Burger King in talks to revive India plans

The author has posted comments on this articleSamidha Sharma & Boby Kurian, TNN | Jan 31, 2013, 05.27AM ISTMUMBAI: Fast food giant Burger King Holdings has held fresh discussions with Everstone Capital to revive its India entry plans, said people directly briefed on the matter, as global restaurant biggies relook at the domestic market. The world's second-largest burger chain behind McDonald's could firm up its India strategy later this year as it makes a big push into three Asian markets, including China and Indonesia, they added.

Everstone Capital, among the biggest India-focused private equity houses, has held talks with Burger King, but the latter has not taken a final call on its India plans yet. The NYSE-listed burger chain is exploring a franchisee model in sync with its operations globally. "In the course of normal business, we continuously review our worldwide restaurant portfolio and make strategic decisions based on many factors including development opportunities, market conditions and restaurant profitability in various countries, including India. However, we do not have any further information to provide at this time regarding the Indian market," said Burger King spokesperson Miguel Piedra. Everstone Capital declined to comment on speculation.

Burger King had held discussions with DLF and Kishore Biyani's Future Group to enter the market some years ago. Everstone Capital, founded by two Goldman Sachs bankers Sameer Sain and Atul Kapur, controls Blue Foods, which claims to be India's largest restaurant company with brands like Copper Chimney, Noodle Bar, The Coffee Bean & Tea Leaf in its portfolio.

Burger King, now controlled by private equity group 3G Partners, is not alone in renewing interest in India's food and beverage (F&B) potential. Rival burger chain Wendy's, UK's noodle chain Wagamama, another London dim sum eatery Ping Pong, European pizza and pasta bar Vapiano and Jamba Juice are among those courting Indian partners. The entry of Seattle-based coffee chain Starbucks, after years of studying the market, has revived the global interest of other brands.

Burger King, operating more than 22,000 outlets across the world, wants a fairly big entry into the market with the potential partner having to commit up to $100 million, said a second source who did not wish to be named. "There is a huge opportunity for brands like Wendy's and Burger King, considering nobody has dominance of the burger market here. It's still a lucrative market if you find the right partner and localize your business," said Arvind Singhal, chairman of Technopak Advisors, a retail consultancy firm.

MNC brands have taken a strong hold over India's robust eating out economy, riding on the broader middle-class consumption story. "Most successful Indian restaurateurs, barring Anjan Chatterjee of Specialty Restaurants, have banked on foreign tie-ups. This shows that Indian consumers now have the pocket and desire to experience 'new food'," said Siddharth Bafna, partner at Lodha & Co, an active advisor on F&B deals.

Jubilant FoodWorks (Domino's Pizza), Hardcastle Restaurants and Connaught Plaza Restaurants (McDonald's), Devyani International (Pizza Hut, Costa Coffee) and JSM Corp (Hard Rock, California Pizza Kitchen and Trader Vic's) are among the leading domestic restaurant groups that have partnered global brands to build market valuations. Yum Restaurants is possibly the only international chain to tap the Indian market directly, building a strong network of KFC and Pizza Hut outlets, again through sub-franchisees.

Source: http://timesofindia.feedsportal.com/fy/8at2Etb0jUp35408/story01.htm

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