‘Innovation, growing middle class driving recovery in QSR industry’
Amid a projected 5.1 per cent Compound Annual Growth Rate (CAGR) for the global Quick Service Restaurants (QSR) industry between 2020 to 2027, Nigeria’s bourgeoning middle class and its young population pegged at about 60 per cent and the adoption of digital innovation have been identified as key factors that will drive sustainability and growth in the country’s QSR sector.
Chief Executive Officer, FoodCo, Ade Sun-Basorun, made the statement during an interactive session with the press on the state of play within the industry.
According to Sun-Basorun, as key cities continue to swell with a bourgeoning middle class and as both Gen Z and millennials – two unique demographic groups with different palates, tastes and propensities to eating out and purchasing food – begin to emerge as key players in the socio-economic space, it opens up a new set of opportunities for QSR operators to provide offerings that are fit for purpose for those different demographics.
He said it also opens up new ways for industry players to interact with technology, whether it is with rapid deliveries, recurring deliveries, fully cooked, partially cooked or raw items for meal kits.
“We have also seen a growing trend in the health food space with the proliferation of products ranging from salads to parfaits to wraps among others. This trend is being driven by a variety of smaller players serving in one to three chain locations or out of their kitchen via social media.”
”What this shows is that there is a variety of spaces where individuals can innovate to try to meet the needs of different sub-segments within the ecosystem. This presents immense opportunities for operators to seek out their niche positions while also finding a balance in top customer service, accessibility to innovative products and affordability,” he added.
While identifying supply chain challenges exacerbated by the COVID-19 pandemic as well as food inflation among the most critical challenges facing the QSR industry, Sun-Basorun expressed optimism that operators’ resilience would strengthen the industry’s capacity to grow and meet the demands of an increasingly sophisticated consumer class.
He said: “Similar to many other industries, the QSR space had its fair share of challenges during the onset of the COVID 19 pandemic. Outlets were forced to shut down and, in some cases, operate at half capacity at the peak of the COVID-19 pandemic. Inflation has also led to a sharp rise in food prices, causing shrinking margins particularly for restaurants operating in the value space.
The Agusto 2021 Quick Service Restaurant Industry Report estimates that the industry grew by a dismal two per cent during the period.
”However, we remain optimistic because the fundamentals remain strong and the industry remains resilient. The various expansions going on is a clear sign that it is on the path to recovery. In 10 years time, the industry is going to look different from now and the winners will be players who understand the evolving needs of consumers and innovate to meet those needs while successfully navigating the current market. It promises to be an exciting ride,” he said.