PepsiCo gets boost from Salty snack sales

US-based Burger King has reported a 66% increase in sales in India in the year to March 2019. The burger chain also significantly narrowed its losses. The development comes on the back of aggressive expansion, entry-level pricing and largest vegetarian menu within global quick service restaurant chains.

In FY18-19, the QSR chain posted sales of Rs 644 crore while its losses reduced to Rs 16 crore. It forayed into the Indian market in 2014.

India has been the fastest growing market for Burger King in terms of store expansion. Last fiscal, the QSR chain added about 58 stores, taking the store count to 187.

Rajeev Varma, CEO, Burger King India, said, “Even before we started the first restaurant, we were clear that Burger King’s offerings need to be truly Indian. Our menu width means we are able to offer burgers that cater to the Indian palate and attract customers looking for everyday value.”

“In the last five years, we have focused on a strong expansion plan through strategic investment in brand building and national supply chain development and operational efficiencies,” he added.

Want to invest in a QSR franchise? Visit Franchise India 2019, Asia’s Biggest Franchise & Retail Show, and give wings to your entrepreneurial dreams.

Tata Starbucks has reported that its sales grew by 30% in FY19. This has been achieved on the back of the addition of new outlets as demand for quality beverages increased in Indian metro cities.

Tata Starbucks, a joint venture between the Tata Group and Starbucks, posted sales of Rs 346 crore in FY18. It had garnered revenue of about Rs 450 crore during the last fiscal.

Last year, the Seattle-based coffee chain added about 30 stores. Now, it has a store count of 146. Tata Starbucks unveiled 15 cafes just last quarter.

Started operations in India in October 2012, Starbucks recorded the fastest store expansion in the company’s history in the initial few years.

Himanshu Nayyar and Poorvi Khandelwal, Analysts at Systematix Investments, said, “The strong double-digit growth in the Tata Starbucks JV should remain driven by the improved in-store performance with 25% store-level margins and new store rollout of about 40 additions annually.”

Seagram's 100 Pipers, blended scotch whisky of French spirits giant Pernod Ricard, has touched 1 million cases in sales for 2018. This is the first ever scotch whisky brand in the country to reach the milestone.

The brand became part of Pernod Ricard India's portfolio after its acquisition of the Seagram India business in 2001. It has been growing at a compounded annual growth rate (CAGR) of 20%, helped by changing demographics and higher consumer spending power.

Kartik Mohindra, Chief Marketing Officer, Pernod Ricard India, said, "Consumers are gravitating towards global brands and there is an increased premiumisation in the spirits category. The scotch segment is still an urban phenomenon, but we are getting customers in smaller towns as well, which is boosting growth. We are hopeful of doubling sales in this brand in the next five years."

The owner of fast food chains KFC, Pizza Hut and Taco Bell, Yum! Brands Inc has posted a strong double-digit sales growth in revenues in India in the fourth quarter ending December and in the full year of 2018.

KFC India posted a 20% system sales growth in 2018 while recording a 17% system sales growth in the fourth quarter ended December 31, 2018.

Samir Menon, Managing Director, KFC India, said, "The quarter ending December, marked the ninth consecutive quarter of positive system sales growth, with a 17 per cent system sales growth for India and area countries."

"The year gone by has been significant for KFC India with major developments on the brand and business front. Making KFC more accessible to consumers was a prime objective through the year- we kept our focus on everyday value, delivery and expanding our physical footprint across the country with new restaurants. We are confident of riding this positive momentum into 2019 and will continue to strengthen the brand through operational excellence and distinctive communication," he added.

Pizza Hut reported a system sales growth of 14% in the fourth quarter. The pizza chain has been consistently posting double-digit growth.

ITC's instant noodle brand YiPPee has crossed the Rs 1,000 crore sales mark in the year ended September. In noodles segment, Yippee is the second largest brand with about 22% market share.

Aashirvaad, ITC's largest brand, has garnered consumer sales of Rs 5,000 crore, further consolidating its position as one of the biggest brands in India's packaged foods segment. 

Hemant Malik, Divisional Chief Executive (foods), ITC, said, "There were certain packs where we were under-indexed, such as large family packs. So we changed our strategy to focus on supply chain, promotion and distribution of these large packs and that segment is now growing for us."

"It's become a Rs 1,000 crore brand. When we got into space, there was one very large competitor and it was very important for us to innovate and offer a differentiated product in the market. After seven-and-a-half years now, we have more than 22% market share led by innovations like round, long and non-sticky noodles sold along with vegetables in sachet," he added.

Quick-service restaurant chain Burger King has registered more sales than Starbucks in FY18. The company's sales were boosted by aggressive stores expansion, attractive entry-level pricing, and a more comprehensive vegetarian menu.

The burger chain came to India in 2014. It reported a 66% jump in its revenue at Rs 389 crore in FY18. While Starbucks that entered India in 2012 grew 28% in sales at Rs 348 crore.

Rajeev Varman, CEO, Burger King India, said, "Burger King India witnessed double-digit same-store sales and traffic growth, while continuing to open new restaurants at a rapid pace, exceeding all players. We continue to be on plan, as well as profitable at a restaurant level. We have increased our investments in growing brand awareness, sharpening our menu and value offerings and building the infrastructure in India, as we progress to launch over 500 restaurants by FY23."

Food group Nestle is looking to grow its sales by around 3% in 2018. The company's plan came after strong trading in North America and China pushed up underlying sales in the third quarter.

The maker of KitKat chocolate bars and Nescafe instant coffee said, "We are starting to see improved momentum in North America and in our infant nutrition category globally. Our business in China continued to grow at a mid-single-digit pace."

Nestle offers products like baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.

The soaring mercury this summer was not been able to check the steep fall in beer sales in the state.

As per the date available with the excise department, beer sales started plummeting in December 2017, and they never recovered. The summer — usually a “high-sales” season for beer — saw the figures dropping further. In comparison to sales during the same time last year, March 2018 recorded a 16% drop in beer sales, while February 2018 lagged behind February 2017 by 13%.

Sales had picked up in the city right after the highway liquor ban was lifted last year. However, soon after, they went into a nosedive. Sources in the liquor industry said the lifting of the ban was followed by a massive excise duty hike, which pushed beer sales to rock-bottom.

No new liquor company is currently willing to enter the Maharashtra market due to the continuous hikes in excise duties and archaic liquor laws, revealed a city-based retailer. “Earlier, Maharashtra used to account for nearly 40% of the revenue of a company with a national presence. That is no longer the case. Because of higher duties, the companies cannot sell their products at prices below a particular point. So there is no revenue generation. Production cost is also on the higher side and there are also these archaic rules pulling the industry down,” he said.

Another retailer said, “There has been a massive drop in sales at our store. Beer has become so expensive that people can no longer get the same kind of satisfaction. Customers have to pay anywhere between Rs 160 and Rs 200 for a 650ml bottle of beer. Just three years ago, it used to cost between Rs 100 and Rs 120. The prices went up in November last year due to excise duty revision. But at that time, not many felt the pinch because the shops then had just reopened after the liquor ban. Also, it was winter — a lean period for beer sales. However, even during the summer months, the sales continued to drop,” he said, adding that beer companies too have begun complaining about this.

That the customers have not taken the price hike was endorsed by another retailer. “The last excise duty hike did not go down well with the customers. Those who drink at resto-bars and permit rooms can still absorb such exorbitant hikes, but customers who buy their liquor to drink at home cannot afford to do so. The very reason they drink at home is that it is more economical,” he said.

The retailer added that after the hike, one can of a popular beer brand now costs Rs 161. Earlier, it sold for Rs 140. “Why would any customer pay an extra Rs 21 for something as small as a can of beer? Light beer drinkers now refrain from drinking, while strong drinkers have now switched to Indian Made Foreign Liquor (IMFL),” he said.

Jubilant FoodWorks, which operates Dominos Pizza and Dunkin Donuts chains in India, has reported strong financial results for the first quarter ended 30June, 2017.

Operating revenues for Q1 FY18 came in at Rs 6788 million, up 11.5% over Q1 FY17. This was driven by a robust Same Store Sales growth of 6.5% in Domino’s Pizza, the highest since Q1 FY16. Overall Profitability also saw significant improvement with EBITDA for Q1 FY18 increasing by 38% to Rs 796 million. The Q1 FY18 EBITDA margin at 11.7% was the highest in the last 8 quarters.

The Profit after Tax in Q1 FY18 stood at Rs 238 million, an increase of 26% over the corresponding period last year. PAT also reflects the adverse impact of Rs 90 million on account of restaurants closure. PAT Margins at 3.5% were the highest since Q1 FY17.

Shyam S. Bhartia, Chairman and Hari S. Bhartia, Co-Chairman, Jubilant FoodWorks Limited said, "We are happy to report a strong, all-round Q1 FY18 performance. We took a number of actions in the quarter towards driving innovation, delivering value and controlling costs, and we are pleased to see that our disciplined focus on driving profitable growth has begun having the desired impact. The performance strengthens our confidence in the underlying growth potential of our brands and the ability of our business model to unleash it."

Pratik Pota, CEO & Whole time Director, Jubilant FoodWorks Limited said, "At the beginning of the quarter, we had unveiled our new strategy for driving profitable growth. Today I am pleased to share encouraging progress in the execution of the strategy as reflected in our strong Q1FY18 performance. Our focus on delivering better Value for money and driving innovation has helped bring back strong growth in Domino’s Pizza. We have also made significant progress towards reducing losses and building a sustainable business in Dunkin’ Donuts. Additionally, our discipline of controlling costs and driving efficiencies has helped improve overall operating margins. Going forward, we will continue to drive the strategic pillars of Product and Innovation, Value, Customer Experience, Technology and Cost Efficiencies."

Dairy brand, Amul has reduced prices of cottage cheese, dairy whitener and baby food, increased the price of ghee and left cheese, butter and ice cream unchanged after the roll-out of Goods and Services Tax regime on Saturday.

Producers of pickles, jam, tomato ketchup, however, complained that GST had raised the taxation level and said sales had slumped after the onset of the new regime, while sellers of branded rice and wheat flour said their distributors had issues with the new system.

RS Sodhi, Managing Director, Amul said that implementation of GST had been normal.

He said, "We don’t expect any major change in revenue with implementation of GST. The consumer gets to gain. As there was substantial increase in tax for ghee we have increased prices by Rs 25-30 a kg. Cheese, butter and ice cream prices have not been changed as increase was marginal. However, we reduced prices of milk products which came under a lower slab by 5% like dairy whitener, paneer, baby food and cream."

Nitin Seth, MD, GD Foods, the maker of Tops brand of food products, said, "There was a slump in demand on the first day with modern retail stores -Kendriya Bhandar, Easy Day and others not doing the billing as systems were being updated for GST, and they were only selling essential commodities with manual billing. Everyone is trying to understand how things will work. We have not increased retail prices yet."

Rakesh Jain of Rajdhani Group said that they have increased wheat flour (atta) prices by 5%.

He said, "Implementation is a challenge as 90% of bulk packing of 50 kg is being sold unbranded. No one (distributor or retailer) is buying as of now. The other challenge is that retailers have not registered for GST."

Priyanka Mittal, Director, KRBL, which owns India Gate basmati, said that the company was GST ready.

She said, "The shocker is distributors have not placed orders as they expect GST on branded basmati to be reversed from 5% to zero."