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News

Yum turns to Mexican food for growth

on

Expects India to become one of the top markets for the cuisine

PURVITA CHATTERJEE
Mumbai, August 9

Yum Brands, which has been selling pizzas and burgers under the brands Pizza Hut and KFC, is now planning to push its Mexican fastfood format,Taco Bell, in its next phase of growth in India.

“Pizzas and burgers are al-ready well-established categories, but now Mexican food is trendingglobally . We are now going to open our ninth Taco Bell in India, expecting it to become the top 3-5 markets gloabally in the next five years,” said Ankush Tuli, Managing Director, Taco Bell India.

Considering the slowdown in the QSR (quick-service restaurant) segment due to weak consumer sentiment, Taco Bell would be cautious when it comes to expanding in expensive realestate markets such as Mumbai where it already has three outlets. Instead, it would be make more strides into afford able markets such as Bengaluru and Hyderabad and even smaller markets such as Chandigarh keeping its outlets between 1,500- 1,700 sq ft and even stocking alcohol to drive more customers at times of sluggish consumer spending.

-Unlike large categories such aspizzas and burgers, Mexican fast food remains a relatively nascent and small category in India with just a handful of players

“Today, we want to keep a fine balance in our portfolio and focus on expanding in the top 8-10 cities and not just Mumbai and Delhi to get the right unit economics and make the business model profitable. Besides, we expect tacos to be the next big thing in fast food in the next decade.,” he added.

Having entered the country in 1996, almost the same time as Mc Donald’s and Domino’s, Yum Brands has made its presence with Pizza Hut (400-plus outlets) and KFC (330 outlets), while Taco Bell came in much later in 2010.

last year, Yum restructured its business after a bail out by a new franchise partner — Sapphire Foods (with investors such as Samara Capital and Goldman Sachs). Taco Bell has Burman Hospitality as its newly appointed franchisee for the East and the South. The rest of the Taco Bell outlets continue to be company owned.

Unlike large categories such as pizzas and burgers, Mexican fast food remains a relatively nascent and small category in India with a handful of players such as Rodeo, Sancho’s and TexMex Cuisine, giving Taco Bell a chance to grow more rapidly compared with Yum’s other formats.

Serving cocktails
Taco Bell has also introduced alcohol at its stores in the past month with its QSR-`plus’ strategy which includes beer and rum-and vodka-based cocktails to emulate its alcohol serving format in the US under Cantina Bell. “With alcohol, we will have ROI as it will bring us closer to the unit economics we are seeking with our twisted freezers and beer, which will add value to our QSR-plus strategy,” Tuli added.

With its system-wide sales pegged at $9 billion, Taco Bell’s main market continues to be the US where it has bagged nearly 50 per cent of the Mexican food category. However, it has relatively less presence outside theUS com-pared with Yum’s other brands.

Along with expanding its India presence, Taco Bell will also be entering new global markets such as the Netherlands, Brazil, Australia and China.

“We will be opening our first Taco Bell store in China where we already have 4,500 KFCs and more than 1,000 Pizza Huts.”

Source :Hindu Business Line

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