BRIGHT IDEAS
||
INDUSTRY
places would “humiliate” India.
McDonald’s has responded to such
criticisms by pointing out that it has long
worked to cater to local tastes: Germans
can order McBeer, Hong Kong branches
offer rice burgers, there are salmonMcLaks
in fish-loving Norway, and so forth.
For all of the grumbling over the
McDonald’s outlets in Katra and Amritsar,
India and its 1.2 billion
people represent a
mouthwatering oppor-
tunity for the company.
While the U.S. fast-food
sector is growing at a
respectable 4 percent
annually, India’s is
growing at a whop-
ping 30 to 35 percent a
year, as the country’s
ascendant middle class
hits the food courts
en masse. Researcher
RNCOS reckons the
market could be worth
146
billion rupees ($2.7 billion) within 18
months, up from 47 billion rupees in 2010.
All-vegetarian restaurants are far from
being the first McDonald’s foray into
the Indian fast-food arena. Since arriving
here in 1996, the company has opened
upward of 270 outlets in the country. The
chicken Maharaja Mac is now a familiar
part of the culinary landscape, while
the McAloo Tikki, a bargain at 28 rupees
(50
cents), accounts for a quarter of the
burger chain’s sales in India.
That said, India is one of the few places
where McDonald’s is relatively small-fry,
outflanked and outnumbered by its more
aggressive rivals. The Keema Do Pyaaza,
a pizza topped with minced goat, has
helped make Domino’s the leading fast-
food brand in India, with more than 500
outlets do ing the country. Yum!, which
owns Taco Bell, KFC and Pizza Hut, has
about 480. By comparison, McDonald’s
looks like a mom-and-pop operation
(
which, inmany of its outlets, it actually is).
There are plans, though, for aggres-
sive expansion. McDonald’s has stated
its intent to have as many as 500 outlets
operating here by 2015, and in the past
few months it’s been laying the ground-
work, identifying sites in new malls and
expanding its production capacity. A
state-of-the-art bun plant has just been
built near Mumbai. A new pa y plant has
materialized in North India. New dishes
have been added to regional menus, each
with a vegetarian option.
Its rivals are not expected to surrender
their dominance easily. Last fall, Yum!
announced it would spend $100 million
to add 500 new Taco Bells, KFCs and
Pizza Huts to its India portfolio. Dunkin’
Donuts and Subway are expanding their
operations. Starbucks recently opened its
first outlet in Mumbai.
Denny’s, Applebee’s and
Johnny Rockets are all
on the on-ramp.
Local outfits, too, are
preparing to do battle.
Mumbai-based Jumbo
K i ng , pu r ve yo r o f
vada pav
(
spicy, deep-
fried mashed potato
on a bun), has said it
will expand from 43
outlets to nearly 300
this year. Kaati Zone,
a Banga l o r e - ba s ed
chain specializing in
fried flatbread filled with chicken or
vegetables, is in the process of growing
from 17 eateries to close to 100. And there’s
a raft of smaller companies set to take
their place alongside U.S. brands in Indian
food courts.
There is an irony emerging here. Forced
to beef up their operations in order to
compete with the American fast-food
brands flooding the market, Indian
companies have gone on an investment
binge. The influx of foreign and local
capital, according to many industry
analysts, could result in Indian fast-food
companies looking abroad in the pursuit
of further growth. Even now there are
Indian chains operating in Austria, the
Czech Republic, Poland and Sunnyvale,
Calif., among other places.
The likes of Jumbo King and Kaati
Zone gaining a foothold in America
would not be a welcome development for
U.S. fast-food companies already claim-
ing smaller and smaller portions of the
market. For the casual observer, though,
there is an agreeable symmetry to the
idea that we may one day find ourselves
at a roadside fast-food joint in Duluth,
Minn., being asked, “You want
pani puri
with that?”
BOYD FARROW,
a London-based editor and
writer, has a hankering for a Maharaja Mac.
62
FEBRUARY 2013
•
HEMISPHERESMAGAZINE.COM
Forced to
beef up their
operations to
compete with
U.S. fast-food
brands, Indian
companies
have gone on a
spending spree.
“
WEST VIRGINIA’S
central location,
good labor force and
low energy costs are
KEY ADVANTAGES.
”
Ryuichi Sakamoto, president
NIPPON TUNGSTEN USA, INC.
Barboursville, W.Va.
Nippon Tungsten USA Inc.
operates a successful global
aftercare business serving
the Western Hemisphere from
scenic West Virginia.
The specialized, high-tech
manufacturer refurbishes
the precision tungsten carbide
blades used in its Japanese
parent company’s equipment.
In 2010, Nippon Tungsten
chose West Virginia for its
North American operations
and in two years, the company
is reaching new markets in
Canada, Mexico, Argentina,
Chile and Brazil and hiring
more bilingual team members.
