New Delhi: Muffin Break, an Australian bakery and cafe chain, on Thursday announced its entry into India, a market where it will have to compete with other international chains such as American doughnut makers Krispy Kreme and Dunkin’ Donuts that set shop in the country this year. Robert Fitzgerald, executive director of Foodco Group Pty Ltd, which runs the chain, said Muffin Break will have 20 stores across the country in three years.
The family-owned Foodco Group, which also owns coffee chain Jamaica Blue and dessert chain Dreamy Donuts, has 370 shops across Australia, the UK, China and other nations. Muffin Break will be licensed in India through South Asian Food and Hospitality Pvt. Ltd, which operates restaurant chains such as Subway and Nirula’s in the country.
In an interview, Fitzgerald spoke about the group’s plans for India and the changing landscape of food retail and consumer preferences in the country. Edited excerpts:
With Muffin Break, what product portfolio would you bring to India? How will the brand be positioned in India?
Our core offer here is that everything is made in our shop everyday, fresh from natural ingredients; that doesn’t change anywhere in the world. We operate in Australia, United Kingdom, New Zealand and other countries and always, that’s the basic model. But in every market, we do change the flavour range and some of the offering. So in India, for instance, we will have an extensive muffin range that reflects our global range and we’ll also be adding special mulberry flavours and a local fruit called chickoo.
India has got a really well-developed coffee sector; there are all kinds of stuff going on coffee in India, it’s already huge. You have Cafe Coffee Day (CCD), it’s huge in India but the strategy has been around mass market beverages. And we have a whole lot of new people coming into the market—Starbucks, Costa is already here, Gloria Jeans. They are what I call almost Starbucks facsimile, they all look very similar and they do the same sort of thing. CCD is a more broad market product, so its price point is much lower. A Starbucks or Gloria Jeans can’t survive on a CCD price point. Where we come in is we want to build a great environment, we have the world’s best beverages but we’re also delivering healthy, natural, made-on-set food not date-stamped. Most of our competition brings their food in everyday on a date-stamped basis.
Foodco Group also owns specialty coffee chain Jamaica Blue and dessert chain Dreamy Donuts. Are there any plans to bring those to India as well?
I would love to have both of them here. We think Jamaica Blue is a perfect product for India. Depending on what our partner’s desires are we’d like to think about bringing it to India. It should happen over the next 12 months. Jamaica Blue’s unique selling proposition is it’s a coffee shop but it’s a plated coffee shop. In America they call it “fast casual”, so you can have a plated Caesar salad or a plated meal there, it’s all made fresh in the coffee shop. So we would like to have that here, and we have just started to offer this product in Singapore.
How do you view the food and beverage retail landscape globally?
Well, it’s rapidly changing over time and I think it comes back again to what is your unique selling proposition and is it sustainable, do people value it? In Australia or New Zealand, we are still achieving fantastic same-store sales growth; our franchisees are doing very well. We are achieving same-store sales growth of 5-6% in these markets consistently. In the UK also we are achieving strong results. I think retail is doing a bit bad, but just as coffee shops have been closing in India, coffee shops have been closing all over the world. It’s not a simple recipe to make money.
Over the years, how have consumer preferences changed in your view?
I think consumer preferences have changed a lot; and I think from our perspective it’s around fresh (foods), fresh being different things in different parts of the world. So, for instance, fresh in the US means a product which is made a week ago; for us, fresh in Australia means made (at) that time. People are coming to focus more on natural style, handmade fresh products and consumer preference is increasingly becoming that.
Which other global markets are on the radar for Foodco Group for expansion?
We have an international strategy. We have what we call our home market, which is really Australia and New Zealand, and that’s a very solid business. We are really looking to extend that network into Asia.
China we entered several years ago and we have some other good work being done there. Singapore we have just entered, India we are just entering. Singapore, we think, is a pivotal local market in Asia because a lot of people like us come and go through Singapore all the time. So achieving brand profile and excellence in Singapore, and then moving to countries around it. For instance, if we wanted to set up Jamaica Blue in Thailand; it’s a great opportunity, but it is easier to get excellence in Singapore first and then look into establishing in Thailand.
India is enormous. India just by definition is an opportunity for the next two decades and is going to be our focus.
Gloria Jeans, an Australian brand that entered India some years ago, hasn’t done particularly well. What is crucial to sustain your brand in this market?
We don’t view India as a layup, which is a certain Australian word for easy, and I wouldn’t advocate coming to India with a simple coffee product. Again, I respect Gloria Jeans; but, really, what is its clear point of difference is compared to a Costa, or Starbucks or CCD’s Lounge product? What really makes them different? And I think coming to India is like a facsimile of someone else. I don’t think they were bold enough. You need to bring something different to the market and I wouldn’t bother coming unless we could offer something different. And I think our product brings something different which you’re not getting here at the moment.