October 25, 2013

Reliance Industries to open quick service restaurant in India

Mukesh Ambani's Reliance Industries plans to open a quick service restaurant in India which will exclusively sell chicken products and the name of the restaurant is Chicken came First.

Ambani's Reliance Industries, through its subsidiary Reliance Retail, has picked up a 45% stake in 2 Sisters Food India, a subsidiary of UK-based 2 Sisters Food Group Ltd (2SFG).

The UK company, founded and owned by Ranjit Singh Boparan, is primarily a chicken products company. It supplies its products to retail, food service, and food manufacturing sectors in Europe. It is based in West Bromwich, the UK, and has facilities in the UK, Holland, and Poland.

Through Reliance Retail, 2SFG India will initially introduce Chicken came First which will start selling chilled and frozen foods under this brand. The retail of India's biggest conglomerate had signed a back-end joint venture with 2SFG India in 2012.

Chicken came First will step up the competition in organised food services market in India and directly compete with Kentucky Fried Chicken.

It is significant that Reliance's foray into the fast foods market comes at a time when an economic slowdown and resultant job cuts is forcing the Indian middle class to squeeze its discretionary spends. However, the company's interest in the segment shows its long-term potential.

The organised foods market is growing 30% annually and global brands enjoy 63% of this market.

David Novak, chairman and CEO of Yum! Brands exudes confidence that India will be a major market for the company in a few years. Yum! owns KFC, Taco Bell and Pizza Hut brands of fast food chains.

Reliance plans to invest US$100 million in India in three-four years and US$10 billion emerging markets by 2020. The company has opened its 40,000th restaurant in Goa.