ThE EVOlUTION OF KUwAIT'S hAMbURGER

SUNDAY, DECEMBER 28, 2014
LOCAL
SPECIAL REPORT
The evolution of Kuwait’s
hamburger restaurant business
Fast casual hamburger concept emerging as own category
By Ali Boshehry
Managing Director
Global Markets
H
amburger was first introduced to
the public in Kuwait when Kuwait
Food Company (Americana)
launched a branch of the famous
American fast food restaurant, Hardee’s,
in the country in 1981. Wendy’s followed
after but shut its operation soon after. 13
years later McDonald’s was launched in
Kuwait in 1994 with its first branch on
Gulf Road. The entry of Johnny Rockets
in Kuwait in 1995 was the beginning of
premium hamburger chains which did
not exist in Kuwait before. Johnny
Rockets’ first branch in Salmiya was the
first to provide customers a different
hamburger experience from fast food.
Prior to that consumers in Kuwait mainly
associated hamburgers with McDonald’s,
Hardee’s, and Burger King. For 15 years,
hamburgers were either served in casual
dining restaurants or fast food restaurants up until 2010 when Elevation
Burger, with its organic food-based concept, set the stepping stone for the fast
casual dining experience in Kuwait. It is
worth to note that locally developed
hamburger concepts launched before
2010. Burger Boutique launched in 2005
followed by The Burger Hub in 2006 and
Slider Station in 2007. These brands succeeded in stimulating the hamburger
market in general and plant the seeds
for future change. Despite the fact that
these locally developed concepts are
mainly in the casual dining category but
their fresh take on hamburgers attracted
early investors to the hamburger restaurant business such as TABCo and
Alshaya. Their early entry into the industry did not go beyond a short lived hype
among youngsters and slowly faded
away. They fell into the same trap that
most local businesses fall into which is
turning their 100 square meter restau-
rant concept into a brand that lives with
generations. The clear definition of business concepts powered by strong operational management and social engagement are key to growth in the foodservice industry.
Smart consumers
“Organic food was not popular in
Kuwait, and people didn’t really seem to
talk about it much. However, we took the
bet that people are smarter than what
general market census might say,” as
stated by Ali Ashkanani, CEO of TABCo
International, Elevation Burger operator
in Kuwait. The opening of Elevation
Burger in the Avenues in 2010 was the
wake up call to many investors to realize
the potential success of such concepts in
Kuwait. Many international chains such
as Shake Shack, SmashBurger, and
FatBurger entered the Kuwaiti market
shortly after and were able to take a considerable share from those that have
been operating in the country since the
1990s. Today, the current hamburger
supply in Kuwait is one of these four
concepts: fast food hamburger, fast casual hamburger, hamburger catering, and
casual dining hamburger channels. This
niche category, fast casual hamburger, is
transforming from an emerging trend to
become a category by itself. Fast casual
hamburgers are not like other food service trends that popped into the market
and died quickly such as frozen yogurt
and cupcake stores. First, hamburgers
are not seasonal meals to be affected by
the long months of summer or few cold
months of winter in Kuwait. Hamburgers
can be consumed multiple times weekly
because they are fast, priced reasonably,
and are considered a full fledge meal.
Second, consumers in Kuwait are
exposed to the international food scene
and the hamburger culture is deeply
integrated in their travel abroad for
many decades which makes it strongly
accepted by consumers of different ages.
Such strong association and acceptance
of the meal makes consumers consider
this particular food option at least three
times a week. As a matter of fact, 15,000
Kuwaitis formed an 11 kilometer drivethrough line at the opening of the first
McDonald’s in Kuwait in 1994. We saw
people lining up for frozen yogurt but
not as much. The line for frozen yogurt
and cupcake stores got shorter and
shorter over time mainly because they
are new derivatives of existing food concepts that did not capture a long term
appeal.
Full grown category
The hamburger trend is now a full
grown category and is here to stay. As
per the market research studies conduct-
ed by Global Markets, there are currently
around eight international chained
brands in Kuwait with more than 30
branches and generating more than
KWD 11 million in value sales annually
under the fast casual hamburger categor y. Some of these brands such as
Elevation Burger and Shake Shack are
rapidly increasing their branch count
and competing head to head with
brands outside their category such as
McDonald’s and Burger King.
The rapid transformation witnessed
in this new category will also result in a
market correction which will lead to
closing of entire chains or branches.
Investors who already invested in this
new category and those looking to
invest should study the existing competition and strategize to ensure the suc-
cess of their investments. Three elements
that currently differentiate the successful
fast casual brands are: menu prices, geographic branch allocation, and social
engagement. The fast casual category is
characterized by offering affordable
quality food in a fast food theme.
Pushing prices into the casual dining
price range while offering limited customer service and smaller food portions
will push customers to seek other alternatives. Geographic branch allocation is
another factor that is hugely misread in
the market. For some reason, franchise
owners of this category enjoy competing with each other door to door. The
Avenues for example features six outlets
and Divone complex in Abu Al Hasania
features three outlets. Such high concentration of the same food service category will result in oversupply of the same
product to the same consumer demographic. Owners should scout and position themselves outside the traditional
food and beverage areas such as
Salmiya, Hawally, Kuwait City, and
Mahboula. There are new residential
areas outside the old commercial parameters that need to be considered. Social
engagement is another critical factor to
increase consumer retention in the long
term which is something needed for a
young category. Solid social media presence accompanied by strong social
responsibility activities plays a major role
in establishing brands as friendly day to
day companions rather than destination.
The category is still young and it would
be interesting to see how it will evolve
further.
About Global Markets
Global Markets is a market research
and a business intelligence company that
was established in 2010 in Kuwait. The
company estimates market sizes and
shares by conducting primary and secondary research.
Egypt President
Sisi due on Jan 4
Egyptian President Abdelfattah Al-Sisi
KUWAIT: Egyptian President Abdelfattah
Al-Sisi is scheduled to visit Kuwait on
January 4, a high ranking source said yesterday. Prior to his visit, a media delegation from Egypt will arrive in Kuwait on
Januray2.
Al-Yawm Al-Sabe newspaper said on
its network site quoting a presidential
source as saying President Sisi will discuss bilateral issues in addition to
regional and international issues of
mutual concern. Several Egyptians in
Kuwait are preparing to receive president Al-Sisi on his arrival with Kuwait
and Egypt national flags along with welcoming banners.
‘Hala February 2015’ Festival
honors Dr Suad Al-Sabah
KUWAIT: Kuwaiti poet Dr Suad Al-Sabah
will be honored during the ‘Hala February
2015’ Festival in recognition of her role and
efforts in support of culture in the Arab
world, community service and in the
encouragement of science and scientists,
Dr Suad Al-Sabah
the festival’s Higher Organizing Committee
announced yesterday.
Honoring Dr Suad Al-Sabah during the
festival, which kicks off on January 8, also
comes as a result of her leading role in
encouraging the Arab youth on the literary,
scientific and artistic creativity, Waleed AlSaqoubi, member of the Supreme
Committee and head of the media committee of the festival, said in a press statement.
He recalled Dr Suad’s launching of many
initiatives and incentive awards in the scientific, literary and artistic fields, especially
the Fine Arts and her role in linking the
Arab culture with the western one through
an annual award in London for the best
English literature on the Middle East.
He added that Dr Suad is a valuable literary and cultural personality locally and
regionally and has published several books
and works in poetry, literature and economics fields, in addition to her practice of
fine art, in which she excelled since her early literary presence so far, thus, enabling
her to find for herself and for the Kuwaiti
women a prominent place among the
giants of Arab literature of poets and
artists. — KUNA
Local company contracted
for National Operetta
KUWAIT: The Information Ministry has hammered out a KD495,000 contract with a local
company to carry out diverse art activities pertinent to the National Operetta 2015, which is a
core feature of Kuwait’s annual national celebrations. The National Operetta is of paramount
significance due to the fact that it enjoys the
sponsorship of His Highness the Amir Sheikh
Sabah Al-Ahmad Al-Jaber Al-Sabah, His
Highness the Crown Prince Sheikh Nawaf AlAhmad Al-Jaber Al-Sabah and His Highness the
Prime Minister Sheikh Jaber Mubarak Al-Hamad
Al-Sabah, Saud Al-Khaldi, rapporteur of the
organizing committee, told KUNA yesterday.
The National Operetta is the fruit of persistent cooperation between the ministries of
information and education. Kuwait is geared up
for marking the National Day, Liberation Day
and annual anniversary of His Highness the
Amir’s assumption of power, not to mention
ongoing celebrations on the occasion of the UN
honoring of His Highness the Amir as a
Humanitarian Leader and Kuwait as a
Humanitarian Center, he said.
Minister of Information and Minister of State
for Youth Affairs and Chairman of the Standing
Committee of celebrating the National Events
Sheikh Salman Sabah Al-Salem Al-Humoud AlSabah and members of the committee are
closely monitoring preparations and arrangements for the National Operetta, he added.
The operetta should obviously reflect real
loyalty to the nation and its wise leadership,
emphasize national unity and demonstrate the
civilized image of the State of Kuwait, Khaldi
pointed out. — KUNA
First Deputy Prime Minister and Foreign Minister Sheikh Sabah AlKhaled Al-Sabah
Iraqi Foreign Minister Ibrahim Al-Jaafari
Kuwaiti-Iraqi higher
committee meets in Baghdad
KUWAIT: Further developing bilateral relations
on all possible domains will be the main theme
of the fourth meeting of the joint Kuwaiti-Iraqi
high committee scheduled in the Iraqi capital
Baghdad today.
The meeting, to be co-chaired by Kuwaiti First
Deputy Prime Minister and Minister of Foreign
Affairs Sheikh Sabah Khaled Al-Hamad Al-Sabah
and Iraqi Foreign Minister Ibrahim Al-Jaafari, will
focus on means to boost relations between the
two countries through the efforts of the committee which was established on January 12, 2011.
Since 2011, a number of key issues on the
improvement of Kuwaiti-Iraqi relations were discussed by the senior officials of both countries.
Accords concerning the coordination of maritime efforts in Khor Abdallah waterway, customs cooperation and investments were
amongst the most important deals struck during
the committee’s meetings. Also since the launch
of the committee, high-level visits by Kuwaiti
and Iraqi officials occurred.
In 2012, His Highness the Amir Sheikh Sabah
Al-Ahmad Al-Jaber Al-Sabah led Kuwait’s delegation to the Arab summit which was held in
Baghdad cementing Kuwait’s efforts to reconcile
Indonesia grateful for Kuwait’s
support during Tsunami
said the Kuwaiti diplomat,
KUALA
LUMPUR:
noting that the town also
Indonesia is grateful for
had a mosque and a health
Kuwait’s support during
center to serve the
the Tsunami which hit the
Indonesian populace occucountry in 2004 which
pying the area. He indicatkilled nearly 230,000 peoed that Kuwait’s contribuple, Kuwait’s Ambassador
tions were well received by
to Indonesia Nasser Al-Enizi
the Indonesian governsaid yesterday. During his
ment which named the
participation in the decade
Gulf country as one of the
anniversary of the Tsunami,
strongest contributors of
Enizi told KUNA that
Nasser Al-Enizi
relief aid efforts after the
Kuwait, through Kuwait
Red Crescent Society (KRCS) and oth- devastating Tsunami.
The Tsunami which hit Indonesia
er entities, helped in relief aid efforts
to support the Indonesians during in 2004 was a result of an earthquake
their crisis. Among the Kuwaiti efforts in the Indian Ocean. In addition to
was the construction of a 150-house Indonesia, Sri Lanka, India, Thailand,
town named after late Amir Sheikh Maldives, and Somalia were also
Jaber Al-Ahmad Al-Jaber Al-Sabah, affected by the quake. — KUNA
Parliament to receive
e-media law in February
By A Saleh
KUWAIT: The electronic media law has
been reviewed, and Information
Ministry Sheikh Salman Al-Humoud will
present it to the Council of Ministers
next January. Sources said that the government will send it to the National
Assembly not later than February 2015.
Multimillion deposits
The committee investigating the
deposits and transfers of million will
hold a meeting today to continue
meetings with officials in preparation
for its report. The committee is expected to discuss comments of the Audit
Bureau and testimonies of the Central
Bank Governor and his answer specific
requests by the committee. The committee will meet Foreign Ministry
Undersecretary Khalid Al-Jarallah during its next meeting.
with Iraq. Conversely, a high-level delegation led
by then Foreign Minister Hoshyar Zebari visited
Kuwait in 2013. The visit resulted in the signing
of two memos within the framework of the border control and development.
Though diplomatic relations were officially
consummated in 2008 with the mutual opening
of Kuwaiti and Iraqi embassies in the capitals of
both countries, the strongest gesture of reconciliation came when an aircraft belonging to the
Iraqi air ways landed at Kuwait airport on
Februar y 27, 2013, ushering a new era in
Kuwaiti-Iraqi relations. — KUNA
SMEs fund enters
executive stage: Chairman
KUWAIT: The National Fund for
Small and Medium Enterprises
(SMEs) Development has entered
a new stage after its issuance of
its
executive
regulation,
Chairman Mohammad Al-Zuhair
said yesterday. The executive
regulation is integral to the
Fund’s legislative structure as it
explains in detail the means and
mechanisms of enforcing the relevant law so that it can achieve
its targets, Zuhair told KUNA. The
SMEs field is a sophisticated one
under its new definition and so
the regulation was carefully prepared to guarantee that the law
would be soundly implemented
to realize the set goals, serving
entrepreneurs and beneficiaries,
he added.
The 42-item executive regulation defines the Fund’s targets
and domains, as well as the management mechanisms on the
administrative, technical, financial and organizational levels, in
line with law 98/2013. It also
specifies the powers of the Fund’s
board of directors, starting with
setting the general policies and
deciding on feasible initiatives
and projects reaching to founding measures, in addition to protecting entrepreneurs’ ideas,
drawing up regulations to guarantee that the offered financing
is proportional with the financial
Dr Mohammad Al-Zuhair
ability of the proposed project.
One of the major terms for a project according to the executive
regulation is that costs must not
exceed KD 500,000, Zuhair said.
Over the past period, the Fund’s
board was busy over preparation
of its strategy for the coming five
years, based on encouraging
entrepreneurs and project owners. — KUNA