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Food and Beverage 2015-06-14

Slicing out cheesy returns from pizza biz

Pizza, which was initially considered more of a snacking option in India, is fast taking the hot seat replacing lunch or dinner of the Indian consumers here. The domestic pizza market has seen a huge growth with not just foreign, but Indian players too sh

By Sandeep Rana, TFW Bureau Senior Copy Editor

The Indian QSR (quick-service restaurant) market is estimated to double to Rs 70 billion ($1.1 billion) in 2015-16 from Rs 34 billion in 2012-13, as per a report by Crisil Research, an Indian credit research agency. The domestic pizza market is worth above 1500 crores and has been growing at a CAGR (consumer annual growth rate) of 26% for the last five years.

As per reports, Domino’s Pizza, which runs 876 stores in India, is the leading brand having over 55% market share alone in the organised pizza market and 70% market share in the pizza home delivery segment. India is the second biggest market for the American pizza maker after the US, which is way ahead with 5,000 stores.

Its rival Pizza Hut is also doing good business in India. Other than the two pizza giants in the Indian market, Papa John’s, Little Caesars, California Pizza Kitchen, Sbarro, PizzaExpress and Neopolitan Pizza are also fast gaining ground in India.

Tier II and III cities hot on pizza palette 

The Indian fast food market, which used to be concentrated only in the metropolitan cities, has been witnessing a robust growth pan-India over the past few years. Tier II and III cities are the focus of the leading pizza makers due to huge opportunities there.

According to a new research report, ‘Indian Pizza Market Analysis’ by RNCOS, a Business Consulting Service firm, the Indian the pizza market is expected to register a strong growth in the coming years in tier II and III cities. Pizza Power 2013 State of Industry Report, US, states Brazil, Russia, India and China are seen as emerging pizza markets of the world.

Of late, Domino’s with an eye on pan-India expansion has been aggressively strengthening its presence in tier II and III cities  such  as  Bhiwadi  (Rajasthan),  Korba  (Chhatisgarh),  Rajahmundry  (AP),  Aligarh (UP),  Hoshiarpur  (Punjab),  Belgaum  (Karnataka),  Dharamshala  (HP) and Rangpo  (Sikkim).

“We are extremely happy to be expanding our footprint on way to achieving our ambition of being in the vicinity of every pizza lover in the country,” said Ajay Kaul, CEO, Jubilant FoodWorks Limited.

Also looking to expand its footprint further Indian brand ‘Neopolitan Pizza’ has ambitious plans too. “We have planned to open 35 more outlets pan-India in the financial year of 2015-16,” adds Mukund Purohit, Chairman and MD of the company.

High rentals in metro cities and bigger brands having already established their presence there, the pizza makers are moving to tier II, III and even IV cities due to rising demand of consumers in the smaller towns. Growth in these cities is also attributed to an increase in nuclear families and working women, steady growth in incomes, changing lifestyle and eating patterns and a greater accessibility of QSR outlets.

The brands are now finding huge opportunities in the smaller towns unlike past when malls and metropolitan cities were the only business locations considered apt for the pizza brands.

Serving pizza via franchise route

International and domestic pizza brands in India are expanding their stores via the franchise route throwing many opportunities for entrepreneurs in the country. Be it Domino’s, Pizza Hut, Papa John’s,  Sbarro, Neopolitan Pizza or any other pizza brand, majority of them are spreading their footprints through the franchise model in the country. Domino’s Pizza has Jubilant FoodWorks Limited as it Master Franchisee which has about 887 restaurants in 199 cities.

Another global player PizzaExpress is looking at major expansion across India in the next five years with an eye on opening 50 restaurants. The brand will invest about Rs 150 crore for the same. While, Vadodara-based quick-service restaurant (QSR) chain Neopolitan Pizza brand also runs about 26 pizza restaurants in India through its network of franchisees. It has plans to open its restaurants in Dubai and Toronto.

Comment
Hamidou 15, Nov 2014 at 01:10 PM
good to join you!!
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