Global trends of the fast-food market in Kazakhstan

Abstract

Object: The purpose of the study is to analyze the main trends in the global fast-food market and outline the features and prospects of the local Kazakhstani fast-food market, taking into account the influence of the trend on a healthy lifestyle in this segment and its manifestation in Kazakhstan.

Methods: The methodological basis of the research is a quantitative method of online questionnaires, analysis, generalization of data on changes in the fast-food market in new conditions, as well as comparison and extrapolation.

Results: An overview of current global trends is presented and their manifestation in the Kazakhstani market is indicated. It is noted that the global trend for vegetable substitutes for meat products in the fast-food market currently does not have serious development in Kazakhstan, although elements of the flexitarian trend have already been manifested since healthy eating has taken a strong position in the behavioral characteristics and preferences of local consumers. There is a pronounced halal trend on the part of the Kazakh consumer, there is trust and national predisposition to it. The market leaders were identified by the number of points and the level of recognition.

Conclusions: The study showed the concern of local consumers about the harmful component of the fast-food market, as well as a high percentage of respondents' doubts about the possibility of functioning of the fast-food industry in the field of healthy food in general (50 %).

The prospects for the local fast-food market include the preconditions for the predominance of plant components, but not excluding natural meat, and on the contrary, even increased requirements for its environmental friendliness. Thus, in the Kazakhstani market, we can talk about the mixing of the global American and halal trends.

Introduction

Today the largest chains McDonald’s, Burger King, Subway, KFC have international status and are known for a memorable brand, a large menu, and stable prices, for which consumers love them. The modern pace of life dictates its own rules of nutrition: fast, cheap, tasty. The consumption model has become more economical, and the flow of visitors moving from other formats due to economic phenomena provides positive dynamics for fast-food.

However, the American movement for healthy eating in the 2000s slowed down the growth of this market in the United States, but favored the spread of fast-food to foreign markets, including the CIS countries; growth continued until the 2008 crisis and resumed in 2010.

Now the fast-food market is universally associated with inexpensive junk food, which has a pronounced taste due to various additives, flavors, substitutes, etc. Many revelatory books, articles, scientific experiments, films have been devoted to the topic of the harm of traditional fast-food.

Kazakhstan, of course, was no exception and willingly adopted Western trends with a lag of about 5–10 years. The moderate pace of development is due to unformed demand, lower incomes and a corresponding standard of living, and therefore the provision of network catering in the regional context is still very uneven.

The leaders of the world fast-food market are successfully operating in Kazakhstan, along with them, local market participants continue to open up, presenting Kazakh consumers with a product different from international in accordance with local preferences that have historically developed in the country. This article proposes to consider the complex influences of both the global trend of healthy eating and the local characteristics and consumption habits on the structure of the local fast-food market, the characteristics of the product in this market, and the prerequisites for its further development.

Literature review

In his best-selling book Fast-food Nation, Eric Schlosser makes you feel like you might be a whole lot better off avoiding the drive-through and just going home to cook your own meal. Schlosser covers everything from how McDonald's got started to how the hamburger giant has affected cultures all around the world. Along the way, Schlosser exposes the cockroaches and rats found in fast-food kitchens, the overworked and underpaid employees behind the cash registers, the mauled laborers trying to keep up with an accident-prone speed rate in meatpacking houses, and then, of course, the corporate greed driving the entire industry. Fast-food Nation will open your eyes and possibly make you lose your appetite (Eric Schlosser, 2001).

George Ritzer introduced a new definition of «The McDonaldization of Society» in his book of the same name. Ritzer suggests that in the latter part of the 20th century the socially structured form of the fastfood restaurant has become the organizational force representing and extending the process of rationalization into the realm of everyday interaction and individual identity. McDonald's of the 1990s serves as the case model (George Ritzer, 1993). The book introduced the term McDonaldization to learned discourse as a way to describe a social process that produces «mind-numbing sameness», according to a 2002 review of a related academic text (Gilbert, Elllen D., 2002).

In general, the fast-food industry was viewed by researchers as having a negative impact on health, and was also often viewed as a metaphorical concept, when the main characteristics of this market were manifested in other areas, as well as in society as a whole.

Fast-food culture tends to value pre-packaged, fast, cheap, and convenient in lieu of sustainable and healthy options. This culture is not limited to food consumption, but impacts how leaders run their business. As uncertainty and complexity grow in global businesses, the fast-food mentality has spawned reactive individuals rather than thoughtful and thorough leaders. We term this trend «Fast food Leadership», because the metaphor provides a framework for understanding common mismanagement and remedies to prevent practitioners from propagating the fast-food culture. We propose several symptoms of a fast-food leader: immediate gratification, shallow vision, and unrealistic expectations. There is no fast and convenient way to wean organizations off a steady diet of fast-food, but we provide good first steps: value quality over speed, commit to change, and invest for sustainability. By starting to bring back healthy values, bad habits can be broken (Ng, Ernest; Kelloff, Ashley, 2013)

McDonald's, as the main associated player in the fast-food market, caused huge interest among researchers and a lot of works are dedicated to it.

McDonalds is a multi-billion multinational corporation that is recognizable by almost the entire global population; furthermore, it is seen as a model of modernization, sanitation, and responsible management. This book studies the rise of McDonalds in east Asia countries and seeks to examine the impacts it has in terms of globalization and localization. For some scholars, McDonald's is seen as American cultural imperialism; they argue that «it is the domination of popular culture that matters most in the postmodern, postsocialist, postindustrial world (Watson, 2006).

Thus, in modern literature, the term McDonaldization began to appear. «McDonaldization... is the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world» (Ritzer, 1993:1).

The McDonaldization process can be summarized as how «fast-food restaurant principles are beginning to dominate more and more sectors of the recent quantification of the worldwide homogenization of cultures as a result of globalization (Pieterse, Jan Nederveen, 2009).

An even more negative character to the fast-food industry in general and to McDonald's in particular was expressed in the following works.

In his bestselling book, «Fast Food Nation: The Dark Side of the All-American Meal», journalist Eric Schlosser chronicles the history of the fast-food industry and describes the industry's impact on the US economy and society. He researched the fast-food industry for many years. Schlosser interviewed slaughterhouse workers, pastoralists, potato growers, fast-food employees, founders and franchisees, and families who have lost a loved one to food poisoning. In the course of his extensive research and travel for this book he discovered many little-known, often disturbing truths about the fast-food industry.

We can find an entirely different perspective on fast-food industry. It argues that McDonald's and some other new styles of fast-food in Japan express long-standing Japanese cultural patterns, and facilitate human intimacy and warmth not possible with some other, more traditional styles of inexpensive and rapidly served food in Japan (Traphagan, John W.; Brown, L. Keith).

Encyclopedia of Junk Food and Fast-food by Smith, Andrew F. is the primary balanced source for information about fast-food and junk food. The authors tell that not all fast-food is junk food, but most are. Some fast-foods are high in calories and low in nutritional value, while other fast-foods, such as salads, may be low in calories and high in nutritional value (Smith, Andrew, 2006).

The book Regional American Food Culture By Lucy M. Long tells about the origins of the formation of American cuisine, says that there is nothing natively American in American cuisine, and all American dishes are the result of immigration. An interesting excursion, which has its own historical evidence and thoroughness (Lucy M.Long, 2009).

If we move on to the question of modern smart marketing of fast-food, then first of all, of course, we can talk about the need to switch to healthier options for fast-food products.

While many women are attracted to the «eating habit» aspects of traditional sandwiches, most also want healthier options when in a hurry. Fast-food restaurants (QSRs) appeal to women by offering a combination of menu changes, marketing efforts, and modernizing the restaurant environment (Healthy Menu Options, 2005).

Marketing for moms is an important part of the equation for many restaurants. The recent media attention to childhood obesity and, by extension, baby food has prompted fast-food marketers to rethink their menu options for baby meals and their marketing to moms.

At KFC, moms are a key marketing target for dinner (the company segments its marketing by meal times/occasions). The company's advertising is aimed at meeting the common need of moms to quickly prepare a family dinner. Whereas previous lunchtime efforts highlighted the product, the company's new marketing focuses on connecting the product with a real need to feed the family. The recently introduced product, the Variety Bucket, which combines several chicken products, has been designed to meet another mother's need: to satisfy the tastes of all family members.

Reaching out to women according to their needs and day-to-day experiences is a theme that runs through all of McDonald's new marketing programs. In 2002, the company took a long, careful look at its marketing and concluded that while many moms came to buy Happy Meals for their kids, there wasn't a lot of products or marketing tailored to their own needs. The salad, which went on sale in May 2005, also received a $1 discount coupon on any other premium salad. During the promotional period, all premium salads were packed with green forks to symbolize freshness, and outdoor advertisements were placed on green poles. The four-page spread in women's magazines included a colorful pop-up with salad and a trial coupon (Healthy Menu Options, 2005).

This article will offer an analysis of the Kazakhstani fast-food market using the example of the largest city of Almaty and analyze the preconditions for its healthier reorientation.

Methods

In assessing the impact of global trends on the local fast-food market, both qualitative and quantitative methods of analysis were used.

Thus, the review of global trends identified the main one in the form of the influence of the trend on proper and healthy nutrition, which in the fast-food market is manifested in two directions: the use of alternative meat products of plant origin, as well as the halal trend, which positions a healthy trend through the use of environmentally friendly meat.

In the course of this review and market analysis, it was determined that the local fast-food market shows a greater tendency towards the halal trend than towards alternative meat products on the fast-food market. The trend for healthy eating has its manifestation in the local fast-food market and is expressed in a conscious approach to the choice of fast-food establishments.

During the study, an online survey was conducted among Almaty residents aged 18–35 using the Google Forms platform. The sample consisted of 2036 people; the survey consisted of 6 questions, among them there were both open-and-closed types of questions.

The survey included questions about the frequency of visiting fast-food establishments, how the respondents recognize fast-food as harmful to their health, and how much they believe that fast-food can be harmless. The second part of the questions was aimed at the preferences of respondents, broken down by specific establishments, including global franchised fast-food chains and local ones.

During the survey, the following results were obtained:

• 36.6 % of respondents visit fast-food establishments once a month;

• 33 % of respondents consider local player Bahandi Burger the best fast-food establishment, 30 % — KFC.
• 53.7 % (versus 46.3 %) believe that fast-food can be harmless.
• 52.5 % of respondents trust Bahandi Burger in terms of the composition of products, their environmental friendliness, 12.5 % — Red Dragon, DoDoPizza — 10 %, KFC — 7.5 %.
• McDonalds was named as the most harmful food by 74 % of respondents.

Thus, the research methodology revealed the preferences of local consumers towards local players in the fast-food market, the main reason for which is higher consumer confidence in the composition of local products. It also demonstrated the adherence to global trends in healthy eating in the local fast-food market with reference to the halal industry.

Results and Discussions

A persistent stereotype that the fast-food market only includes fast and unhealthy food is currently undergoing some transformation. The trend for healthy eating that has been gaining momentum in the last decade could not bypass the fast-food sphere. Of course, the prevailing stereotype is extremely strong and, moreover, it may seem that it cannot be changed. However, global changes in this regard have already been launched. Let's consider the main ones, and also trace the tendencies of the Kazakhstani market in this regard.

The increased attention to the environmental problems of the world, to the issues of obesity and a healthy lifestyle, contributes to the revision of products in the fast-food sector.

The consumption of plant-based meat is one of the points of the existing trend of flexitarianism. This is an urge to eat animal meat as little as possible, trying to replace it with plant-based alternatives. Modern Americans are thus trying to be more concerned about their health and the environment.

Thus, the global market for alternative meat products in 2019 is estimated at $12.1 billion, according to Research Markets and Markets (Figure 1). By 2025, it is planned that the market will more than double.

The most popular companies in the US that make plant-based foods are Beyond Meat and Impossible Foods. They use pea and soy protein, as well as dyes and flavor enhancers to give the vegetable cutlet the look, texture, and flavor of animal meat. In the second quarter of 2019, Beyond's restaurant and food service revenue grew 483 % from a year earlier, while its grocery store revenue grew 192 %. In late summer 2019, Beyond is up 528 % since its initial public offering in May. (Food and Beverage Market Research Report, 2019). Impossible Foods, having taken over the US market, is already aiming to distribute its products in Europe. Both competing companies actively promote their products in fast-food restaurants, industry leaders McDonald’s, KFC, Burger King, Subway.

In August 2019, KFC became the first national fast-food chain to introduce plant-based chicken in the U.S., partnering with Beyond Meat to create a «Beyond Fried Chicken» product only available at one Atlanta location for a limited test. The test proved so popular that lines wrapped around the building, and the store sold out of the faux chicken in less than five hours. KFC called it a «Kentucky Fried Miracle» and told the New York Times that the restaurant sold as many of the Beyond boneless wings and nuggets that day as it would normally sell of its popcorn chicken in an entire week (KFC leads as first national US EST to test plant based chicken, 2009)

There are practically no alternatives to the vegetable burgers Beyond Meat or Impossible Foods on the Kazakh market. In domestic non-specialized stores you can find soy meat, vegetable cutlets. In specialized vegetarian or dietary stores, the choice is slightly wider: there you can buy sausages made from cereals and beans, vegetarian dumplings, pates, vegetable steaks.

Vegetarianism and eco-activism are not so strongly developed in Kazakhstan, therefore there is no strong influence and imposition of the consumption of plant products. Although it should be noted that in the past few years the cult of health, healthy eating, healthy body has increased, and the proportion of people who refuse to eat meat has increased. For the Kazakh consumer, vegetable meat is perceived rather as something artificial, unnatural, and therefore unhealthy.

Nutritionists are also doubtful about artificial meat, since it is a highly processed product. Doctors recommend making vegetable cutlets at home. The factory-made vegetable burger contains processed soy or peas, as well as substances that give an acceptable appearance and taste to the product. According to American nutritionist Catherine Perez, processed soy does not contain the key nutrients of regular soy and may contain harmful compounds (Amelia Lucas, 2019).

From 2015 to 2018 global meat consumption increased by 8 %, according to the firm Euromonitor International. Most experts in the meat industry in Kazakhstan do not consider the interest for vegetable meat a threat to the animal meat market. They see herbal products as exotic or entertainment for high-income shoppers. Even after 10 years, experts say, the share of vegetable meat products in the consumer basket of Kazakhstani buyers will be insignificant (Food and Beverage Market Research Report, 2019).

In this regard, it is assumed that fast-food manufacturers will mix more products of animal and plant origin. Rather than becoming vegetarians, burger makers will try to prepare healthier foods that are high in vegetables. It is also assumed that manufacturers will try to cook food with less cholesterol, and this can be achieved by increasing the amount of vegetable ingredients in the cutlets.

In contrast to the American trend for vegetable meat, there is a trend for the halal industry. Muslims make up more than a quarter of the world's population, and it is strategically unprofitable for any manufacturer to ignore the needs of such a market. It should be noted that not only Muslims are consumers of halal products, often people who do not profess Islam choose these products for their quality and safety.

The global market for halal products, which includes both food products and non-food products, is estimated by experts at about 2.1 trillion USD, providing 1.6 billion people, and this market is generating 25– 30 % annual growth (Halal Goes Global, 2015).

According to the Quality Standard for Halal products, only food that is prepared in accordance with Muslim traditions is marked in a special way, which means that it does not contain pork, carrion and blood. In addition, the meat of an animal slaughtered according to the canons of this religion will be considered a product of «spiritual origin». Slaughter is a ritual, during which a person needs to read a prayer and cut the carotid artery to the cattle so that the blood drains completely from the carcass. According to gourmets, thanks to this procedure halal meat has such a pleasant exquisite taste.

Special requirements also apply to halal products at the processing stage. So, in the manufacture of sausages or any other meat products at the plant only chilled and not frozen meat should be used.

Among the leaders of the fast-food market only KFC has a Halal certificate. But other world players are thinking about this perspective, first of all, in order to have another weighty reason to position the ingredients used as natural. At the same time, many local players in the fast-food market are very active and have the opportunity to obtain Halal status, which is undoubtedly a competitive advantage in many local markets.

If we turn to the specifics of market of Kazakhstan, consider Table 1 with the main players in the fastfood market, broken down into global and local representatives.

Table 1. Fast-food brands presented in Kazakhstan, 2020.

Based on the data of the pivot table, several conclusions can be drawn:

• In terms of the number of outlets, KFC is the market leader among global players, and Bahandi among local ones.
• Feedback expressed in terms of visitor ratings is higher among local players than international ones.
• The number of points of sale among global players is several times higher than local ones.

Let's consider the main distinguishing features of the basic fast-food market players:

• KFC’s slogan sounds like «Your safety is our priority! We always use only the highest quality fresh, whole chicken meat. That is why we choose our suppliers with great care. But we are sure that our chicken meat is the best. Fresh, whole chicken meat is not only a guarantee of the unique taste of your favorite dishes: tender crispy chicken slices, spicy chicken wings, strips, sandwiches, and salads. It also means the confidence that you are getting the highest quality food!» (About KFC company, 2020).
• Burger King. «The main difference between Burger King burgers is the way of cooking, in which the meat is fried over a real open fire. This method gives the beef a special taste and aroma, moreover, it is known that grilled meat is healthier than fried in oil: excess fat, when grilled, flows into special grooves, reducing the calorie content of the dish. The slogan of the company is «Make it your way». For example, there are about 260 thousand different combinations of ingredients in the preparation of a whopper: with and without cheese, with and without onions, with and without cucumbers, etc.» (Burger King, 2020).
• Hardees notes that their signature 100 % beef burgers are cooked over an open fire, and the chicken menu is 100 % whole chicken fillet.

• Local representative Bahandi has the slogan «Taste of Real Meat». And Bahandi Burger is a 100 % natural meat burger, without GMOs, soy products, preservatives. The following factors stand out from the advantages:

• – popular brand, excellent value for money;
• – large and juicy cutlets;
• – always fresh products, freshly-baked buns;
• – eco-friendly products;
• – branded compotes (Bahandi burger, 2020).

• Gippo is a local company in the fast-food sector that has a full cycle of food production. They do not use frozen food in production, only chilled food, purchasing ingredients from local suppliers. Almost all components of products, including meat and vegetables, are produced in Kazakhstan. The buns are also selfbaked using premium flour. The company sets high-quality requirements for its suppliers. Has a positive image in the market.

The authors conducted a survey of the local population of Almaty at the age of 18–35 years. One of the questions was devoted to consumer confidence in the composition of fast-food manufacturers. The leader was the local fast-food player Bahandi, who lived up to his slogan «The taste of real meat!» and positioning

naturaliy. Bahandi was also voted the best performer by the survey (33 %), with KFC ranking second (30 %). And according to the survey (Figure 2), the most harmful representative of the Kazakhstani fast-food market was McDonald’s (41 %).

Thus, we can conclude that global trends in the Kazakhstani fast-food market are manifested to a greater extent in the direction of the halal trend in view of national specifics. It is also necessary to note this manifestation at the level of confidence of local consumers in local fast-food players, while the world American representatives of the fast-food industry appear as the most extensive in terms of the number of points and recognition.

Conclusion

The analysis carried out in this article allows us to assert that the goal of the study has been achieved: an overview of current global trends is presented and their manifestation in the Kazakhstan market is indicated. The research methods used in the form of market analysis, consumer surveys made it possible to recreate the general picture of the studied problem.

Summarizing the main results of the study, it should be noted that the global trend for vegetable substitutes for meat products in the fast-food market in Kazakhstan does not currently have serious development, although elements of a trend for flexitarianism may appear, since healthy eating has taken a strong position in the behavioral characteristics and preferences of local consumers.

In this regard, the halal trend has a greater response from the Kazakh consumer, there is trust and national predisposition to it.

A review of the Kazakhstani fast-food market showed the market leaders in terms of the number of outlets and the level of recognition. Here it is necessary to state the leadership of KFC, the loyalty of the survey participants to this fast-food brand is high, the data on the number of reviews and the overall rating confirm this.

The survey of the local population also showed a decent competitiveness of local player Bahandi Burger. This player was noted as a leader both as a trustworthy composition of products and as a leader in fastfood products in general. Knowing the preferences of the local consumer better than American competitors has an obvious advantage here, but one should take into account regional expansion, which this player does not have, in contrast to the American representatives.

In general, the survey showed the concern of the local consumer about the harmful component of the fast-food market, as well as a high percentage of respondents' doubts about the possibility of functioning of the fast-food industry in the area of healthy food in general (50 %).

As the prospects for the local fast-food market, it is possible to single out the prerequisites for the predominance of vegetable components in fast-food, but without excluding natural meat, and even increased requirements for its environmental friendliness. That is, we can talk about some mix of American and halal trends, for example, in the form of a burger made from natural Kazakhstani meat with a large amount of plant components with a high fiber content and useful properties.

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