According to a new research report, "Indian Pizza Market Analysis" by RNCOS, the Indian quick-service market has experienced robust growth throughout the past few years, mostly in metropolitan and tier-I cities.
Tier-II and -III cities are now also emerging as a new opportunity for chains as they largely remain underpenetrated. Adding to this opportunity is the Indian consumers' changing food consumption habits.
Factors playing into the popularity of pizza – and the quick-service segment in general – in India include increasing disposable incomes, faster lifestyles, greater exposure to various global cuisines and a favorable response from younger generations.
The RNCOS report estimates that the Indian organized pizza market will surge at a CAGR of more than 27 percent during 2012-2015. Much of that growth will come in tier II and III cities, where the educated middle class population is becoming more sophisticated with their food consumption.
There has been plenty of activity in the Indian market recently from major U.S. players. In the fall 2011, Domino's announced its plans to double its India footprint while marking the 400th store opening there. The chain's growth is in partnership with master franchisee Jubilant Foodworks Ltd.
During the company's recent earnings call, CEO Patrick Doyle said the pizza category outside of the U.S. is growing at about 5 percent.
"If you look at India, our business has been absolutely booming in India ..." he said.
Also in the fall, Yum! Brands created a separate India Division to focus on the growth of its concepts, including Pizza Hut. Shortly after, the company announced major expansion plans in India, from about 130 Pizza Hut locations to 250 by 2015. Pizza Hut is eyeing tier II and III cities specifically.
The casual dining chain has had a presence in India for 15 years. Its product offerings will be expanded as it grows throughout the country, and a nationwide marketing and advertising campaign also recently launched to complement the expansion.
Earlier this month, Papa John's master franchisee in India, Om Pizzas and Eats, named Tejpavansingh Gandhok as its new CEO. The appointment came after private equity firm TVS Shriram Growth Fund invested in Om Pizzas and Eats.
Gopal Srinivasan, of TVS Capital, said the company is "very bullish" on the growth prospects of the Papa John's brand. Currently Om Pizza has 30 Papa John's units across India.
Also, Sbarro recently signed an expansion agreement in India to open 15 units in the state of Maharashtra. Upper Crust Foods Pvt. Ltd. will develop and operate the units, with the brand making its debut in Mumbai.
"Now is a time of tremendous growth and opportunity in the region and (Upper Crust Foods executives) bring deep expertise in India's burgeoning QSR sector and a proven track record," said Jim Greco, president and CEO of Sbarro.
Photo provided by TexExample.net.
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Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.