{UAH} Burger King joins Everstone to open restaurants in India - VEGETARIAN, I THINK

Burger King joins Everstone to open restaurants in India

By Amy Kazmin in New Delhi

©Bloomberg

Burger King, the US-based hamburger chain, is planning to set up shop in India, joining a rush of Western fast-food companies plunging into a market seen as having huge long-term potential as a result of rapid social change.

Burger King has formed a joint venture with the Everstone Group, an Indian-owned, Singapore-based private equity and real estate group, and together the partners will develop a strategy for rolling out the restaurants across India.

Elias Diaz Sese, president of BK AsiaPac Ptd Ltd, said Burger King chose Everstone, founded in 2006 by two Indian veterans of Goldman Sachs, as its partner because of its "history, business acumen, and command of the massive and complex Indian market."

Burger King said the joint venture would work on developing the supply chain for the restaurants in the coming months, before rolling out the restaurants, though no details were given about where or when the first store might open.

Despite India's own deep-rooted culinary traditions, Western fast-food chains have been flocking to the country. A growing middle class and a youthful population, which has rising disposable incomes and is increasingly pressed for time, is seen as having a much greater appetite both to eat out and try new foods.

India's overall fast food market is valued at more than $12bn but is currently dominated by local independents making traditional Indian cuisine, while foreign brands account for about five per cent of the total market.

However, chains such Domino's Pizza, Subway, McDonald's, KFC, and Dunkin' Donuts, are all operating in the country, and the market for Western fast-food chains is expected to be worth around $1.2bn by 2016. Starbucks, the US-based coffee chain, also set up its first outlet in India a year ago, and now has 29 outlets, mostly in major cities.

Operating in India does pose major challenges for Western restaurant companies, as they try to cater to Indians' spice-loving palettes, and the high demand for diverse vegetarian options. Successful companies like Domino's have worked hard to develop special menu items – heavy on the chilli peppers – to woo Indian customers, who rejected the chains initial, global offerings as too bland.

Like its bitter rival McDonald's, the challenge will be tough for Burger King, as most Indians – whether vegetarians or not – do not eat beef, which puts the chains core product off limits.

But Everstone does bring one strong advantage to a sector where access to suitable real estate is also a major constraint to growth. The company is one of the largest developers of shopping malls and industrial warehouses in India with a presence across 17 cities, which should help Burger King beat rivals in securing choice locations.

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Gwokto La'Kitgum

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