Dunkin’ to Give Donuts a Desi Dressing.

American chain to roll out donuts such as coconut rasgulla, gulab jamun & motichoor laddoo as part of its localisation drive

This festive season, Haldiram’s and Bikanervala have a completely unexpected competitor. Taking localisation of its menu to a new micro-level, American donuts and coffee chain Dunkin’ Donuts is in the process of rolling out variants of donuts like coconut rasgulla, gulab jamun and motichoor laddoo.

With its franchise owner Jubliant FoodWorks looking to drive volumes and replicate the performance of its other brand Domino’s Pizza in India, the localisation drive is a first for Dunkin’ Donuts in India.

For Dunkin’ Donuts, the world’s largest donut brand which forayed into the country early last year, the move is ambitious to say the least. Dunkin’ Donuts India president and COO Dev Amritesh says the product’s ‘flexibility’ lends itself to a high degree of customisation. “There’s a significant opportunity to customise donuts for consumers — both for those who are used to the product and those who aren’t yet familiar with donuts.” There have been examples of countries customising donut toppings in other markets from time-to-time, but Amritesh says the extent of localisation is probably the highest in India. The donuts are being rolled out in time for the Diwali season, but the fastest-moving ones will become a permanent feature on the Dunkin’ menu.

The idea may also be exported to other markets if they find acceptance, says Amritesh. Abneesh Roy from securities firm Edelweiss Securities wrote in a report last month: “We expect Jubilant FoodWorks’ valuations to remain expensive given efficient execution, sharp expansion and innovation.”

Early last year, Jubilant had inked a master franchisee alliance with Dunkin’ Donuts, an alliance that diversified its portfolio and reduced its dependence on a single brand – Domino’s. Dunkin’ Brands is the world’s fastest largest coffee and baked goods chain with a global sales of $6 billion.

Localisation is critical to MNCs operating in India especially in foods and is a rule rather than an exception. And, everyone from burger and fries chain McDonald’s to cereal maker Kellogg’s to chips firm PepsiCo Foods has been forced to localise.

The American baked foods and coffee chain currently operates five stores in India and it plans to set up 100 over the next five years, encashing the country’s rapidly growing eatingout segment.

Retail consultancy Technopak Advisors estimates the country’s eating-out market to be close to . 33,000 crore, with organised restaurant chains clocking a growth of 20-25%. The organised segment is valued at about . 8,000 crore.
But, in the April-June quarter, Jubilant FoodWorks reported same-store sales growth of 22.3%, down from 36.7% in the year-ago quarter, as consumers cut back on discretionary spends in a subdued economic environment. Jubilant FoodWorks’ other brand in India, Domino’s, is the category-leader in the pizza segment.


VC Firm Pays Rs. 21 crore for a Bite of City Vada Pav

Mumbai-based Goli Vada Pav chain to use funds for its national rollout

The humble vada pav, Maharashtra’s popular snack, is set to compete with major multinational fastfood brands, after a venture firm joined hands with two first-time entrepreneurs to help roll out a national chain of restaurants. VenturEast, a southern venture capital firm, has invested $4.7 million, or Rs.21 crore in Goli Vada Pav, a Mumbai-based ethnic food chain that sells the snack. 

The firm hopes to set up outlets across the country in an attempt to replicate the success enjoyed by Jubilant Foodworks, a franchisee for Domino’s Pizza.
Venkatesh Iyer and Shivadas Menon, founders of Goli Vada Pav, set up this firm in 2004 with an investment of Rs. 1 crore and now seek funds to expand the chain into smaller towns . “At least five investors had approached us, but we selected VenturEast because of their pedigree, approach and ability to understand our business,” said Mr Iyer.

The investment values Goli Vada Pav at about . 100 crore, he added. The funds will be used to improve managerial capabilities and also for brand building.
The company plans to set up training centres for its own staff and also those of franchisees and will also put in place audit and MIS systems, said Iyer who has 20 years of experience in corporate consultancy, franchising chain and retail chain models. His partner Menon’s expertise lies in corporate finance.

With assets of over $300 million under management, VenturEast focuses on highgrowth, small and medium enterprises and has offered financial support to over 50 projects in technology, healthcare and life sciences and other emerging sectors.

The Indian fast food market is growing at an annual rate of 25-30%, industry estimates show. Goli Vada Pav’s turnover is about Rs. 20 crore and Mr Iyer says sales could more than double by the end of 2012-13. “We would also like to make a public issue when market conditions are favourable,” he added.
Goli Vada Pav focuses on smaller towns and cities where the company sees major scope for expansion , given the limited presence of multinational food companies.

The company has grown on a franchisee model with a network of 125 outlets spread across Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. It plans to develop a network of around 500 franchisees in the next three years.
Iyer says Goli Vada Pav’s strength lies in the quality of its products that are manufactured in hygienic environments with supply chain and technology support from Vista Foods. Vista provides infrastructure and support services from its plant at Taloja in Maharashtra.

Retail Chains and Business owners beating tough times with new strategies

Tough times best to expand – pizza chain

Domino’s Pizza Enterprises Ltd has added new products to its menu as tighter household budgets help boost the fast food industry.

The new menu includes new pizzas, desserts, dips and for the first time it will be adding a pasta dish to its menu – just as its rival, Pizza Hut, did last month.

“This is a whole menu launch is more than a year’s work,” Domino’s CEO Don Meij told AAP.   Read More

Tough Times Call for New Ideas

The savviest entrepreneurs right now aren’t hunkering down. They’re rethinking their business models and hunting for new strategies based on the assumption that consumer spending won’t be rebounding to prerecession levels and that the types of products and services people want will be much different from before.

For a business owner, this can mean finding new sales channels, trying new marketing tactics and promotions, forming strategic partnerships and introducing new products that appeal to frugal shoppers. Read More

Source: AAP, WSJ.com

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