the young working Indians.

Increase in per capita income

Due to the effective economic policies, India has witnessed steady economic growth for the past decade which also resulted in increased per capita income in the country. The increase in the per capita income has enabled the consumers to spend more on the items they love to consume. The first foods including the burger topped the list of the Indian customers who love to eat hot and spicy first foods including the burgers. the price of burgers are relatively higher than the street foods available at every corner of Indian roads but the consumers with sufficient income prefer to have burgers at the food joints which also offer them a good ambience to have a happy time with their friends and family. people love to you spend for a good time and in India, there are many burger joints which offer a good ambience along with hot and spicy burgers of many variants.

The burgers belong to luxury food items in India ingredients and also the price of each burger. the burger joins in India offer exotic variants which have unique flavor and taste and those joint sir very popular among the regular customers who have a good time with their friends and families and that particular burger in that particular joint. The burger joints in India both local and the multinationals have been able to create their own brand identity among the customers and the customers swear by their favorite variety of burger in their favorite joint.

The large population of India

India is the second largest country in the world and due to economic growth; the people of India have more spending capacity than the previous decade. This is applicable for both the urban and the rural regions of India.  This number is enormous and if a company dealing with burger business can satisfy the taste of those customers they will attain enormous growth in their business in India. The food industry in India is never out of the flavor and however how much recession is there in Indian economy people never restrict themselves to indulge on the food items like a burger.

The population in India who spend more on fast food like burgers and the young population and they are using numbers who have both the desire to consume burgers of different flavors and also the money to indulge in the food items of their preference.  Therefore the market of India is very prosperous for the business Organizations who want to venture into the fast food market by selling hot and spicy burgers.

Change in government policy

The economic liberalization in India, most of the tariff and non-tariff barriers are lifted or minimized to welcome the foreign multinational business Organizations to do their business in the Indian market. In the food industry in India, the government has given hundred per cent relaxation to the Organizations doing their business in India. The only requirement is doing the business according to the international norms and maintains the hygiene standard and food quality according to the government regulations.

Change in the burger menu

Indian people have different food habit from the Western people and most of the Indians are vegetarians and they are not comfortable with some variants of meat items due to their religious beliefs. The business Organizations dealing with making burgers and serving them to Indian people have altered their popular menus in the Western world and make them suitable for the Indians by including various vegetarian varieties. In India, the hot and spicy vegetarian burgers are very popular with the customers. The sauce and other fillings of the burger have also been Indianised by the burger producers and they add Indian spices in their burgers which suit the taste of Indian customers.

In the non-vegetarian segment, the meats which are mostly used by the burger producers are chicken and lamb. The Pork meat and beef are other popular varieties but they are restricted in many parts of India due to religious beliefs. Most of the non veg burgers are made of chicken or egg in India because people who prefer non-veg burger are comfortable with the two non-veg items.

Apart from the fillings of the burgers, the Indian people are also very particular about the sauce and instead of plain mayonnaise sauce; they prefer spicy and tangy tomato chili sauce. In some parts of South India people also prefer tamarind sauce with their burger. It is up to the burger producers to alter their menu according to the local preferences which will help them to attain their desired business goal in the Indian fast food market.

Challenges related to the burger industry in India

The Primary challenges faced by the food industry and also the burger industry in India can be summed up as the following problems.

The social and cultural restrictions in the Indian society restrict the Indians from switching over to the western breakfast. Still, the Indians prefer to have breakfast in their home and burgers and other fast foods are preferred in the evening. The people who don't find time to have a proper breakfast switch over to corn flakes rather having a burger in the breakfast.

According to the Hindu religion, the people should avoid the food which is hot and spicy in the morning because they are harmful to the body and they also show create hindrance to the spiritual development. The same logic is applicable for the beef and pork meat also. Many people in India garlic and onions which are not considered as pure food for the Hindus. Hinduism has a great influence on the food habit of Indian people and people generally restrain from having the food items which are not what according to their religious belief.

On the other hand, most of the fast food chains are global and they cater to The Western population who are very comfortable with beef, pork and other exotic kinds of meat and other ingredients. Organizations like McDonald's and KFC found it difficult to adjust with the Hindu philosophy of eating in the initial phase. Later on, after extensive market survey both of the organizations altered their menu card and Incorporated more vegetables instead of meat and they also altered the sauce and make them hot and spicy which is more suitable to the Indian customers.

The Indian government is very particular about protecting the environment of the country and hence developed various rules and regulations which are required to be followed by the organizations that are doing business in the country. The first food joints are used to the plastic cups, tableware and the polyethene bottles and other items made of plastic and they are dumped in the garbage instead of being recycled.

This is an unnecessary burden to the environment and according to the government policies; the fast food joints including the burger joints should use biodegradable bottles, cups and plates otherwise their license will be cancelled. These types of regulations have increased the cost of the raw materials and as a consequence, the price of the burgers has gone up. They are the mandatory rules which must be strictly followed by the fast food joints doing their business in India.