Dive Brief:
- New research from GlobalData shows that Burger King India has registered 66% growth in sales in the year to March 2019. The growth was facilitated by the chain's expansion, pricing and menu strategies.
- Burger King has more than 200 restaurants across 50 cities in India, compared to about 400 McDonald's restaurants in the region.
- The quick-service segment in India overall is growing at a compound annual growth rate of 7% and is expected to reach $63 billion by 2023, from $45 billion in 2018.
Dive Insight:
Burger King has had a presence in India since late 2014, but it hasn’t been alone in targeting the market since that time. According to the Economic Times, six burger chains, including Burger King, McDonald's, Carl's Jr., Fatburger, Wendy's and Barcelos have planted a flag in India in the past five years. In March, Johnny Rockets also announced its return to India earlier this year.
There's a reason for this movement. While smaller chains in the market made up 97% of market share last year, consumer inclination is shifting toward branded international QSRs, according to GlobalData research. India's dine-out market is expected to reach $131 billion by 2022 with QSRs expected to grow 9.2%, according to Euromonitor data reported by the Economic Times. Western branded QSRs are projected to grow at a rate of 13.4%, making up $1.8 billion by 2022.
In August, Burger King India CEO Rajeev Varman said the company will keep its aggressive expansion pace into next year amid an economic slowdown in the market. He said this is because the fast food market is recession proof.
The company's expansion in the market has been effective because of its diverse footprint of traditional restaurants of 2,500-to-3,000 square feet and smaller formats between 300 and 400 square feet in busy areas such as metro stations.
Burger King also found its groove with its menu approach, with a more robust vegetarian menu than its competition, including Starbucks. There are eight vegetarian items on the menu, for example, like the Crispy Veg Supreme and the Paneer King. Nearly 38% of India's population is vegetarian, the highest rate of vegetarian consumers in the world.
The near-term goal for Burger King is to launch over 500 restaurants by 2023, according to Business Today, which would solidify its position as one of the most dominant brands in the fast-growing market. Burger King restaurants generate higher average sales per store than any other chain in India except for McDonald's, which would help this plan along. The chain also plans to invest up to $100 million toward its expansion in the next few years.
Of course, India isn't the only growth market for Burger King. The company has opened more than 1,500 restaurants across the Asia-Pacific region over the last five years in other high-growth markets such as China, South Korea and Indonesia. The company now has 3,000 stores in the region. What's clear is there is a lot of runway for growth in these markets, especially as consumers shift favor to international brands, and India will no doubt continue to produce much of the activity.
