An all-American accepts Indian palate

By Mohini Bhatnagar | 04 Jan 2002

Mumbai: Indians seem to have taken to the pizza with a gusto that has surprised many, and pizza parlours of all shapes and sizes have sprung up across the country. It is no wonder that one of the biggest of them all, the all-American Tricon Restaurants, owner of Pizza Hut, is not only sitting up and taking notice but has chalked out big expansion plans for the future.

Says Tricon Restaurants International marketing director (Indian subcontinent) Pankaj Batra: "While the focus for the present undoubtedly remains on the growth of the Pizza Hut chain of restaurants, Tricon will soon introduce the Taco Bell chain of Mexican restaurants here and focus on expanding the Kentucky Fried Chicken (KFC) chain of outlets."

At present, Tricon operates about 29 Pizza Hut outlets across 11 cities and has a single KFC restaurant, in Bangalore, in India. Among Tricons three brands, Pizza Hut has the maximum number of outlets worldwide, followed by KFC and Taco Bell Mexican food outlets. KFC caters to nearly 7 million customers in more than 78 countries through 11,338 outlets.

Tricon also operates as many as 7,111 Taco Bell worldwide, and has opened a couple of Mexican specialty restaurants in Singapore and Australia in recent years. The company believes that India, owing to its size and growing aspirations of an upwardly mobile middle class, is a critical market in its overall scheme of things.

The size of the pizza market in India is estimated at Rs 120 crore, of which Pizza Hut already has a 40-per cent share. Tricon is aiming to increase this by about 20 to 25 per cent by upping the ad budget. Tricons focus in 2002 will be to consolidate its position in the northern and western market and an ad budget of about Rs 7.5 crore has been set aside for Pizza Hut for the year. The plan is to have about 100 Pizza Hut restaurants, across 20 cities in India by 2004. These will be in a combination of standalone restaurants, malls and entertainment complexes.

The first outlet of Pizza Hut was set up in India in 1996 and the company found the going tough initially. Things eased out when Pizza Hut, similar to other fast food restaurants like McDonalds and Dominoes, started Indianising the menu. Hence, first in its history, a 100-per cent vegetarian restaurant was established in Ahmedabad, with plans for similar all-veggie ones in other cities.

But Tricon does not plan to completely Indianise its menu. Traditional American pizzas will coexist with the ones with a chicken tikka topping pizza and Indian spicy ones. Future menu offerings being planned include six kinds of Indian masala pizzas, garlic mushrooms pizzas and savoury potato wedges.

Pizza Hut currently offers varieties of pizzas and salads, carbonated beverages, tea and coffee, and bread and chicken wings as starters. The new toppings recently added include Teekha Tikka, Killer Korma and Paneer Pataka.

Tricon is also planning a gradual expansion of KFC outlets as well. This was the first Tricon brand to enter India in 1995, with outlets in Bangalore and New Delhi. A couple of years down the line, KFC quietly closed shop in New Delhi citing high real-estate costs, which were leading to unviable operations. At present, Tricon has a single KFC outlet operating in Bangalore. Plans are, however, afoot to open a second outlet in Mumbai soon.

Company sources say apart from the problem of real estate costs when Tricon launched the KFC brand initially, they had not understood the market condition well. The one area where they made the mistake was in not Indianising the theme. The menu at the time was too American, which did not jell well with traditional Indians. But now, after a successful expansion of KFC, Taco Bell will follow. The aim is to definitely have all the three brands in the country.

Food consultants say nearly all American restaurants made the same kind of mistake initially. "Even McDonalds did not do well initially. It was only when they brought in the Indian menu that their outlets started picking up. KFC restaurants will also have to bring in more Indian flavours if they want to make it big in the Indian market."

Apart from increasing its outlets in existing cities, the forthcoming months will see Pizza Hut mark its presence in fresh markets like Surat and Baroda. While Delhi, Mumbai, Chennai, Bangalore and Pune have been key performing markets, outlets in relatively smaller cities like Chandigarh and Jaipur have more than met with expectations.

Today, the Pizza Hut chain operates through four franchisees Devyani International in the north, Favorite Food India in Mumbai, Dodsal Indmag in Gujarat, Andhra Pradesh and Karnataka, and Pizzeria Pure Foods Restaurants in Tamil Nadu and the rest of Maharashtra. Tricon provides the marketing support and supply chain management.

Significantly, Tricon is talking to the coffee chain Barista and the food major Nestle for a tie-up to serve branded coffee and tea at its outlets in India. Says Batra: "The aim is to provide customers with a complete pizza meal, with coffee and tea being part of the combo. Though Pizza Hut does have coffee and tea on its menu right now, consumers prefer branded coffee and tea.

The company feels that by adding branded tea and coffee to the menu, more customers will come to its restaurants. Nestle and Barista seem to be a good choice as Barista has already become a popular coffee chain in recent months and Nestle retails its branded tea, coffee and iced tea through vending machines.

The pizza major does not have a presence in the eastern region. The company sees Kolkata and Jamshedpur as potential growth centres and plans to enter the eastern market in the next couple of years.

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