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International Restaurant Chains Head to India

Bollywood Actor Zayed Khan poses with a pizza during the launch of a new product by pizza chain 'Pizza Hut' called Freshizza, at an outlet in New Delhi, India, (File)

Bollywood Actor Zayed Khan poses with a pizza during the launch of a new product by pizza chain 'Pizza Hut' called Freshizza, at an outlet in New Delhi, India, (File)

Attracted by its growing economy and huge middle class, several U.S. restaurant chains are heading to India to sell sandwiches and burgers, pancakes and sausages, coffee and ice cream. They follow in the footsteps of international fast food chains which have already established their presence here.

Brisk business

Business is brisk at a Kentucky Fried Chicken outlet in a New Delhi market as customers line up at lunchtime to place orders.

U.S. restaurant chains like KFC, Pizza Hut, and McDonald’s are cashing in on India’s growing appetite for fare being sold at western food chains - pizzas, burgers and sandwiches.

The market is driven by a country where about 700 million people are under 30, are earning larger pay packets thanks to a buoyant economy, and are quickly acquiring a taste for Western fast food and global brands.

"In our day five to six hours we always spend out of our office, so keeping lunch, making our luggage heavy, so it is better to just go outside and have food," one customer said.

"Specially, for college students it is very economical, and the crowd is very happening, because we usually find youngsters over here," another customer said.

Eating out

Yum Restaurants India runs eating outlets like Pizza Hut and KFC. Its Chief Marketing Officer, Sandeep Kataria, says dining out is catching on in a big way.

"As people do become a little bit more affluent, they are looking at places to be able to go out, have a good time, also break away from the routine of everyday eating at home. Honestly, the opportunities, the options available in India for leisure are limited. What does a typical family end up doing in India currently is to mix shopping along with a movie along with eating out. That therefore is a great opportunity for companies like us," Kataria said.

It seems business will only get bigger and better. Increasing numbers of nuclear families and hectic work schedules are also helping fast food gain popularity in a country where home-cooked meals and traditional curries have ruled the roost for decades.

The huge potential of this market has whetted the appetite of restaurant chains which are not present in India. Earlier this month, representatives of several U.S. based food chains like Denny’s Corp, Wendy’s, Pollo Tropical, and CKE Restaurants visited major cities such as Mumbai, Hyderabad and New Delhi to scout for franchise partners. Others like Starbucks and Dunkin’ Donuts are set to launch in the coming months.

They want to sell sandwiches and burgers, pancakes and sausages, coffee, crepes and ice cream in a country of 1.2 billion people.

Room for more

A senior retail consultant in New Delhi, Raghav Gupta, says there is room for more players in an industry which is growing at around 20 to 25 per cent a year.

"Because of lesser time available with people to necessarily have a functioning kitchen at home, so that is driving people to eat out more and more. As a result in India, eating out has always been driven by occasions, so people eat when there is a birthday or something to celebrate. But I think eating out which is occasion-driven is now changing to necessity-driven eating out as well," Gupta stated.

That does not mean that pleasing the Indian palate is an easy task. Many items on menus in Western countries have been knocked out by chains like McDonalds because the predominantly Hindu population does not eat beef. And insipid food is not always palatable to people who have grown up on spicy curries.

Customized menus

So the menus have been indigenized to include Indian favorites such as onions, garlic, and the Indian version of cottage cheese. Kataria of Yum Restaurants says burgers and pizzas have been customized for local tastes. "Indians do like food more spicy. The other is that a lot of Indians are vegetarians or vegetarians most of the week. And therefore our menus reflect that. A lot of the vegetarian innovation has happened in India," Kataria explained.

Many of the new restaurant chains heading to India plan to take a leaf out of outlets already in India, and adapt their cuisines to suit local tastes.

While those heading to India initially plan to set up shop in the big cities, the ones already established like McDonalds and Pizza Hut are expanding at a fast pace, by both increasing their outlets in big cities and making a foray into smaller towns.