India's growing middle class and young population are fuelling a boom in the fast food industry.
The country’s appetite for burgers and pizzas is continuing to grow. McDonald’s, Pizza Hut, as well as locals chains offering Indian fare are all pushing ahead with ambitious expansion plans for India to capitalise on the market’s vast potential.
"At a time when the economy is experiencing a slowdown and many sectors are struggling to grow, one sector that has bucked the trend and grown rapidly is organised fast food outlets, according to Crisil Research, an Indian research company.
The market is set to double to about 70 billion rupees (Dh4.13bn) in the financial year between 2015 to 2016 from 34bn rupees last year, the firm forecasts. It explains that this will largely be driven by new store openings.
A “quantum jump in quick service restaurant spend in urban areas will be propelled by the increase in nuclear families and working women, steady growth in incomes, changing lifestyle and eating patterns and, importantly, greater accessibility of quick service restaurant outlets”, says Prasad Koparkar, a senior director for industry and customised research at Crisil.
Technopak, an Indian consultancy, says that the industry has risen amid “the growing need of the consumer for convenience, increased appetite and craving for international food”.
Hardcastle Restaurants, the company that operates and manages McDonald’s restaurants in south and west India, has an investment plan for the chain of about 5bn rupees for the next three years.
“In India, eating out has evolved from an occasion-driven activity to an occasion in itself today,” says Amit Jatia, the vice chairman for McDonald’s India in the western and southern regions.
Fast food chains have had to adapt to the Indian market to appeal to local tastes and culture. McDonald’s, for example, does not serve beef and pork products in India and developed an eggless mayonnaise specifically for its Indian customers. Items on its menus are specifically designed to cater to the Indian palate such as the McAloo Tikki burger and the McSpicy Chicken burger. Local items on Domino’s Pizza menu include the Peppy Paneer pizza.
McDonald’s has added some 60 restaurants in the past two years and currently has 166 outlets in south and west India.
“We plan to aggressively increase our retail footprint to fortify our presence in the existing market and enter into newer markets and are looking at opening 75 to 100 new restaurants by the financial year 2015,” Mr Jatia says. “Factors propelling this buoyancy include the changing economic and demographic profiles of consumers in India,” he says, explaining that these include the growth of the middle class in India and the country’s young demographic.
“Currently more than 60 per cent of the population is aged less than 30 years,” says Mr Jatia. “They are exposed to international brands and are far more aware of global trends. Considering a large portion of McDonald’s customers are youth, this remains a key growth driver too.”
Yum! Restaurants, which has the Pizza Hut, KFC, and Taco Bell chains, has said that it plans to double its presence in India with plans to have about 1,000 restaurants in the country by 2015.
Domino’s Pizza last month opened its 600th restaurant in India.
“The India operations have emerged as one of our most important markets,” said Steven Pizziol, the Domino’s Pizza vice president for Asia Pacific. “Domino’s India operations are the second-largest single country operations today for Domino’s Pizza global franchise network,outside of the US.”
Crisil expects annual spending of each middle class household in India’s tier one cities, including Mumbai, Bangalore, and New Delhi, on fast food restaurants to increase by more than 60 per cent to 6,000 rupees over the next three years. But there is major potential in India’s smaller cities. Middle- class families in tier two cities are spending much less in fast food restaurants, on average at about 1,500 rupees last year, but that is expected to surge more than 145 per cent to about 3,700 rupees over the same period, the research shows.
“McDonald’s and Domino’s Pizza have shown over the years that the Indian consumer is comfortable with western fast food,” says Ajay D’Souza, a director of industry research at Crisil. “In value terms, pizzas, burgers and sandwiches still account for 83 per cent of the domestic quick service restaurant market. Players have found it relatively difficult to adapt Indian food into an assembly line production model. On the other hand, foreign cuisine can be served quickly, and is more amenable to the cold storage format and a centralised kitchen.”
Faaso’s, Jumbo King, and Kaati Zone are some of the biggest Indian players in the sector.
“There was a gap that we saw,” says Kallol Banerjee, the co-founder of Faaso’s, which specialises in serving Indian wraps and has 52 outlets across three cities and wants to expand in India to compete with the global chains.
But there are challenges in the industry, Mr Banerjee says. He explains that business for individual outlets had not really grown in the past month or so compared to last year, but said that could be largely because of festivals that restricted what people could eat and meant that many were eating home-cooked food with their families.
“Food inflation has been worrying,” he says, explaining some foods, such as onions, have trebled in cost. Rising petrol prices also have an impact because of its delivery business. The chain has not raised its prices for a year. “It is directly eating my gross margin.”
Crisil also warns that although there is a surge in the industry as a whole, individual stores are likely to suffer slowing growth.
“During this period, same-store-sales growth is expected to decline considerably due to intensifying competition in tier one cities, coupled with the economic slowdown,” it says.
business@thenational.ae
RIVER%20SPIRIT
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The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Bangladesh tour of Pakistan
January 24 – First T20, Lahore
January 25 – Second T20, Lahore
January 27 – Third T20, Lahore
February 7-11 – First Test, Rawalpindi
April 3 – One-off ODI, Karachi
April 5-9 – Second Test, Karachi
AVOID SCAMMERS: TIPS FROM EMIRATES NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
The National photo project
Chris Whiteoak, a photographer at The National, spent months taking some of Jacqui Allan's props around the UAE, positioning them perfectly in front of some of the country's most recognisable landmarks. He placed a pirate on Kite Beach, in front of the Burj Al Arab, the Cheshire Cat from Alice in Wonderland at the Burj Khalifa, and brought one of Allan's snails (Freddie, which represents her grandfather) to the Dubai Frame. In Abu Dhabi, a dinosaur went to Al Ain's Jebel Hafeet. And a flamingo was taken all the way to the Hatta Mountains. This special project suitably brings to life the quirky nature of Allan's prop shop (and Allan herself!).
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
FIGHT CARD
1. Featherweight 66kg
Ben Lucas (AUS) v Ibrahim Kendil (EGY)
2. Lightweight 70kg
Mohammed Kareem Aljnan (SYR) v Alphonse Besala (CMR)
3. Welterweight 77kg
Marcos Costa (BRA) v Abdelhakim Wahid (MAR)
4. Lightweight 70kg
Omar Ramadan (EGY) v Abdimitalipov Atabek (KGZ)
5. Featherweight 66kg
Ahmed Al Darmaki (UAE) v Kagimu Kigga (UGA)
6. Catchweight 85kg
Ibrahim El Sawi (EGY) v Iuri Fraga (BRA)
7. Featherweight 66kg
Yousef Al Husani (UAE) v Mohamed Allam (EGY)
8. Catchweight 73kg
Mostafa Radi (PAL) v Abdipatta Abdizhali (KGZ)
9. Featherweight 66kg
Jaures Dea (CMR) v Andre Pinheiro (BRA)
10. Catchweight 90kg
Tarek Suleiman (SYR) v Juscelino Ferreira (BRA)
FA Cup fifth round draw
Sheffield Wednesday v Manchester City
Reading/Cardiff City v Sheffield United
Chelsea v Shrewsbury Town/Liverpool
West Bromwich Albion v Newcastle United/Oxford United
Leicester City v Coventry City/Birmingham City
Northampton Town/Derby County v Manchester United
Southampton/Tottenham Hotspur v Norwich City
Portsmouth v Arsenal
THE SPECS
Jaguar F-Pace SVR
Engine: 5-litre supercharged V8
Transmission: 8-speed automatic
Power: 542bhp
Torque: 680Nm
Price: Dh465,071
Killing of Qassem Suleimani
HER%20FIRST%20PALESTINIAN
%3Cp%3EAuthor%3A%20Saeed%20Teebi%3C%2Fp%3E%0A%3Cp%3EPages%3A%20256%3C%2Fp%3E%0A%3Cp%3EPublisher%3A%C2%A0House%20of%20Anansi%20Press%3C%2Fp%3E%0A
Results
6.30pm: Dubai Millennium Stakes Group Three US$200,000 (Turf) 2,000m; Winner: Ghaiyyath, William Buick (jockey), Charlie Appleby (trainer).
7.05pm: Handicap $135,000 (T) 1,600m; Winner: Cliffs Of Capri, Tadhg O’Shea, Jamie Osborne.
7.40pm: UAE Oaks Group Three $250,000 (Dirt) 1,900m; Winner: Down On Da Bayou, Mickael Barzalona, Salem bin Ghadayer.
8.15pm: Zabeel Mile Group Two $250,000 (T) 1,600m; Winner: Zakouski, James Doyle, Charlie Appleby.
8.50pm: Meydan Sprint Group Two $250,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
if you go
The flights
Fly to Rome with Etihad (www.etihad.ae) or Emirates (www.emirates.com) from Dh2,480 return including taxes. The flight takes six hours. Fly from Rome to Trapani with Ryanair (www.ryanair.com) from Dh420 return including taxes. The flight takes one hour 10 minutes.
The hotels
The author recommends the following hotels for this itinerary. In Trapani, Ai Lumi (www.ailumi.it); in Marsala, Viacolvento (www.viacolventomarsala.it); and in Marsala Del Vallo, the Meliaresort Dimore Storiche (www.meliaresort.it).
Countries offering golden visas
UK
Innovator Founder Visa is aimed at those who can demonstrate relevant experience in business and sufficient investment funds to set up and scale up a new business in the UK. It offers permanent residence after three years.
Germany
Investing or establishing a business in Germany offers you a residence permit, which eventually leads to citizenship. The investment must meet an economic need and you have to have lived in Germany for five years to become a citizen.
Italy
The scheme is designed for foreign investors committed to making a significant contribution to the economy. Requires a minimum investment of €250,000 which can rise to €2 million.
Switzerland
Residence Programme offers residence to applicants and their families through economic contributions. The applicant must agree to pay an annual lump sum in tax.
Canada
Start-Up Visa Programme allows foreign entrepreneurs the opportunity to create a business in Canada and apply for permanent residence.
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting
