Despite political uncertainty and policy conflicts, India is still an attractive investment destination. This influx of foreign investment is especially strong in India’s booming food and beverage sector - As incomes rise, people are prepared to spend more on eating out.
Dunkin’ Donuts’ India STRATEGY
Valued at Rs 45,000 crore and growing at an
annual rate of 25%-30%, the quick service restaurant market in India is turning into a hotspot, prompting global brands to come up with products to suit the Indian taste.
Most western restaurant chains are turning to India as sales slow in mature markets and higher-spending Indians willingly
experiment with new cuisines. These entrants are also motivated by the success of pizza chains that have invested large amounts into marketing and clockwork-efficient home delivery to find loyalists for a product that once was alien to Indian tastes as doughnuts are today.
Dunkin' Donuts, the quick service restaurant which is synonymous in the US for breakfast (coffee and donuts) has entered India with two outlets in New Delhi under the name Dunkin' Donuts & More just a few months ahead of the arrival of its global archrival, Starbucks.
Jubilant Foodworks Ltd (JFL) signed a franchise agreement with the Canton, Massachusetts-based Dunkin’ Brands Group in February 2011. The Indian company invested about 100 million rupees in setting up a manufacturing facility, a research center, and an office for the brand last year. JFL also owns and runs Dominos Pizza and plans to replicate the same model of affordability.
Dunkin’ Donuts will compete in India with
established brands such as Cafe Coffee Day, run by Amalgamated Bean Coffee Trading Co, Lavazza SpA’s Barista Coffee Co, and global giant Starbucks Corp. With coffee culture is growing in India, JFL realises that the market for donuts is still niche in India, thus the menu is not restricted to donuts and coffee and the company is branding itself as 'Dunkin’ Donuts & More.' JFL expects 60 % to 70% of Dunkin’ Donuts’ revenues to come from the sale of food products. In the US, however,
coffee is the biggest revenue earner. Dunkin Donuts’ target market in the US are blue collar workers (18-60) and kids. More recently, it has been targeting the affluent women and professionals. In India, however, the target segment is urban consumers aged up to 35 years.
Like most other Quick Service Restaurants (Pizza Hut, Domino’s, McDonalds), Dunkin Donuts too has customised its menu to cater to the Indian palate. India is the first market for Dunkin’ Donuts where everything is 100% localised. Mango and lychees being Indians’ favourite fruits have been incorporated in the menu in the form of mango donuts, milk shakes, and smoothies using the alphonso variety of mangoes. Dunkin’s signature cold drink, the ‘coolatta’, has been introduced in a lychee flavor. With the exception of breakfast options, Dunkin’ food menus globally rarely veer beyond donuts.
But in India, Dunkin’s sandwich selection is as varied as its doughnut one. They come in all sorts of shapes: bagels, ciabattas, focaccias, and even savory croissants. The sandwiches are chili heavy and include a chicken jalapeno ciabatta and a paprika salami croissant. There are plenty of vegetarian options, too, including the Jerk Cottage Cheese Ciabatta sandwich. Sandwiches are priced between Rs 80- Rs 110.
While Dunkin' is targeting Indian tastes, it is also staying clear of Indian snacks like samosas or pav bhaji. The reason Dunkin' decided to expand its food menu in India is because it felt there was a dearth of cafés that offer lunch and dinner options here.
Demand for brands such as Dunkin’
Donuts’ is being aided by a rise in the number of Indians who travel abroad. Indian consumers travelling abroad for work and leisure get exposed to brands and restaurants and want the experience that they see in other countries to be replicated in India. There is a latent demand for doughnuts too as Indians have a palate for sweet products.
• Timed it well by entering the market
before rival Starbucks.
• Launched as an ‘affordable brand’ providing value for money.
• Positioned as a ‘food café’ addressing the segment between quick service restaurants which are transactional with a limited menu and the cafes which provide an experience but are mostly focused on beverages.
• Priced its coffee 10-15% lower than local competitors.
• Target Market: Urban youth up to 35 years of age.
• Target Markets: Delhi-NCR to start with and then open stores in other metros like Mumbai, Bangalore.
• Differentiate from other coffee players by offering all-day services.
• Realising that the market for donuts is niche in India, thus it is branded as ‘Dunkin’ Donuts & More’. Offering a variety customised food products and
beverages to suit Indian tastes
• To keep a tab on costs as well as on the quality, 90% of the ingredients are being sourced locally.
• Focus on food products ; expects 60-70% of the revenues to come from it.
• Focus on digital marketing and
promotional activities within the stores.
• Leverage Domino vendors. It is also
synergising many departments like human resources, finance, IT and supply-chain operations between both the
brands to ensure profitability in store-