QSR is no longer a six SKU game: Burger King India

Since its launch over a year back in India, Burger King has expanded at a fast clip. Raj Varman, Chief Executive Officer of Burger King India and Jaspal Singh Sabharwal, Partner at Everstone Capital Advisors (Everstone has a JV with Burger King for India operations), talks to Business Today about the brand's warm reception, investments, and the challenges.

Q. Burger King India launched its first store in November 2014. What has been the response since?

Now we have  33 restaurants open; 15  more are in the construction phase. There are stores in NCR, Bangalore, Mumbai, Pune, Punjab. We are working on sites for the next year. We are humbled by the response. In Select Citywalk (Delhi), we saw 5000 people come in on the first day. In Bangalore's Phoenix Market City mall, we had sales of Rs 10 lakh on the first day. In the last one year, every month, we did average daily sales 25-30 per cent higher than the competition.

Q. What is the investment per store?

Between Rs 1.75 crore to Rs 2.5 crore.

Q. Consumption has slowed down. How does that impact the burger business?

I think this is a recession-proof business. When customers see quality and you continue to innovate and evolve, you are better equipped to handle the cycles of QSR business. There is a lot of new innovation. The quality of food is going up every year. The quality of products have continued to improve.

Q. Is QSR losing ground to casual dining?

Casual dining is moving towards single outlets. It is not a scalable format. For instance, Johnny Rockets. To replicate the format is very difficult. The need is different here and so is the experience. Quick Service Restaurant is no longer a six SKU game. There is a lot of positive pressure - and never a dull moment. The innovation is keeping things interesting.

Q. The burger market appears to be being seeing a segmentation between value and volume?

Burger King thinks of it more as occasion-specific. Different occasions have to be catered to. If its breakfast or lunch, it can be value. If its dinner, it could be premium. Every QSR does product structuring.
 
Q. What are the main challenges for a new brand in the current market? 

The ability to short-list the right real estate. The malls can be done quickly but there are not many malls in the country. The growth will come from high street and zeroing in is a challenge. Second is recruitment of the workforce and creating the right culture.