The future of fast food

SA’s competitive fast-food industry was mostly spared from the Covid-19 lockdowns, but times are changing and there may be more upheavals on the way.

- Johan Fourie

South Africa’s fast-food industry is a textbook example of a competitive industry. No franchise dominates the market: while KFC is the biggest, there are at least 20 other brands with at least 30 stores. Think of Steers, Debonairs, Wimpy, Nando’s, McDonalds, Fishaways, and King Pie, to name just a few.

And there are always new entrants. In 2018, the celebrated owner and chef of Overture, Bertus Basson, opened De Vrije Burger, a burger and chips fast-food joint, in Stellenbosch. I asked him what he learned about fast food that he did not know before. “Firstly, fast food in many respects is an easier business model to manage than serious sit-down restaurants. Because our fast-food model is more linear, it was easier to equip our team to be specialists in their field. The self-service model can be very successful. Focusing on only one thing adds speed and quality in delivery.”

With the focus on speed in an already competitive environment, one would imagine that there is little room for further efficiency gains. But that would be wrong, as a recent Predictive Insights report reveals. Predictive Insights combines economic theory and machine learning to make better predictions. I asked founder and CEO, Rulof Burger, to explain how it is that their machine-learning tools helped Hungry Lion to reduce wasteful spending by 14%.