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Jun, 15 2012

SPICY INGREDIENTS FOR A PROFITABLE BIZ

Who would like to fly halfway around the world to savour authentic Italian cuisine or perhaps the all-natural fat-free frozen yogurt or Shawarmas and falafels? You no longer need to lament. For, the mega food chains that tickle your taste buds no end are

INDIA’S food and beverage industry is turning out to be strikingly 'hot' for many globally renowned big-shots that have been vying for entry into the Indian market for a long time. As the Indian consumer becomes more receptive to niche concepts, brands from around the globe are targeting India as their next hotspot for not only testing the Indian waters but also to roll in their concepts to tantalise the taste buds of consumers.

 

After the grand success of concepts ranging from quick-service restaurants (QSRs) to fine-dining restaurants and pizza chains, cafes  to juice bars, ice-creams to frozen yoghurt parlours, bakery to fruit bouquets, it's now the turn of Shawarmas, Falafels, Sushi and Resto bars to cast their spell on India's growing food and beverage industry. Industry researchers predict that many more fresh concepts in food and beverage (F&B) are queuing up to test the Indian waters at first and subsequently look for a gradual growth through a multi-city expansion in India. Two most significant factors that have given a boost to global F&B brands in India are the increasing trend of eating outside more often, among every age group and increase in disposable income of the middle class. Market reports suggest that more brands in the organised F&B space are set to tap India by bringing forth their niche concepts, including the entry of Nobu Restaurants, co-owned by Japanese celebrity chef Nobu Matshuhita and Robert de Niro; Sushi Samba, which is known for blending Latin American and Far East cuisine; and London's Chinawhite, a fashionable lounge bar and restaurant.

 

Franchising - the preferred route
After India opened its doors to foreign direct investment (FDI), many much-awaited foreign food chains went for the franchise route for spreading their wings in India. Lately, Japengo Café, a premium brand owned by Bin Hendi Group, a UAE headquartered diversified business conglomerate, also announced its plans to foray into India and it's also looking for franchise partners. Owned by Italy headquartered Happy Time Solutions, Ci Gusta!, a food restaurant chain that specialises in Italian cuisine, has already entered the Indian market through the franchise route and is looking for potential franchisees across North, West and South India.

USA’s Quiznos also struck a master franchise deal with Delhi-based restaurant management company Sub-One Hospitality Services Pvt. Ltd to launch its operations in India. On the other side, Berrylite, a frozen yogurt lifestyle concept, currently operates 10 stores in Singapore. For expansion in India, Berrylite is looking for potential master franchise partners in all major cities and connecting hubs in India.

Korea's frozen yogurt chain Yogurberry also entered India last year. About why he feels franchising to be the promising route for expansion, Pawan Batavia, Director, Synergy Group, Yogurberry's master franchisee in India, adds: “Yogurberry is franchising in the world for long and it has proved successful for the brand to franchise since the format of the business is very much franchise friendly. Secondly, for the brand to expand fast and well-managed at the same time in a country like India, we thought the franchise route was perfect.”

Even, Bahrain-based Shawarma Xpress, Sri Lanka-based Chinese restaurant chain Loon Tao and USA-headquartered Sarpino's Pizzeria, an Italian fast food brand, are also coming to set up their shops in India through franchising. Also, Foodco Group Pvt Ltd, one of Australia's leading retail food franchisors, has signed a regional licence agreement with New Delhi-based South Asian Food and Hospitality Pvt Ltd (SAFH), giving SAFH the master rights to operate the Muffin Break concept in India. It's slated to launch in South Delhi in July-August 2012.

 

Tweaking the strategy
When a global brand from the food & beverage industry makes ingress into a new market, it is felt necessary to do in-depth market research to be able to tweak one's strategy according to its consumers' palate.

Primarily, the international food chains found it tough to match the consumers' taste in India. They also had to re-invent their offerings to appeal to the sentiments of Indians.

So, “a game of localisation” is the key to win the trust of Indian consumers. Brands such as McDonald's, KFC and Domino's, have also tweaked their strategy without diluting the brand's global image. Keeping in mind the regional sentiments of Indians, they have also customised their brand's offerings according to local standards by providing a menu with vegetarian toppings and 'no-beef'. 

In this regard spokesperson of Quiznos India said: “We have both international and local flavours. We have things like Vegetarian Manchurian, Mutton Shikampuri and other traditional Indian flavours.”

Regarding localising the prices, Santhosh Unni, CEO, Costa Coffee (India) that operates in India through its master franchisee Ravi Jaipuria-owned Devyani International Ltd, feels the same. He said: “Costa operates in the premium end of the market and our pricing resonates that fact. However, the success of a pricing strategy is all about ensuring that the customer sees value for the money he spends. While we may be smaller in terms of store footprint currently, we are the preferred coffee brand in the locations and cities where we co-exist. Also, we offer the best in class range of café food in the country today. While being within the broad contours of Western Café cuisine, our range of food is localised to suit the Indian taste profile.”

International food chains eyeing the Indian market must understand the demand generation of consumers and feasible business models that turn out to be fruitful in future. For making a foothold in India, the business model of master franchise has turned out to be a boon in disguise for global brands striving for a larger pie of the market. As India's food & beverage industry becomes hotter like never before, the contention is that global brands can only survive in India if they tweak their strategy according to market's demands and match up to consumers' satisfaction levels.

 

Expansion
Five years down the line, Marrybrown, Malaysia's QSR chain, has a strong vision to open more than 100 outlets. Also marching ahead is Ci Gusta!, which is aiming for at least 150 stores in India over the next five years. The preferred locations for opening the brand's stores will be tier I cities such as Delhi/NCR, Mumbai, Pune, Bengaluru, Hyderabad, Chennai and Kolkata. On their expansion plans, Manpreet Gulri, Country Head, Subway Systems Pvt Ltd, said: “We plan to have 530 restaurants in India by 2015.” For their bid to foray into Indian market, Japengo Café prefers to enter into partnership with potentially strong investors wanting to join its franchisee network in the country. To make the franchise partner's business a success, Japengo Café offers promotional campaign for the launch of the café, along with extensive training to franchisee's chef and staff members. By the end of this year, Yogurberry has plans to add 15 franchise outlets.

Quiznos is also looking forward to opening over 200 stores in the next five years.

 

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