Viveat Susan Pinto, Financial Express
June 5, 2023

A lot has happened at the Cafe Coffee Day (CCD) since its founder VG Siddhartha tragically passed away on July 29, 2019. Once India’s largest cafe chain, with a peak store count of 1,752 outlets in FY19, the company, part of Coffee Day Enterprises (CDEL), has now slashed its footprint by over two-thirds to 469 outlets in FY23, its latest results show.

The need to manage group debt and ensure that the business is profitable, say experts, has led to CCD shuttering stores over the last few years. The company was not immediately available for comment.

This has come even as the Rs 5,000-crore domestic coffee retail market is booming, with chains such as Starbucks and Tim Hortons announcing plans to ramp up store count over the next few years.

Consider this: Tata Starbucks, part of Tata Consumer Products, said in its Q4 investor presentation recently that it would introduce learnings from a pilot it ran in 2022, where the focus would be on introducing familiar and more beverage options, a new ‘Picco’ size (which is a smaller size) in beverages, a revamped food menu and more inviting store interiors. All of this was expected to aid sales growth and also help it get into newer markets, the company said of its future growth plans.

Tarun Jain, chief executive officer of Time Hortons India, meanwhile, said that the company was targeting 120 stores in the next three years and on its radar were metros as well as mini metros and satellite cities.

“The out-of-home market is booming after Covid-19 restrictions were lifted last year. And we are seeing this uptick in our stores,” Jain said of the response to Tim Hortons’ cafes in India, which were first launched in August last year. There are over 15 Tim Hortons cafes in the country across Delhi-NCR, parts of Punjab such as Chandigarh and Ludhiana and Mumbai. Starbucks has 333 cafes in 41 cities so far. “While the coffee retail market is growing, in CCD’s case the need to downsize has to do with internal issues. Sometimes a smaller footprint just helps to manage operations better especially when you are dealing with larger problems such as a debt overhang,” says Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight.

Revenue from CDEL’s coffee retail business, which includes the CCD chain, wasRs 1,653 crore in FY19, which was down to Rs 869 crore in FY23. When compared to FY22, however, the revenue from this business has jumped by 75% in FY23, contributing as much as 94% to group turnover for the year. In FY22, the contribution of the coffee retail business to group turnover was 85%, its results showed. Losses in FY23 have narrowed to Rs 68 crore from Rs 112 crore in FY22. In FY19, the company had a net profit of Rs 10 crore.

Apart from cafes, CCD also has kiosks and vending machines installed in corporate offices, institutions and business hubs. While the number of kiosks has fallen over the last few years and is estimated at 250 now from a peak of 537 in FY19, the number of vending machines are growing after briefly slowing down over the last few years. From a peak of 58,697 crore in FY20, it is now close to 50,000 in number, the company’s latest results show. Group debt too, which stood at Rs 7,214 crore in FY19, is down by over two-thirds to Rs 1,711 crore as on March 31, 2023.

CDEL has over the last few years cut debt by selling assets, experts tracking the market said. Asset sales have included offloading a tech park in Bengaluru to private equity firm Blackstone for Rs 2,700 crore as well as selling off CDEL’s stake in tech firm Mindtree (which has now merged with L&T Infotech) for Rs 1,800 crore. CDEL still has around Rs 1,028 crore of dues to be recovered from Mysore Amalgamated Coffee Estates, a promoter entity, which owed around Rs 2,700 crore to the company five years ago.

(Published in Financial Express)

Written By Ratna Bhushan

Large restaurants have increased the amount of discounts and promotional offers by 15-20% on their own apps compared with those offered by aggregators Swiggy and Zomato, to offset steep commissions and search optimisation fees being charged by the aggregators and reduce the dependence on them, industry executives said.

India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.

While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.

Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.

For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.

“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.

Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost.

“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services and menu customisation.

“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.

In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.

Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”

For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.

In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based meal services and menu customisation.

Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.

According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.

India’s largest quick service chain, Domino’s Pizza which operates 1,625 outlets, launched multiple “free rewards offers” on its own app last weekend, across delivery, takeaway and dine-ins.

While Zomato and Swiggy charge commissions of 15-30% on every order, new tech platforms like ThriveNow and Google-backed DotPe levy only 3-5%. These food tech platforms allow restaurants to set up their own digital services.

“We’ve grown 40% this quarter over the previous quarter, enabling restaurants to set up their own direct ordering platform; we expect to see further escalation in demand in the upcoming festive season,” said Dhruv Dewan, cofounder at Hashtag Loyalty, which operates ThriveNow.

Jubilant Foodworks, the master franchise for Domino’s Pizza in India, had acquired a 35% stake Hashtag Loyalty late last year.

Thrive charges a 5% commission and is working to increase its scale from 11,300 restaurants at present, Dewan said.

Domino’s, McDonald’s, Social, Punjab Grill, deGustibus Hospitality, Street Foods of India, Wow!Momo and Pizza Hut are among the ones offering higher discounts on their own apps.

For large brands, orders from their own apps are averaging anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.

“Our focus is to increase promotions and give more value through our own delivery platforms to entice customers to transact and reduce dependence on more expensive aggregators,” said Rohit Aggarwal, director at Lite Bite Foods, which operates Punjab Grill, Artful Baker and YouMee. He said close to 20% of the company’s delivery business was now through its own platforms.

Executives said the relationship between restaurants and aggregators involved both a huge benefit and cost. “ .

“There’s the inherent benefit which restaurants reap from the aggregators in terms of scale and last-mile delivery, specially for the mid-sized restaurants which don’t have the budgets to set up their own deliveries. But the restaurants are also dealing with the very steep cost of commissions,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

Some brands that offer direct deliveries are also focusing on the nascent but emerging subscription-based meal services .

“It is extremely important for restaurants to take back some control of their digital landscape, rather than being totally dependent on the aggregators. This will not only save them huge delivery costs but also give them access to more customer data; aggregators have thrived on discounts, which is funded almost entirely by the restaurants,” said Anurag Katriar, chief executive of Indigo Hospitality.

In addition to third-party delivery operators such as Dunzo and Shadowfax, which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet.

Riyaaz Amlani, chief executive at Impresario Handmade Restaurants, which runs Social, Smoke House Deli and Salt Water Cafe, said: “We are offering the best price on our own platforms and our discounts are in the range of 20-25%.”

For large brands, orders from their own apps are anywhere between 10% and 25%, though smaller ones are still relying heavily on the aggregators for scale, executives said.

In addition to third-party delivery operators such as Dunzo or Shadowfax which work either through logistics aggregators or directly with the restaurants, brands are also delivering through their own fleet. Some that offer direct deliveries said they were also focusing on the nascent but emerging subscription-based me .

Mid last year, over a dozen large restaurant chains had collaborated to start a #OrderDirect movement, amid escalation of a long-standing tussle between restaurants and aggregators. The food services chains alleged that aggregators charged steep commissions and masked critical customer data.

According to estimates by the National Restaurant Association of India, the annual food services market in India is of about Rs 4.2 lakh crore and could grow to Rs 7.7 lakh crore by 2025.

Source: economictimes

Written By Aditya Kalra & Abhirup Roy

MUMBAI, June 30 (Reuters) – Reliance Industries (RELI.NS) said on Thursday it would open outlets of Pret A Manger in India under a franchise deal with the British sandwich and coffee chain, a first foray by the Indian firm in the country’s growing food and beverage industry.

Reliance Brands Ltd (RBL), a unit of the conglomerate that also runs India’s biggest retail chain, would start by opening branches of Pret, as the brand is known in Britain, in big Indian cities, both companies said.

RBL Chief Executive Darshan Mehta said in joint statement the partnership was “rooted in the strong growth potential” of the Pret brand, known for its organic coffee and upmarket sandwiches, and the Indian food and beverage industry.

The first outlet would open in Mumbai before March 2023 and India was expected to become one of Pret’s top three markets in three years, a source familiar with the matter told Reuters.

Pret A Manger, whose name means “ready to eat” in French, first opened in London in 1986. It now has 550 outlets globally, including in the United States and several European states. It is owned by investment group JAB and founder Sinclair Beecham.

In India, the brand will compete with Starbucks (SBUX.O), which has a joint venture with India’s Tata, and Costa Coffee, which is owned by Coca-Cola (KO.N).

Mukesh Ambani, one India’s richest men, runs Reliance, which has more than 2,000 supermarkets and grocery stores in India. Reliance also has partnerships with luxury brands, such as Burberry and Jimmy Choo.

“Reliance wants to look at retail in all its shapes and forms. Over time, they’ve realised partnerships are the way for business formats that may be difficult or slower to crack,” said Devangshu Dutta, head of retail consultancy firm Third Eyesight.

Source: reuters

Written By Devika Singh

The entry of Jubilant FoodWorks will intensify competition in the fried chicken segment, where KFC so far has maintained its stronghold.

Popeyes, founded in 1972 in New Orleans, Louisiana, has over 3,400 restaurants in over 25 countries around the world. Popeyes (Wikimedia Commons)

Jubilant FoodWorks, the franchisee for Domino’s Pizza, will launch the iconic US-based fried chicken brand Popeyes, known for spicy New Orleans-style fried chicken and chicken sandwiches, in India on January 19 with the unveiling of the first outlet in Bengaluru.

“Popeyes was founded in 1972 and has been one of America’s most popular and fastest-growing chicken brands. Popeyes aims to delight Indian guests with the bold and delicious flavours of its Louisiana-style chicken,” the company said in a filing to stock exchanges.

“The success of the brand lies in its traditional and unique technique of hand breading, battering, and marinating its fresh chicken for 12 hours in bold Cajun seasonings,” the company added.

Popeyes runs over 3,400 restaurants in 25 countries.

With the entry of Jubilant FoodWorks, the competition is set to intensify in the fried chicken segment, where KFC has maintained leadership in the country so far.

“KFC has enjoyed a free run in the fried chicken market. There are some local players in this segment but no large QSR (quick service restaurant) player had a presence in it until now. With Popeyes as a competitor, now Jubilant FoodWorks is stepping into that opportunity,” said Devangshu Dutta, chief executive at consulting firm Third Eyesight.

While launching its initial public offering (IPO) last year, Devyani International, the largest franchisee of Yum! Brands (which owns KFC), had stressed the advantage it has over other QSRs in the country.

“We have no competition for KFC in India,” Ravi Kant Jaipuria, chairman, Devyani International, had said at the time. Devyani International runs 284 KFC India stores across 107 cities and the brand contributes more than half of its revenues. Sapphire Foods, which too launched its IPO last year, is another major franchise for KFC in India.

Both the companies already compete with Jubilant FoodWorks in the pizza segment as they also operate Yum! Brands-owned Pizza Hut in India. Jubilant FoodWorks with Domino’s Pizza, however, has clear leadership in the pizza market. Sample this: Pizza Hut currently has 500 stores in India, of which 317 are run by Devyani International; Jubilant FoodWorks, on the other hand, already has 1,335 outlets of Domino’s Pizza in India.

Now with the launch of Popeyes, Jubilant FoodWorks, it seems, wants a chunk of the fried chicken pie too.

Westlife Development, which holds the master franchise for McDonald’s in southern and western India, also has set its sight on the fried chicken segment in India. In an interview with Moneycontrol in September last year, Smita Jatia, managing director of Westlife Development, shared an ambitious plan to become a market leader in the segment. The company has already introduced fried chicken in its 125 stores in South India and plans to soon launch the food item in the western region too.

Clearly, the fried chicken market is certainly headed for interesting times as several new QSR players vie for a share of it. According to experts, the segment also offers the next avenue for growth for QSR players. “While fried chicken was the first to take off in Southeast Asia, in India, pizza and burgers found takers given the preference towards wheat-based cuisine in some parts of the country,” said Rajat Tuli, partner at global management consulting firm Kearney.

“However, as Indians become more experimental with food and trying out different cuisines, the fried chicken segment offers the next arena for growth to QSR companies,” he added.

Tuli also believes that the segment has enough space for a couple of players. “The QSR space is poised for over 20 percent growth in the next five-six years and hence there is enough headroom for multiple players to grow in it,” he said.

‘Veg options and no MSG’

The Popeyes India menu will feature the signature Cajun-flavoured Chicken Sandwich and Popeyes signature Chicken in Classic and Spicy flavours. The Indian menu will also feature an array of vegetarian options and will also have rice bowls and wraps. The entire India menu has no flavour enhancer monosodium glutamate (MSG), and the chicken is antibiotic-free, said Jubilant FoodWorks.

In a statement, Shyam S. Bhartia, chairman, and Hari S. Bhartia, co-chairman, Jubilant FoodWorks, said, “We are excited to introduce the Popeyes Louisiana Kitchen brand to chicken-loving Indian consumers. We are confident that Popeyes will not only delight guests but also strategically complement our portfolio and fortify JFL’s leadership in the QSR domain.”

Popeyes will start with its flagship store in Bengaluru’s Koramangala on January 19, followed by stores in New BEL Road and Kammanahalli soon thereafter. The brand will have its own app (Android and iOS) and mobile website.

To ensure a smooth and seamless delivery experience, Jubilant FoodWorks has built its in-house delivery fleet with e-bikes to enable zero-emission delivery. The company is also taking precautions given the pandemic situation.

“Safety protocols like daily temperature screening for all employees and frequent sanitisation of the restaurant are being implemented and frequent sanitisation of bikes will be conducted. All delivery riders will be compulsorily wearing face masks and gloves while following the frequent hand sanitisation protocol,” it added.

Source: moneycontrol

Indian retailers welcoming customers back as stores are opening up – a look at what changes are in store.