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Insight of the Day: Premiumization is driving growth of food chains like KFC, McDonald's, Popeyes

The article highlights the growing trend of premiumization in the Indian fast-food industry, driven by increasing competition and consumers' increased frequency of eating out.

Key takeaways:

  • Premiumization as a growth driver: Food chains are introducing premium and unique menu items to cater to diverse consumer preferences and drive sales growth.

  • Examples of premiumization: KFC's Chizza, Pizza Hut's Melts, and McDonald's Peri Peri flavor are examples of successful premiumization strategies.

  • Target audience: Organised players like KFC, McDonald's, Popeyes, and Burger King are focusing on market share gain by targeting Gen Z and working millennials with increased disposable income.

  • Competition: Fierce competition exists between national and local brands, particularly in the fried chicken segment, with each player offering competitive price points based on taste.

  • Pricing strategies: Brands are luring consumers with attractive combos, discounts, and lunch specials to increase footfall and drive sales.

  • New product launches: Unique and innovative product launches with unique flavors are helping brands gain consumer confidence and drive growth.

  • IPL impact: The Indian Premier League (IPL) season is expected to further boost sales, with consumers preferring to order meals at home while enjoying cricket matches.

Overall, the article suggests that premiumization, combined with competitive pricing, attractive combos, and new product launches, is a successful strategy for food chains to thrive in the increasingly competitive Indian fast-food market.


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