Dunkin’ Donuts to enter India with Jubilant Foodworks

Tuesday, 8 March 2011 00:02 - - {{hitsCtrl.values.hits}}

Reuters: Dunkin’ Donuts plans to launch its brand in India, partnering with fast-food operator Jubilant Foodworks Ltd, which runs the Dominos Pizza chain in the country, Jubilant’s Chief Executive Ajay Kaul said last week.

Dunkin’ Donuts, owned by private-equity firms Carlyle Group, Thomas H. Lee Partners and Bain Capital, is the latest in a series of U.S. restaurant chains to tap into the booming demand for fast food in Asia’s third-largest economy.

The Indian fast-food sector is growing at roughly 25 to 30 percent a year as an economy expanding at nearly 9 percent boosts purchasing power in the burgeoning middle class, and an aspirant younger crowd shows an affinity for global brands.

Dunkin’ Donuts, known primarily as a breakfast chain in the United States, will offer an all-day dining experience in India, the president of the company said.

“Expansion to India is an integral part of Dunkin’ Donuts international growth plan,” said Nigel Travis, adding that the company would open its first store in India early next year.

Several chains, including Domino’s Pizza, McDonald’s and YUM Brands with its KFC, Pizza Hut and Taco Bell units, have entered the Indian market in recent years, adapting their menus to the Indian palate.

“Dunkin’ provides flexibility in localizing recipes, and we have strengths in food and culinary which we intend to leverage,” Jubilant Chairman Shyam Bhartia and Co-Chairman Hari Bhartia said in a statement.

Jubilant has already adapted the menus at Dominos in India, including a vegetarian pizza called Peppy Paneer – the Indian version of cottage cheese with spicy peppers – and one called Keema Do Pyaaza, which has a topping of spiced up ground meat.

Doughnuts are a recent food trend in India, where the first doughnut chain – Mad Over Donuts – opened in 2008.

With its more extensive menu, Dunkin’ will likely compete more directly with fast food chains in India, where more than 60 percent of the population, or 700 million people, are under the age of 30 and make a prime target for fast food.

Aside from being popular for its doughnuts in the United States, Dunkin’ has seen the popularity of its coffee soar on its home turf in recent years, competing with Starbucks and McDonalds for Americans seeking a small breakfast before heading to work.

Last month, Starbucks Corp inked a deal with India’s Tata Coffee Ltd to explore opening retail stores in the country. The Seattle-based chain will likely open its first store in India in July or August.

In India, where tea has long been the beverage of choice, an increasingly affluent and urban population with westernized tastes is embracing cafes, paying much more for a cup of coffee than at traditional restaurants.

A cup of plain coffee typically costs about 10 rupees (about 22 U.S. cents) at a basic restaurant in India, compared with 50 to 60 rupees at one of the Western-style cafe chains that began sprouting up about 10 years ago.

Jubilant, which raised $71 million about a year ago in a popular initial public offering, said it plans to open 25 to 30 Dunkin’ Donut stores in three years.

Dunkin’ has more than 9,700 restaurants in 31 countries.