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Yum goes Mexican with Taco Bell to take on street food in India

Yum goes Mexican with Taco Bell to take on street food in India
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First Published: Tue, Mar 10 2009. 10 50 PM IST

Recession-proof? Yum Restaurants’ Niren Chaudhary says the company aims to double its revenue in the next two-three years, driven by KFC
Recession-proof? Yum Restaurants’ Niren Chaudhary says the company aims to double its revenue in the next two-three years, driven by KFC
New Delhi: The US owner of the KFC and Pizza Hut restaurants, Yum Brands Inc., plans to launch its Taco Bell eateries in India to compete with street food, an official said.
Recession-proof? Yum Restaurants’ Niren Chaudhary says the company aims to double its revenue in the next two-three years, driven by KFC
“We are bringing in Taco Bell by opening two-three restaurants in Bangalore by the middle of this year,” said Niren Chaudhary, managing director of Yum Restaurants India Pvt. Ltd. “It is a very good time to get in something which is Mexican-inspired food, at street food prices. Our ambition for Taco Bell is that we want to compete with street food.”
Taco Bell, according to Chaudhary, is more affordable than McDonald’s, which has become a popular fast food chain in India. Yum has chosen India as one of the few markets where it wants to expand, given the country’s love for food, he said.
“It (Taco Bell) is the biggest contributor to the (company’s) operating profit in the US. But so far it has primarily been in the US; the company has over the last two years started thinking of taking the brand international. It’s present in Canada, Singapore, Mexico, Spain, Dubai and now finally coming to India,” Chaudhary added.
The first few outlets in the country will be company-owned and depending on the response it gets, Yum will put in place a strategy for future growth, he said. However, in order to satisfy the Indian taste buds, the food at Taco Bell will be customized to suit local demand.
“Though the basic offering will remain Mexican, we will spice up the preparations to make it appealing for the consumers here,” Chaudhary said.
Experts say the new brand could do well in India as the fast food segment in the country has not yet seen any impact of the current economic downturn. “India is a value-conscious market. Yum’s claim to offer Mexican food at street food prices could be penetration-pricing strategy to get more footfalls in the stores and make people experience the food,” Purnendu Kumar, associate vice-president at KSA Technopak, a retail consulting firm, said.
The organized fast food market in the country is currently estimated at Rs2,500 crore and growing at 20-22% each year, according to Kumar.
Prominent brands in the market include Pizza Hut and KFC by Yum, Dominos, McDonald’s, Café Coffee Day, Barista and Nirula’s, along with some Indian snacks and sweets brands such as Bikano and Haldiram’s.
Besides getting in Taco Bell, the company is also looking at expanding its business both in terms of reach and revenue.
“Today, we have more than 200 restaurants in India, about 140-odd Pizza Huts and over 45 KFCs. In case of Pizza Hut, we already have a very large base and are well penetrated. But KFC has come up only in the last six-seven years. So, we want to double the number of outlets to 400 in the next two-three years, with more focus on KFC,” Chaudhary said.
He added Yum is getting a positive response to its brands. “The goal is to double our revenues in the next two-three years driven by KFC, which has grown by 30% over the last year. Even Pizza Hut is also growing at a rate of 7-8%,” Chaudhary said, without sharing the revenue figures.
To drive the growth, Yum will open more company-owned stores in the near term. In the longer term, the split between the franchise-owned stores and company-owned outlets would be 80:20.
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First Published: Tue, Mar 10 2009. 10 50 PM IST
More Topics: Taco Bell | Street food | India | Niren Chaudhary | KFC |