Food chains cook a spread at airports, highways

Fast food chains have made life easy for Prajna Rao, a media professional in Mumbai. Her hectic schedules leave her hardly any time to cook and so, she relies on food chains like Subway, McDonalds and Domino’s for her meals.

In what will come as good news to people like her, many more such restaurants are about to mushroom across the country. Malls, high streets and commercial areas conquered, fast food chains are now looking at highways, airports and even campuses of educational institutions and companies to expand footprints.

Slowdown or not, it’s business as usual for them.

Jaideep Ghosh, who heads the travel and leisure segment of market research firm KPMG, said, “Most of the established food and beverage retailers in the country fare well on consumer expectations. They are affordable and are trying to include the best practices in their business. For them, scalability is important as being near the right consumer is the key.”

Subway, the sandwich and salads chain, is eyeing 350 outlets by the end of this fiscal from 190 outlets now. Pizza major Domino’s has 251 outlets and is looking to add 60-65 new ones this fiscal to take its total number of outlets to 500 by FY11.

Neeraj Katoch, general manager (sales), Domino’s, said, “The pizza market is a Rs 650-crore business, growing at 15% year-on-year but we are growing over 20%.” He said the chain has tied ups with Infosys, Wipro and Amity University for their campus outlets.

Similarly, Subway has on-campus tie-ups with Infosys, educational institutes and hospitals. Institutional sales account for 15-20% of Subway’s business. “The IT sector and its long hours have created a huge demand for such joints on campuses,” Ghosh said.

Burgers giant McDonald’s is looking to add 190 outlets by 2015 at an estimated investment of Rs 570 crore. Many of these outlets would be on highways, which the company has tapped successfully in the past. Currently, McDonald’s has over 160 outlets.

Then there are airports, which, thanks to the increase in air travel, have become lucrative for food chains. Travel Food Services, a company floated by Blue Foods owner Sunil Kapur, is helping the likes of Cafe Coffee Day, McDonald’s, Domino’s, Baskin Robbins, Subway and others, set up shops at airports across the country. The company will also have its own brands — Cafeccino, Chaatwala, Spice Bazaar and Noodle Wok — at airports and is aiming at a turnover of Rs 100 crore in FY11. Later, it may even tap highways and railway stations.

Sensing the opportunity, many new players are entering the fray with offerings for the health-conscious consumer. Two months ago, Birla Kerala Vaidyashala, the Yash Birla promoted ayurveda therapy chain, launched its herbal cafe H3 in Mumbai. The company will open 25 cafes in metros over the next four years.

Gurgaon-based Horizon RHI Group’s Cocoberry, a chain that offers ‘guilt-free’ desserts, is now in Mumbai, Delhi and Hyderabad. G S Bhalla, CEO, Cocoberry, said, “We plan to open 32 Cocoberry stores by the second quarter of 2010 and reach a total of 500 stores in India, Southeast Asia and the Middle East by 2015.”

Then there is Denmark-based cafe chain Joe & The Juice, which entered India through a JV with Franchise India Holdings Ltd. Under the JV, Joe & The Juice will open 100 cafes within five years. It has invested $250,000 to open cafes in Delhi, Mumbai and Bangalore in FY09. 

Jumbo King Foods Ltd, the retailer of the ‘Indian burger’ vada pav, will add 200 stores in Mumbai over the next two years, said its managing director Dheeraj Gupta. Currently, it has 52 stores in Mumbai and Gujarat.

Little wonder then that the Rs 25,000 crore foods and beverage industry is growing at 24% year on year.