Out of the frying pan: Baba Rafi CEO foresees the next challenge for QSRs

The group plans to increase its international presence in the next two years.

With value sales in the quick-service restaurant industry expected to reach $430b by 2027, the demand continues to grow however new challenges are rising and one that will exceptionally challenge QSRs are price increases.

Speaking to Hendy Setiyono, Founder and CEO of Baba Rafi Enterprise at the QSR Media Asia Deliverect Conference & Awards, he noticed that customers are now more price sensitive, which calls for adjustments in the menu.

“We need to adjust some of our menu and products to meet their price level and expectation,” Hendy said. “We need to be creative and innovative in our product and our menu as well as with the pricing strategy.”

This is particularly challenging for the group as it operates 12 brands in over 1,500 outlets in Indonesia and nine other markets. Baba Rafi, originally known as Kebab Turki Baba Rafi, started with only two outlets in 2003 before growing and expanding to Malaysia, Singapore, the Philippines, India, China and the Netherlands.

Baba Rafi’s strategy for its menu is to update it every two months or a maximum of once every three months. This helps drive more interest in the brand, especially if it is in line with an event or targeting a specific trend. For example, last year, Kebab Turki Baba Rafi launched the Kebab Sei Sapi Menu to celebrate its 18th anniversary. Its Menantea brand also tapped into the Korean sensation by dropping a Korean Tea Series, targeting Indonesian Gen-Zs and millennials.

Hendy said challenges will always be there, and one thing leaders should do is learn from other sectors facing similar challenges. Hendy said learning from a more established brand will give a different insight from a brand that just recently launched.

International expansion

Currently, Baba Rafi’s brands are in nine countries aside from its home market of Indonesia. This year, Hendy said the key focus would be on its international expansion with its top brands, its kebab brand Kebab Turki Baba Rafi and its bubble tea outlet Menantea

Hendy previously mentioned Baba Rafi’s plan of conducting an initial public offering on the stock exchange this year.

"Hopefully after our IPO plan, our number of outlets can double from the current achievement of 1,500 outlets and we can become one of Indonesia's proud F&B brands," Hendy said.