Beyond the plate: Why are QSRs building their brands on retail shelves

Bengaluru-based Boba Bhai, which operates over 50 bubble tea outlets across the country, launched its range of ready-to-drink canned bubble teas in May earlier this year.

Boba Bhai isn’t alone. Frozen momos from Wow! Momo and coffee roasts from Blue Tokai have found their way to quick commerce platforms. These quick-service restaurant (QSR) brands are not only competing with products from legacy firms but also creating new categories, especially in niche areas like Korean food and artisanal coffee. 

​“The same customer who orders Wow! Momo on Swiggy or Zomato is now seeing our frozen momos on Blinkit or Zepto and they’re buying. The customer doesn’t differentiate between channels. For them, the brand is one,” Sagar Daryani, Co-founder and CEO, Wow! Momo tells YourStory.

Its FMCG segment is already doing upwards of Rs 6 crore in monthly sales and is on track to touch an ARR of Rs 100 crore by the end of this year. 

Creating shelf space

“Whether in Singapore, the US, or London, Starbucks isn’t just selling coffee — they’re monetising every inch of their space. Private-label CPG and curated third-party goods let them capture more value from a captive audience, without straying off-brand. The rent and staff are already paid; the customer is there for an experience. Optimising sales per square foot simply means selling more of what fits that brand promise,” says Arjun Anand, Managing Director & Head of Asia, Verlinvest, an investor at Blue Tokai.

Setting up a multi-brand retail store on the lines of  Starbucks in India isn’t easy. Hurdles for a venture of this kind include a cap on foreign ownership, high minimum investments and thresholds for sourcing from local businesses as compared to single-brand formats.

Since curating from a host of different brands and selling them under one roof is a relatively complicated process, brands are adding private labels for add-on categories as a way to maximise sales per square foot metric.

“If you’ve invested in building a product defined by taste, quality, and brand experience, keeping it confined to your four walls is underusing the asset. Customers will look for it elsewhere — you might as well meet them there,” says Anand, who is also a Board observer at Blue Tokai. 

Blue Tokai has retailed its roasted coffee and brewing equipment for years, especially on online channels. However, its steady expansion into modern trade formats like Reliance’s gourmet chain Freshpik, Nature’s Basket, and Ratnadeep, among others, underscores how it is catching on among foodservice brands more broadly.

Strategic shifts

Lighthouse-backed QSR Wow! Momo started exploring an alternate use of its kitchen during the pandemic by manufacturing frozen momos. 

“We didn’t want to furlough our people, and we started manufacturing frozen momos and launching them in retail stores because we had to make our kitchens productive. That’s how it all started but we’re very serious now,” adds Daryani.

Since then, the company has launched its range of frozen momos and cup noodles as well as kulfis on quick commerce platforms and some modern retail outlets.

Daryani says he always looked at Wow! Momo as an all-channel food company, serving customers through food delivery, dine-in and retail. “We never looked at FMCG as a pivot, we always looked at it as an extension."

Side hustles

QSR players are also increasingly adding side dishes and beverages under their private labels on the menu to catch the captive dine-in audience. Side dishes generally come with higher margins compared to main dishes on the menu. This makes owning a brand in the format a recipe for more earnings.

Indian-origin burger brand Good Flippin’ Burgers launched its private-label carbonated lemonade, Flippinade, in April 2024, positioning it as an accompanying beverage to complement its burgers. The product has already grown 4X in the last 10 months.

Brands like Good Flippin’ Burgers are stepping in on a turf that has previously been dominated by legacy FMCG giants like Marico, ITC, and HUL.

Launching something in a category that has a clear gap in the market, a whitespace, or a small niche gives them a much-needed competitive edge. 

“Consumers today are far more informed and seek brands with a purpose, but the fundamentals of marketing haven’t changed. Some unmet needs didn’t appear attractive to incumbent FMCG companies because of scale limitations, but D2C and digital-first players have turned those into viable markets,” Saugata Gupta, Marico MD and CEO had told YourStory earlier this year in an interview. 

“We wanted to introduce a new and fun offering that’s refreshing, bubbly, and ready to go in the premium lemonade space. Flippinade isn’t a replacement — it’s a unique offering we’re bringing to the table,” says Viren D'Silva, Co-founder at Good Flippin’ Burgers.

Trend-setters

Restaurant-led FMCG players are not only competing against FMCG giants on their turf but also harnessing their agility to ride on popular trends like the Korean Wave and better-for-you options. 

According to a white paper by Fireside Ventures, consumers want more balanced and nutritious options, cleaner formulations, and new-age functional benefits. This includes everything from protein fortified staples like bread, yogurts, and preservative-free and clean ingredients products. 

The Hallyu wave exposed consumers to Korean cuisine through shows and music, prompting QSRs and new-age brands to bet on the Korean taste, a space where legacy FMCG players are still reluctant to enter. For instance, Boba Bhai and Mumbai-based Moi Soi were the only two players offering canned or packed bubble tea to users on quick commerce platforms, when YourStory checked in Bangalore.

Wow! Momo has been expanding its range for ready-to-cook noodles and frozen momo. The company has also relied on new flavours like Thukpa, Khow Suey and Korean flavourings. The company recently also launched its range of gluten-free momo, made of quinoa and chickpeas, suggesting innovation with newer ingredients.

Both Third Wave Coffee and Blue Tokai are looking at a different consumer group, those seeking artisanal roasts instead of generic instant coffee.

Protein Chef grew over 3X to clock Rs 45 crore in the last 12 months, particularly driven by the popularity of its protein bread and other products including aata and snacks on quick commerce platforms.

Starting from Q-Com station

Quick commerce is emerging as the first stop for restaurants and F&B players trying their hand in the space. Part of it is because restaurants already share a strong working relationship with food delivery platforms, whose affiliates operate lead quick commerce platforms, namely Eternal’s Blinkit and Swiggy’s Instamart.

Moreover, given the proximity to consumers and speed of execution, allows brands to experiment, fail and pivot faster.

Considering heavy advertising and display costs associated with general and modern trade, brands are looking for a proof of concept on quick commerce (consumer demand and acceptance) before going to offline retail channels.

“We’ve learnt that the FMCG business needs patience. You can’t force your way into shelves. The product has to pull consumers. And for that, you need to get your pricing, packaging, and positioning right. So we’re working on that. And yes, you will see us in retail stores, but it will be planned and gradual,” says Daryani.

As synergistic as the retail foray looks, there is yet to be a consensus on the eventual scale of such operations against the larger restaurant operations.

Wow! Momo’s current retail range accounts for less than 5% of its total revenue, with room for growth. The company expects FMCG to be a bigger business than QSR, especially with its potential for expansion beyond borders.

However, Verlinvest’s Anand holds a more cautious tone. “Quick commerce and modern trade have built the rails for efficient distribution, but I don’t see QSR brands fully pivoting to FMCG or deep general trade. That’s not their DNA, and chasing it risks distracting from the core.” 

While early traction on quick commerce and modern retail has opened new doors, most restaurant-led FMCG plays remain in experimental stages. 

For now, private labels serve as a brand extension and margin lever rather than a full-fledged pivot. Whether these efforts scale into standalone consumer businesses or remain ancillary to their restaurant counterparts, will depend on staying power, supply chain discipline, and whether customers continue to buy into the brand beyond the dine-in table.