Nizar Darwish, executive director, Private Equity at Regulus Capital tells us how Johnny Rockets is changing ways in line with market trends.
The quote “First we eat, then we do everything else,” is remarkably appropriate for the UAE market if we take into account its performance in the recent past. Statistically the country has graduated from an emerging market status to a dominant food and beverage (F&B) destination. Dubai, in particular, is rivalling heavyweight cities in terms of number of restaurants per million population.
Tourism is a major contributor towards the UAE economy and this contribution is forecasted to hit to a tune of over AED72 billion in 2018, 5% points higher than last year. In another 10 years’ time, the figure is expected to touch AED108.4 billion as per recent statistics. All this is made possible due to the popularity of Dubai and Abu Dhabi as a destination of choice for travellers. Dubai overshot all previous figures, registering almost 16 million tourists entering the Emirate in 2017, making it the most visited city in the Middle East and fourth globally. Add in the 20 million odd people expected to attend the World Exposition in 2020 will only boost the F&B spending.
Each year, Johnny Rockets serves over 17 million burgers and 3.6 million kg of fries across the world. Since 1996, when Johnny Rockets opened its first international franchise, we have been continuously adapting to our customers.
While the rise in tourism is proving to be a shot in the arm for the industry, Johnny Rockets have been very focused on providing to the ever-evolving needs of our local consumers.
Technology has crept in every aspect of most businesses and the F&B sector isn’t any different. It’s not just about fancy machinery in the kitchen or the high-tech restaurant management software which take care of everything from shift timings, order tickets, inventory, and P&L accounting. We are gearing towards a time where consumers are making decisions based on social media and the online delivery movement has completely disrupted the entire market.
Millennials alone make up around 40% of the population in the UAE. Compound that with the high smart phone penetration and internet accessibility to the population, it is not hard to believe that social media and mobile phone applications play an extremely important part.
Food delivery apps have made life very convenient for consumers looking for options to satiate their cravings. Beyond convenience and the fact that now one can order food with minimal or no human interaction, mobile applications have made the entire procedure very transparent. The online food delivery market is growing rapidly with a recently conducted survey revealing that almost 60% of smartphone users have downloaded at least one application.
Thus, in the last couple of years, a key area of focus for us has been maintaining our service excellence on deliveries. Today we have a dedicated website and call centre specifically focused on customers that habitually want their food delivered. We have also partnered with all major online delivery brands that specialise in timely delivery, so our food is served hot and fresh and the quality is not conceded. Through our inhouse and outsourced delivery platforms, we now serve to all major locations across the UAE and food delivery now contributes to a significant portion of Johnny Rocket’s loyal client base.
We are also planning our future outside the UAE and Oman. Johnny Rockets is actively targeting to expand its presence in 11 new countries across Eastern Europe and Africa. Eastern European countries are one of the fastest growing countries in Europe. Quick Service Restaurants are gaining significant popularity in politically stable African markets. More and more international concepts today are opening to tap into the growing middle-income population which has played a key role in shaping the infrastructure for stronger supply chains in Africa. Thus, in order to capture this rapidly evolving emerging markets, we have reserved exclusive franchise development rights for Egypt, Morocco, Ethiopia, Uganda, Kenya, Tanzania, Kazakhstan, Georgia, Ukraine, Czech Republic, and Hungary. Expanding into the above-mentioned markets will strengthen our position at the forefront of the premium burger business across these countries and position us best to maximize competences.