2018: Year in Review
We look back at the highs and lows of the Australian multi-site restaurant industry these past twelve months.
From franchising woes to headline-making mergers, QSR Media's Year in Review looks at the biggest and some of the most-read stories of 2018. Here is our summary of the most significant events and trends in the quick service and fast casual restaurant industry this year.
Another tough year for franchising
It was another tough year for the country's franchising sector, which was further propelled to the spotlight following the launch of a parliamentary inquiry earlier this March due to the emergence of various allegations against larger retail networks. The results of the inquiry, initially expected this year, will be released on February 2019.
- FCA's Bruce Billson calls for stricter enforcement of Franchising Code of Conduct
- RFG, Subway, craveable brands., Minor DKL Food Group and Chatime on transparency and profitability for franchisees
- Richard Hinson steps down as Retail Food Group CEO amid turnaround plan
- Mrs. Fields CEO: "Franchising works in a highly regulated environment and yet the landlord-tenant relationship is not held to the same account."
The continued rise of vegan and premium options
Up-and-coming brands and fast food giants alike are continuing to respond to the rising demand for vegan-friendly and premium options with their new offerings, similar to past years. Aside from Australia being the third fastest-growing market for veganism, one analyst we talked to says that operators embracing premium meals are projected to take more market share in the next five years.
- IbisWorld: "Consumer concerns about the fat content of traditional fast foods are likely to limit growth in these segments, while premium products are expected to become more widely available."
- Domino's, Zambrero and Lord of the Fries on the growing vegan market
- Will plant-based and ethnic cuisines reshape the Australian fast food scene?
Store milestones
Some brands celebrated significant store milestones during the year. After seven years, Soul Origin has reached the 100-store mark last September. Chatime, which entered Australia in 2009, reached the same number of stores two months later. And recently, Domino's opened their 700th store in the country.
- Soul Origin CEO: "We have a very strict selection criteria which we do not deviate from, even if it means having to pass on opportunities that may other retailers would not.”
- Chatime general manager: "Appealing to a western consumer, without westernizing the brand, was key."
- Domino's opens 700th national store at Flagstone
New players in town
As some brands continue to expand in the country, the year also welcomed new players that are looking to diversify the restaurant space. April saw U.S.-based fast casual Jon Smith Subs announcing their intent to enter the country, whilst October caught a 'squid-centered' QSR looking to make a splash in Melbourne.
- Jon Smith Subs is confident they will become a household name
- IKA8: "Giant fried squid is the new food and flavour experience of choice and we aim to grow and consolidate new squid markets."
- Croatia's Surf 'n' Fries enters Australia
New look, new feel
Some brands, meanwhile, took the chance of updating themselves this year. Retail Food Group-owned Crust opted for a more modern look, Red Rooster wanted to have a "fun and cheeky" tone to their new in-store design, and family-owned chain Bubba Pizza - to borrow their own words - simply wanted to make it "better."
- Crust: "It’s also about future-proofing the brand image so it’s appealing, contemporary and relevant not just for today’s customers."
- Red Rooster's CEO: The designs "leverage our wonderful Aussie spirit and heritage in a modern and contemporary way."
- Bubba Pizza: "If our brand is going to get noticed, it needs to take on its own personality. Humour is certainly the personality trait that grabs attention."
Joining the global sustainability movement
The year also saw more brands joining the global sustainability movement. July saw McDonald’s Australia pledging to go plastic-free by 2020 and Craveable Brands phasing out single-use plastic bags. Smaller players like Grill'd, meanwhile, also ditched plastic straws altogether.
- Craveable Brands to phase out single-use plastic bags
- Grill'd: "We looked further into the real impact of straws...and knew straight away that we had to get on board."
- McDonald's Australia: "We know plastic straws is a topic our customers are passionate about and we will find a viable solution.”
Companies placed under administration
The year also saw a select group of brands entering voluntary administration for various reasons, each with different fates. Franchise Retail Brands was the first one to do so 2018, which was then later followed by Zumbo Patisserie, foodora, and Max Brenner Australia. In contrast, we also saw brands like Doughnut Time making a comeback after liquidating.
- foodora: "The voluntary administration process offers the company essential breathing space, including a statutory moratorium on claims against the company."
- Max Brenner Australia bought by United Cinemas owner
- Under new ownership, Doughnut Time seeks to find sweet redemption
Tech integration
Brands have continued to infuse technology into their services, further cementing it a a key and inevitable tool to enhance the customer experience. THR1VE and Oliver's Real Food made noise with their respective self-ordering kiosks, Menulog scored key partnerships with KFC and Hungry Jack's, and Domino's upped the ante on delivery by integrating augmented reality in their ordering app.
- Boost Juice reflects on using chatbots
- THR1VE: "The data rich nature of kiosk interaction offers huge potential for us to enhance customer choice and empowerment."
- Hungry Jack's inks exclusive partnership with Menulog to expand delivery services
- Domino's ordering app to acquire further customer insight with new augmented reality feature
Strategic partnerships
The year also saw interesting partnerships within and outside the multi-site restaurant space. Eyeing global growth, Singapore's 4FINGERS announced last September that it bought a 50% stake in Australia-based Mad Mex Fresh Mexican Grill. Ribs & Burgers, meanwhile, continued its string of unique team ups by partnering with 20th Century Fox Home Entertainment to create a Deadpool-themed burger.
- Ribs & Burgers teams up with 20th Century Fox to create the Deadpool Double
- Mad Mex on partnering with 4FINGERS, and why they see “numerous” expansion opportunities in Asia
Sumo's plan to build a house of wellness brands
Last, but certainly not the least in our list is Sumo, who entered administration during the middle of the year only to bounce back and announce a headline-making merger with omni-channel THR1VE. CEO Luke Baylis says this move is their first step to create a house of wellness brands.
