Competition keeps QSR equipment buyers on their toes

Quick service operators (QSRs) have some very specific needs where back-of-house equipment is concerned. And as the sector faces increased competition, buyers are leaving no stone unturned in the quest to ensure their operations are as productive and efficient as possible.

oodservice equipment innovation and the quick service restaurant sector might not have a reputation for going hand-in-hand, but in reality the availability of reliable, cutting-edge equipment is intrinsic to prosperity in this highly competitive market sphere. Fast food operation is all about the ability to deliver high levels of output, usually at sudden intervals, so the absence of sufficient equipment back-of-house will very quickly expose the frailties of the entire model.

But equipment specification is not only borne out of necessity. The QSR sector is going through a process of constant evolution — as illustrated by the number of newcomers to the field in the last five years — and kitchen innovation is something that operations executives are striving for.

At a Horizons conference last year, Paul Pomroy, SWVP and CFO for McDonald’s UK, spoke in length about the culture of continuous improvement that shapes its business, pointing out that changes to its strategy include the broadening of its menu, all-day opening hours in some outlets and refurbishments designed to fit in with what customers demand.

“You have to keep changing,” he said. “Competition entering the market keeps us on our toes and the business sees this as a good thing. We remain market-leading in the informal eating-out sector and that is down to our desire to evolve, while meeting the demands from our customers.”

This evolution is evident in McDonald’s equipment programme, too. One of the more recent and noteworthy additions to its fleet has been the Multiplex Blend-in-Cup workstation from Manitowoc. It has allowed the chain to successfully implement a new range of blended beverage products on a volume basis and is now present in the UK after a successful roll-out in Germany last year, where it was initially installed in more than 1,000 sites. The workstation is capable of delivering high volumes, promises easy and intuitive operation, and is extremely low maintenance — all factors that a modern QSR looks for in an item of equipment likely to be implemented across multiple sites.

It is clear that QSRs are seeking ways to produce good quality food quicker, more efficiently and at a lower cost, and that means suppliers must be ready to step up to the plate.

As Steve Elliott, national sales manager at catering equipment brands Valentine and Cuisinequip, notes: “The QSR sector has challenged the equipment manufacturers over the years to provide the best equipment for purpose, working with a reduced footprint and increased output. They are constantly looking for innovative equipment that will help them to achieve this.”

Fast food chain KFC would certainly endorse that view, having recently introduced the concept of semi-open kitchens to its operations in the UK. Part of that process has involved reviewing its catering equipment requirements and developing a strategy firmly underpinned by a more calculated approach towards kitchen procurement.

Mark Baxter, operations innovation manager at KFC, says: “We are trying to move from it just being an experience-led decision-making process to one that is more scientific and fact-based. We have put in some math principles and engineering principles in terms of a capacity model and process flows so that we become a centre of excellence for making factually-based decisions on the efficiency of the lobby and kitchen.

“The great thing about the way we have gone about designing the [new concept] kitchen is that it has given us the opportunity to open it up and let the customer see into it. It will hopefully take them on the journey of seeing how a great quality product is made for them rather than it just being delivered through a wall, which is a typical QSR experience,” adds Baxter.

The open kitchen design will hopefully take them on the journey of seeing how a great quality product is made for them rather than it just being delivered through a wall, which is a typical QSR experience”

The quick service restaurant sector has lived up to its name by emerging as one of the fastest growing parts of the foodservice industry over the past five years, with commentators noting that it actually profited more from the downturn than any other area of the market. As disposable incomes were squeezed and the rate of inflation outpaced wage growth, the affordability and convenience factors associated with the QSR offerings sat well with punters.

Research published two years ago ranks McDonald’s as the market leader in the UK, with a 16% share of fast food in value terms courtesy of annual revenues that now top £2 billion. In store terms, McDonald’s sits in third place, behind Greggs and Subway. While this trio is synonymous with the QSR sector, the reality is that the landscape continues to witness tremendous diversity.

Healthy fast food alternatives have sprung up in their droves, the traditional takeaway market has rallied, and sandwich, bakery and coffee outlets have carved out their own retail niche with tried and trusted concepts that they are replicating throughout the land.

Burger King

A standardised approach to kitchen design tends to characterise the fast food sector.

One trend that tends to unite these operators, however, is an inherently standardised approach to kitchen design. While some might argue that this stifles innovation from an equipment perspective, others argue that the fixed template model is conducive to change because the impact is so powerful when extended across multiple sites.

“In many ways a fixed kitchen template doesn’t have a significant effect on purchase as the buying criteria remains the same — what is the return on capital outlay, does the equipment fulfil the required tasks and is it at a price I can afford?” says Steve Loughton, MD of Jestic. “The needs and challenges are likewise very similar to other outlets in that they require products which minimise footprint, maximise throughput and tick boxes on energy consumption.”

Bill Downie, managing director of Meiko, suggests that menu changes tend to be a common reason why QSRs adopt alternative or additional equipment, and notes that equipment choice will often depend on whether or not the store is company owned and managed.

“If it is a franchise, then there will be certain pieces of kit that will need to be provided to ensure that the performance is universal no matter where the store is located,” he says. “An example of this may be the coffee chains where the brewing equipment is critical to the operation. For non-critical equipment, which dishwashing selection would probably fall into, this would not be so critical and the decision as to what brand to invest in would be down to price, the after-sales support offering and the customer base that the manufacturer’s machines are already operating in with regard to reliability and longevity.”

KFC is a good example of a QSR brand that possesses a solid split between managed and franchised restaurants, with around 220 of its 870 stores currently under company ownership. Operations chief Mark Baxter explains that equipment decisions are taken on both a centralised and local basis.

“We are very lucky in that we have got an excellent relationship with our management team and the franchisee group. And because we have got equity restaurants and put money into those equity restaurants, we don’t want to get things wrong because we want those to be profitable. We can therefore prove out business cases for our franchisees to take on board. The final decision, as long as it is not brand-damaging in any way, sits with them, but we think that if we can prove out very strong business cases then the vast majority, if not all of them, will take those things on board.”

Quick service restaurants tens to have a tight specification, usually to ensure standardisation for menu production, displays and to achieve best buying prices”

What is certain is that you’ll be hard-pressed to find a catering equipment buyer or specifier out there that will make a snap decision on equipment. Changing one piece of equipment across a number of outlets typically incurs such large costs that extensive testing and trialling is prerequisite to a full-scale roll-out being actioned.

“Quick service restaurants do have a tight specification, usually to ensure standardisation for menu production, displays and to achieve best buying prices,” observes Heather Brooks, sales director at Primeware. “Changing a supplier has many more implications for a chain or group than it does for a single operator and this means that they require very good operational or cost reasons to do so. As a supplier you need to be very persistent, react quickly and be prepared to invest in speculative trials that may or may not produce a positive outcome.”

Steve Hemsil, national sales manager distribution at Manitowoc, points out that QSRs are often driven by a particular concept, of which its success depends on a couple of specific pieces of kitchen equipment. “With this in mind, the reliability of kitchen equipment is very much a priority to QSRs, as if the equipment was to fail, the outlet’s menu will become significantly reduced and this, in turn, leads to a loss of revenue.”

The energy savings that can be gained from specifying certain equipment is far more central to buyers’ thinking than it was in the past, while many are paying close attention to the added benefits that suppliers can offer. These might include longer warranty periods, ongoing culinary support and maintenance contracts, suggests Manitowoc’s Hemsil.

“These add value to the investment and strengthen the relationship between the outlet and the manufacturer. What is more, benefits like culinary support and menu development can help QSRs facilitate the ever-changing demands of their customers as tastes and food trends impact on menus so frequently,” he comments.

Sam Starling, group marketing co-ordinator at catering equipment manufacturer Parry, argues that chasing the next big thing in terms of product innovation should never come at the expense of the operational needs of a chain. She is of the opinion that decision-making must be based on selecting kit that best suits the needs of the business.

“Speed of service is paramount for QSRs, so it is not always best to have a highly complex machine, even if the sales pitch claims that it is quicker or better than a competitor’s. Staff skill levels in QSRs are often basic and so having a machine that is simple, intuitive and easy to use is likely to result in much quicker service. Staff can also be trained to use them in minutes, rather than hours — a big issue when you consider the high levels of staff turnover in QSRs. Furthermore, these machines are likely to be easier to maintain and have fewer parts to go wrong.”

All in all, there is a lot for buyers from QSR businesses to consider. But with competition increasing, and the quality of menus generally considered to be improving, it is a compelling time to be involved in kitchen development at the fast end of the market.




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