Global pizza chains looking at India as a ‘must have’ slice

It is the second time that South Africa’s Debonairs Pizza has shut shop in India but its franchise partner is not letting go of the brand.

On the other hand, Australian pizza chain Eagle Boys is spending $1million in the Indian market to take up the store count to 350 in the next three years.

MNCs are not ready to give up on the size and potential of the ₹2,500-crore pizza category, despite growth slowing at 3-4 per cent.

“We are revamping our business model and will be back with new stores for Debonairs Pizza. The category is de-growing and saturated for almost two years but we will make attempts to re-enter the category soon,’’ says Yogendra Parekh, Director, Diwa Hospitality, the master franchise for Debonairs Pizza.

Owned by the publicly listed South Africa’s Famous Brands, which has several fast food and casual dining chains, Debonairs Pizza made its entry in 2003 and exited within six months thereafter.

A decade later it re-entered the Indian market and now it has shut its stores for the second time.

Australian chain Eagle Boys is also hopeful about the Indian pizza market. Nick Vincent, Global CEO, Eagle Boys Pizza, is ready to splurge another $1 million in the next three years, having spent $2 million in the past five years.

“We will be spending $1 million to take up the count from 18 to 350 stores in the next three years. The population of Australia is almost the same as Mumbai city and we expect India to become our largest market in three years’ time. We will invest behind the operating company in India and sign up individual franchises in states like Uttar Pradesh and West Bengal,’’ says Vincent. Eagle Boys is owned by PE fund NBC and enjoys a 12 per cent share with 225 stores in Australia.

Yum Brands, the master franchise for US chain Pizza Hut, is also roping in PE funds to buy out its existing franchise in west and south India.

Having shut down several stores and changing its business model, Pizza Hut is still excited about the potential of the great Indian middle-class.

“India is a ‘must win’ market for us as it is going to have the largest middle class by 2030 and with an urban consuming class at 300 million, it is similar to the population of US,’’ says Unnat Verma, General Manager, Pizza Hut.

Meanwhile, market leader Dominos with its 900 stores is planning to add 150 stores and 25 cities every year.

“In the past 2-3 quarters, we have witnessed flattish growth, but pizza is just 3 per cent of the food services market and there will be huge scope for organised players,” adds Harneet Singh Rajpal, VP - Marketing, Domino's Pizza India.

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