Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
Business Categories
Aug, 08 2012


Vying for a larger byte of the Indian F&B market pie, local and foreign brands are dishing out their own recipe for success. For international brands, glocalisation and constant innovation remain the key ingredients to elicit brand loyalty widening the co

INDIAN consumers got the first taste of international food service brands in 1990's with the advent of fast food brands like McDonald's, Domino's, Yum! Brands owned Pizza Hut and KFC. Beverage brands like Costa Coffee and Coffee World also forayed into India during this period. Since then, Indians have experienced and accepted diverse foreign concepts, including fine dine, quick service and take- away, ice-creams, beverages, bakery concepts, and they have relished global flavours brought by brands like Subway, Baskin Robbins, Gloria Jeans Coffee, Papa John's, Sbarro, Cinnabon, Marrybrown, Pizza Corner, Cookie Man and many others. These brands continue to tantalise the Indian palate even today. The Indian F&B industry has now become more organised, aggressive and competitive with a number of global and local brands expanding heavily. Now, consumers are also welcoming specialty food concepts such as Gelatos, Frozen Yoghurts, Smoothies and Juice Bars, Falafels, and Shawarmas. With a wide assortment of menu options on their platter, the Indian customer today has truly become a king of good times, as brands woo him persistently to win his devotion. Recent international entrants like Starbucks, Dunkin' Donuts, Quiznos, Muffin Break, Smoothie Factory, Berrylite, Pinkberry, Boost Juice, Di Bella Coffee, Rita's , etc., have spruced up the contest nicely. Amidst stiff competition from local brands, international brands are vying to serve a maximum number of consumers from their bowls. To capture the consumer interest, international F&B brands are resorting to innovative brand extensions. They are modifying business models, revamping menus, strengthening consumer bonds, tapping new locations, etc., to grow their Indian presence. Let's explore the strategies these foreign players are creating to enhance their brand pull, win customer loyalty and grab a larger share in the country's food services market.

Localising menu

India is a melting pot of diverse food traditions and dietary habits and its people are receptive to new flavours. However, foreign food brands may need to revamp their products according to local tastes and preferences for wider consumer acceptance. Global Franchise Architects (GFA), the Swiss group of specialty food service brands, has Indian presence through Pizza Corner, Donut Baker, Cream & Fudge Factory and Coffee World. It believes that localisation of menu is essential for market success. Joseph Cherian, CEO, GFA Global, says: “Innovation and localisation play a strategic role in GFA's brand strategy. For Pizza Corner we have introduced products like Conizza- Pizza in a Cone, Sandwizza, Fingers, etc. Our Indian range, including flavours such as Paneer/ Chicken Tikka, Paneer Malai Tikka, Veg/ Chicken Kholapuri, Keema La Jawab, etc., contributes significant sales in our Pizza category. Australia-based Di Bella Coffee forayed into India in 2011. It has recently formed a joint venture in India and plans to appoint franchisees to develop further. The brand has partly tweaked its menu. Sachin Sabharwal, Managing Director, Di Bella India, says, “ Di Bella's entire beverage menu (hot & cold) is same globally; however, we have made significant changes to our food menu to suit the Indian palate and many vegetarian items have been added to our offerings. About 90% of our entire desert range in India is egg-less. We have also introduced many Indian dishes such as chicken tikka sandwich, paneer tikka sandwich, and chicken pepper masala. At the same time, we have retained our popular Western dishes, such as chicken club sandwich, to widen our offerings for the Indian market.”

Modifying biz model

An international F&B brand may modify its business model by adopting rebranding and co-branding strategies to match its target market and consumers. Dunkin' Donuts, America's celebrated baked goods and coffee chain known for its donuts, coffee, sandwiches, all-day snacks and other beverages, entered India via the master franchise route by partnering Jubilant FoodWorks Ltd, in 2011. It has rebranded itself to occupy the market space between cafés and QSR segments, as it offers elements of both in the Indian market. Dunkin' has rebranded as 'Dunkin' Donuts & More' to signify its wide product range and the unique experiences that its restaurants offer. Some players may opt for co-branding or piggybacking to enhance their brand power and to offer a one-stop destination for multiple F&B concepts. Allies can significantly reduce operational costs and boost sales by co-branding.

Widening consumer base

Having marked their presence in metros and Tier-I cities, KFC, Pizza Hut, Domino's and McDonald's are now aggressively targeting smaller towns to expand their consumer base. Brands may also change the look and feel of outlets to increase footfalls. Baskin Robbins and McDonald's have opted for makeovers. As many as 15 years after its India foray, McDonald's is planning its biggest and costliest refurbishment in India, in line with its international strategy of attracting more adults. The brand's store will be shedding its recognisable red-and-yellow colours for more subdued tones and will expand menu options to cater to adults. Moreover, its iconic mascot, Ronald McDonald, will be taken away, at least from some of its outlets. The brand's logo will be replaced by a white one in the coming years.

Positioning & pricing

Given the economic diversity in India, Global F&B brands diligently position and price their products to attain profitability. Targeting the gourmet and brand-conscious consumers, ice cream retailers like Baskin Robbins, Haagen Dazs, London Dairy, and Swensens have positioned themselves as upscale or premium brands. However, Baskin Robbins has endeavoured to accommodate more customers by reducing its product portions for lesser prices. US-based juice bar brand Smoothie Factory plans to position itself within the supplemental food product and beverage category. It has recently signed a master franchise agreement in India and its first two outlets are expected to open in Delhi, in the last quarter of 2012. “In India young and educated consumers are increasingly seeking to enhance their long-term health and quality of life. This is congruent with Smoothie Factory's mission to establish itself as a premier health and wellness café by meeting the complete dietary needs of health-conscious consumers by providing delicious smoothies, healthy meal choices and nutritional supplements at best prices,” says James Villasana, President, Smoothie Factory. Exploiting the growing market for fresh and healthy drinks, Australia's Boost Juice signed an Indian master franchisee in 2011, and it will trade as Joost Juice Bars in India. Targeting the middle-class market, teenagers and grown ups in India, Joost Juice promises high quality and reasonably priced products.

Marketing & Promotion

International food service providers carry vigorous 360-degree marketing activities and utilise local marketing and promotional media comprising, TV, radio and print advertising, outdoor and in-store promotions, etc., to connect to consumers and create brand awareness among them. Interestingly, F&B companies are major users of social media channels like Twitter and Facebook. They are engaging consumers via these platforms to form devoted brand communities and to forge long-term brand loyalties as such brand following is expected to translate into increased visitors and sales in stores. They also team up with online discount portals to provide consumers an opportunity to feel and experience the brand, as each visiting customer is a potential brand ambassador.

Distribution & service

In India, an international F&B brand has to deal with several operational and distribution challenges such as food regulations and licenses, deficient quality infrastructure, high real estate prices, supply chain issues, lack of cold chains, logistics and warehousing and many more.

On supply chain inefficiencies, Di Bella's Sachin Sabharwal says: “In India, there are many logistical challenges but we have got our own Di Bella Coffee refrigerated vans. We have an in-house kitchen where the food is prepared daily and sent to our outlets. We don't rely on other companies to handle logistics for us which gives us more control over our operations.”

In the food services industry, the cost of acquiring new customers is more than serving the existing ones. Therefore, customer experience and service delivery at actual point of sale is very important. International brands go an extra mile to retain existing customers and attract new ones. Di Bella will be the first café chain in India to offer a tablet device on each table in its outlets for customers to read the menu and place orders. The visitors will also be able to surf the Internet. Backed by sufficient resources, a company or master franchisee can effectively deliver the brand experience but it can be tricky for a local franchise owner. Emphasising on store ambience and delivery of superior customer experience, which resonates brand attributes at franchise locations, GFA's Joseph Cherian says: “In case of franchise stores, the brands need to invest in training and audits to ensure both service and product standards are maintained at the highest level. Franchisees need to be constantly educated and we have developed a strong franchise support system which makes certain the franchisee stores are well operated.”

The way forward

With the Indian F&B industry clocking an annual growth rate between 25% and 35%, global brands today consider it a profitable market.

The coming of new brands in the F&B sector also underscores the fact that international brands will need relentless innovation and repositioning to save their market share and grow further.

Insta-Subscribe to
The Franchising World
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts