Fast Food Industry Iran
Iranian Fast Food Industry Opportunities
Iranians love Fast Food, not only for the cuisine itself, but as a leisure activity and a means of socializing. 79 million Iranians (23.8 million families) are spending 6.3 billion USD annually eating at restaurants according to official statistics in 2013.
During the 8 years from 2005 to 2012, Iranian spend on restaurants increased by 120% and in the coming years this increase rate is forecast to be significantly higher.
It is estimated that one third of Iranian spending at restaurants is concentrated on the Fast Food sector with Iranian families currently spending 2 billion USD annually on Fast Food (~85 USD per family).
Wealthy Iranians (the tenth decile) spend on restaurants is 41 times more than the first decile.
Average Spending by Iranian Families on Restaurants [USD]
To obtain permits to open a Fast-Food business, four key governmental organizations must first be engaged: Police, Municipality, Health Industry and the Industry Union. Importantly, the role of the Police must not be underestimated, as it is considered one of the “red” industries by the police due to its social impacts.
With regard to customers, the key focus for the industry is in Tehran and the other large cities of Iran.
Primary segments of food and beverages in Iran, based on the Industry Union segmentation.
It is estimated that 20,000 Fast-Food establishments are located in Iran, predominately in Tehran. There is also a large prevalence to be found in the next four largest cities Shiraz, Esfahan, Mashhad and Tabriz.
There is a large quality and efficiency differential between Global Fast-Food Chains and those found in Tehran, and also between those in Tehran and the next four largest cities.
There are nearly 2,000 Fast-Food establishments in Tehran city, of which approximately 10% are not registered.
ILIA defines five key indicators of success for Fast Food businesses in Iran. On many of these metrics, we believe existing branches are still well behind.
There is limited diversity of Fast Food options in Iran. Bringing a differentiated offering to the market is important as consumers currently have limited options.
Quality of product is important. So too is the quality of the exterior and interior store front. Progress has been made on this area, but there is still much further to go.
Supply chain management is non-existent. Maintaining the same quality at different branches is challenging.
Workers in the Iranian Fast Food industry require increased training.
Location is one the most important factors of success. Targeting the major population hubs is key.
There are about 2,000 Fast-Food establishments in Tehran city, of which approx. 10% are not registered.
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