Tier I and II cities Jun, 30 2015

Smaller towns emerge as favourite for chicken QSR brands

India is the second largest egg (65,000 million eggs production per year) and third largest broiler-chicken producer (3.8 million tonne of poultry meat a year) in the world. The market is estimated to be worth about Rs 90,000 crore. Such tremendous growth

By Sandeep Rana, TFW Bureau
Senior Copy Editor
Smaller towns emerge as favourite for chicken QSR brands

The per capita chicken consumption in India has been growing, with eating habits changing majorly in the metro cities. Rising income and easy availability of the poultry meat has also led to the mushrooming of the organised chicken QSR brands in India.  According to the Economist Intelligence Unit, Indian fast-food industry is estimated to double in size between 2013 and 2016, to $1.12 billion. The demographic trends show that it could become the next mega-market for the international fast food players.

Commenting on the Indian market, Sanjeev Pant, Senior Vice President, CP Foods, which runs about 275 Five Star Chicken stores here, says, “India is one of the top five priority markets for CP Foods globally. We place significant importance on research and development to meet our customers and consumer's needs as well as improve production efficiency at every step of operations which ultimately benefits our business partners.”

Adding to this, Greg Creed, Chief Executive Officer, Yum! Brands, comments, “India is an important emerging country for Yum! as it is projected to become the largest consumer market in the world by 2030. Our India Division has a long runway of exciting opportunities and endless possibilities to grow over the long-term.”

Tier I, II favourite biz destinations        

For leading chicken QSR brands, tier I and II cities are the most important markets when it comes to expanding in new horizons in India. Not just in metro cities but even in tier II cities, poultry meat organised players are fast attracting consumers. Last few years have seen a large number of leading players’ outlets opening in these two segments.

On its expansion in different cities, Pant shares, “We are looking at Telangana and Andhra Pradesh for our next expansion, besides continuing to grow in regions where we are already present. Our plan is to encourage local entrepreneurs in metros as well as in smaller towns.”

On this, Niren Chaudhary, President, Yum! Restaurants India, says, “Our brand building strategy is focused on providing exceptional customer service, localised menu offerings, a skilled yet diverse workforce and deep penetration across tier I and II cities. We have strong brands, strong business models and are extremely well positioned to deliver on our goal of having 2,000 KFC, Pizza Hut and Taco Bell restaurants in India by 2020.”

Franchise route for expansion

Like many popular QSR chains, including Domino’s, McDonald’s and Burger King, specialised chicken QSR brands are also expanding their footprint via the franchise route in the Indian market. It has not only helped their brands grow fast along with understanding the local consumers but has also given many opportunities to prospective franchisees.          

KFC, Five Star Chicken, Mr Fried Chicken, Panro's Crisp Chicken, ChicKing, Hot Chix, W 'N' F, LC Systems and Mad Over Chicken are some of the brands that work on the franchise model.

On franchising Pant, comments, “Franchising provides great opportunity for entrepreneurs to start their own business. So, nearly 90 per cent of our outlets are Franchisee-owned and operated.  We want to double our outlets to 500 from present 275 in the next four years via expanding in metros as well as smaller towns. We have a scientific approach for setting any Five Star Chicken store. There are two important criteria in this process first is getting the right site and second getting the right franchisee. Further in 2016-2017 timeframe, we are also planning to launch our frozen and packaged food brand in India, with our line of chicken sausages, nuggets and other frozen items.”

Related: Steer clear of franchise termination

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