As burgers fly, McDonald’s to add bun, patty lines

Fifteen  years after setting up shop in India, McDonald’s is planning to set up bakeries for buns and processing units for vegetable patties as gorgers increase exponentially.

An ever-enlarging menu, increased investments in supply chain and doubling the number of restaurants … one of the largest food chains in the world is pulling out all stops to cast its net wider.

Amit Jatia, vice chairman, McDonald’s India (Hardcastle Restaurants) said a new processing facility has just been commissioned in Andhra Pradesh by Vista Processed foods, its supplier for chicken and vegetable range of products, while another one will be set up in north by July-August.

The company is also setting up a new bakery for fresh buns near Mumbai, which will pump up capacities five times, Jatia said. Currently, McDonald’s has two bakeries, one each in Noida near Delhi and Taloja near Mumbai, operated by Mrs Bector’s.

These units would entail an investment of Rs100 crore, he said.

In India, McDonald’s works under two joint venture partners — the Vikram Bakshi-led Connaught Plaza Restaurants for north and east, and Jatia’s Hardcastle Restaurants for west and south. Collectively, they operate 270 stores.

In 2010, McDonald’s appointed Jatia’s firm as development licensee, a progression from joint venture partnership which gave it local ownership and freedom to expand more aggressively. Last year, the chain announced an investment of Rs500 crore for the next three years.

Even as burger remains the prime product for the chain, wraps, desserts, breakfast items such as muffins and hash browns are also in demand as Indian consumers start to eat out more than 3-4 times a week.

Last year, the chain launched McSpicy and McFlurry. In January, it
introduced value meal priced at Rs55 and sold during lunch hours, to encourage consumers to eat out in times of high food inflation.

This month, it is rolling out four new products under Spice Fest.
The US-based McDonald’s Corporation operates over 33, 000 outlets globally with sales of $27 billion.

In India, the quick-service restaurants, or the so-called QSR sector, is on fire, generating interest from investors.

Jatia, whose firm is debt-free but does not share financial details, said he is constantly in talks with multiple interested parties but did not intend to sell a stake.

He said the potential for the quick-service food chain to grow number of outlets today is 5 times more than seen a decade ago as Indian consumers eat out frequently and as the market for food chains expands with competitors expanding rapidly.

McDonald’s will have a total of 450-500 operational restaurants in India by 2014, of which, Hardcastle will be at 250 restaurants, up from 135 currently. Last week, McDonald’s said it would hire over 6, 500 employees within the first week of April 2012 as the number of outlets nearly double.

Last year, McDonald’s also started revamping its restaurants in India with new design and layout, a move on part of the chain’s global endeavour to renovate restaurants and bring in more consumers.