Few years back, Indians had a limited choice when they plan to eat out with some traditional brands like Kwality, and Nirulas etc in QSR (Quick Service Restaurants) and fine dine experience. In contemporary times with several international brands having marked their presence felt in India with multiple fast casual, fine-dine and takeaway facility the eating out culture has undergone a drastic change. International brands have contributed in the growth of Indian F&B sector by providing latest technological advancement competition, improving the quality of service provided by the traditional Indian operators. As a result of international brands foray in India, the unorganised local players have realised the need to upgrade themselves to survive. To add to all this is the increased interest of the Indians to eat out with increased tendency to spent few extra bucks to have good healthy food.
Robbie Vitrano one of the four founders of Naked Pizza says; “We are patient and focused and will carefully seed in our brand with influencers who appreciate Naked as a healthier option that does not require a trade off in taste. With our partners we have identified about 30 micro-markets that are ideal for our introduction. We will start with a pilot, invest heavily in building relationships in the community, learn and move from there. Our first location will be in Mumbai, opening sometime in late 2011.” Arrival of international brands has brought in both competition as well as western food concepts.
Hidden potential in India
The Indian F&B industry is growing at 25 top 35 per cent every year. Indian market still has the hidden potential which is leading the international brands to target the untapped market. The growing trend of eating out has made the market more lucrative. Hence all kinds of franchisees are available within the segment from café shop to an ice cream parlor to pizza restaurant. Sanjay Valluri, Master Franchisee, Quiznos (Southern India) said, “India has a growing economy and upcoming population. These factors are responsible for brands’ entry in the country. We plan to open five outlets by the end of this year. Our strategy is to add 20 more within next three years and rapidly grow to forty locations in India in coming years.”
Motivating factors
Several factors which are responsible for the entry of foreign food brands in India are:
Global exposure: Another factor for the growth and success of international brand is global exposure of Indian consumers. With the exposure people don’t mind trying new taste. Hence the brands also try and customize the food according to the consumers’ tastes.
Quality service: International brands give quality service and fine dine experience to the consumers which they don’t get in unorganised restaurants. Nowadays the customers also look for hygiene and cleanliness so they prefer to go for well organised place.
Busy life style: As these days people are more caught up in their work they prefer eating out and don’t mind to shell out money for eating at a fine dine restaurant. Moreover these days’ people have become more demanding and want to try different cuisines rather going for same Indian traditional food.
Youth appeal: India’s population covers a huge per cent. Youth have always been the main consumer who more often eat out. Valluri tells, “Quiznos is an internationally known brand and we have young upcoming population which has growing likeness for international brands and varied demography. As we have experience and know-how of the local market therefore our partnership will help Quiznos to spread footprints in India.”
The foreign brands are popular here because of the novelty of their offerings as well as the consistency in their operations the world over which has made them famous brands.
The International brands have added enormous growth in India’s franchise F&B sector.
Prominent players
Some of the successful international food brands in India are:
Yum Brands: Yum Brands Inc, owner of KFC, Taco Bell and Pizza Hut fast-food chains, has about 300 stores in India. KFC, Yum Restaurants' biggest brand, is growing rapidly and has a presence in 21 cities with close to 107 restaurants.
Dominos: Domino's Pizza India has grown into a countrywide network of more than 300 stores with a team of over 9,000 people.
Subway: Subway Systems India Pvt Ltd, part of the U.S. sandwich chain Subway, opened its first restaurant in India in 2001 and has grown its operations to 183 outlets in 26 cities.
Quiznos: A US based sub chain recently forayed in to India with its first franchise outlet in Hyderabad.
There are many other brands like Papa John’s, Cookie Man, Dunkin Donuts, Ruby Tuesday, Baskin Robbins, Boost Juice etc
who have gathered great success and popularity in the Indian markets.
Franchise opportunity
There are several international brands still at their nascent stage in India and seeking huge expansion. Quiznos, Naked Pizza, Dunkin Donuts have ample opportunity for the aspiring entrepreneurs. Ajay Kaul, CEO, Jubilant Foodworks Ltd (JFW) master franchisee for Dunkin Donuts India tells, “The model of Dunkin’ is purely footfall driven model. Typically they will be at high street locations malls, educational institutions, metro locations, hospitals and office spaces. In three years we aim 30 stores, in 5-6 years 100 stores and in 15 years time 500 stores. The beauty of the Dunkin’ Donuts is a lot of flexibility in formats. It can be 1500 sq.ft, 1,800 sq.ft and 100 sq.ft. Dunkin’ is basically trying an all day part food solution with a lot of flexibility in localisation in the food.”
Quiznos has already signed franchisees for north and west India expansion and is planning to open ten outlets in Hyderabad in next one year. Pizza being all time favourite delight for Indians has motivated pizza brands to foray India with their specialties. Naked Pizza a US based pizza brand has already selected the Indian partners with plans to foray in to India soon. The brand will focus on one unit at a time.
Franchisee Selection
International brand follow a criteria while selecting a franchisee to maintain their standard. Subroto Mukherjee, COO, Baskin Robbins tells, “We go through a stringent selection process like seeing and evaluating the franchisee’s interest in the business, location, due diligence and is carried out completely before we give the rights to a franchisee. Investments range from format-to-format but the range can stretch from Rs 4.5 lakh to 30 lakh depending on the outlet size and offerings.”
Looking at the Indian market, in conclusion its right to state that international F&B industry has a promising future. The growth is enormous because of the desire and demand of Indian consumers for western food.
