Why chains need to diversify its channels and formats, as told by Restaurant Brands International, Focus Brands, Pizza Hut and Chatime
Analysts also provide an outlook for the future and on particular trends.
Quick-serve and fast casual restaurant brands should seriously consider diversifying its channels and adjusting its store formats to ensure its relevance in the COVID-19 era, four of Asia-Pacific’s top executives said during the QSR Media Asia Conference & Awards’ annual Leaders panel.
The acceleration and stronger performance of off-premise models, such as delivery and takeaway, was a common observation by some of the panelists.
Burger King and Popeyes’ president for APAC Sami Siddiqui said the delivery channel has become “much more prominent”, observing an increase in greater basket sizes.
“You see bundles [being ordered by] friends and family who are maybe isolating together; we’re seeing new guests coming through that as well,” he said.
Siddiqui also briefly commented on dark kitchens, noting how their Tim Hortons business in Thailand is primarily operating through that model as a way for them to gauge demand.
“We’re still in the business of figuring dark kitchens out, if it’s a viable business model,” he said. “It has to fit into a sort of portfolio approach to development.”
Delivery also had a significant role in contributing to Chatime Australia’s margins, chief executive Carlos Antonius said, a channel complemented by their Loyal-Tea app programme. He described the knowledge acquired through the app - now with 750,000 as a “saving grace”, especially during the earlier lockdowns, in order to be more informed in reaching and growing their customer base.
“That has enabled us to drive, particularly from an NPD (new product development) perspective when we are doing our R&D (research and development) innovation to high-frequency users to gauge their acceptance of new products,” he explained.
Considering the usual concerns over profitability via delivery platforms, Bain & Company Thailand partner Derek Keswakaroon advised third-parties to consider themselves as platforms for chains to market themselves.
“What this means for QSR players is [for them to] really think about how to best leverage the platform,” he said. “They are disintermediating your relationship with your customers. But because they have a compelling proposition for the consumers, it’s very difficult for [chains] to say ‘I’m not going to be there.’
At the same time, however, he advised brands to have a two-pronged approach to delivery: partnering with third-parties and building its own capability if it has the resources for it.
“You don’t want to put all your eggs in one basket,” he said. (Keswakaroon earlier offered a trends report with Fai Assakul during the event.)
Pizza Hut Asia chief operating officer Vineet Sharma, who shared the chain’s framework on adapting to the pandemic, observed a boom in takeaway on their end. To ensure zero-contact, he revealed that the chain has pivoted to using unique QR codes for digital ordering.
“I would say it is upwards of 85 to 90%,” he revealed, referring to the sales growth being experienced through that channel.
Steven Yang, Focus Brands managing director for APAC, observed that the Cinnabon outlets close to supermarkets were doing “very well”, takeaway-wise, adding that they are also seeing chains pursuing co-branding strategies as a creative way to adapt.
“In our Korea business, we’re seeing Jamba Juice working with [retail company] Lululemon...Everybody has been looking for different channels,” he said. “Within the last three months, a lot of our channels started growing...we’re seeing deals with Costco, we’re seeing channels emerging from traditional channels.”
The industry’s performance is fairly consistent with the region’s economic movements, according to Moody’s Analytics APAC chief economist Steve Cochrane. Arguing that the COVID-19-led economic recession is over, he expects economic conditions to improve over the next year.
“International travel and tourism is still shut down, but domestic travel seems to be replacing that,” he said. “They have to spend, they have to eat out. They may be looking to familiar places and that may be part where we see pent-up consumer demand be expressed.”
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