Pizza, the largest food category in the organised QSR industry in India, is also the fastest growing. The latest entrant into this segment is the South African pizza brand Debonairs. Brought to India by the Parekh Group, which is in the business of shipping, logistics and hospitality, this is Debonairs’ second coming in India. The brand made its debut way back in 2003 and exited the domestic market within six months after opening a store in Gurgaon. This time, it is banking on localising its offerings and cashing in on the mature eating-out market. The Group plans to take the outlet count to seven over the next one year, and then expand into north India and tier-II cities. Nivedita Jayaram Pawar spoke to Yogesh Parekh, Director, Parekh Group
This is your first QSR venture. How did you decide on Debonairs?
The Parekh Group made a strategic call to venture into the hospitality vertical around four years ago by investing into a 5-star Resort in Goa called Alila Diwa Goa. With the success of our first venture in this field, we decided to further expand into foodservice business, considering the growth in this industry and the potential thereof.
We evaluated various models and came to a conclusion that QSR’s value-based proposition is the fastest growing segment. During our visits to South Africa, we studied Debonairs Pizza in depth and were convinced that the brand with its business model would succeed in India. Thereafter, we approached Famous Brands for a discussion on bringing the brand, and now, nine months later, we have our first store in India. Along with the central commissary, we have invested close to Rs 6 crore.
What is the business arrangement with Famous Brands?
Famous Brands is the largest food service company in South Africa and they understand the importance of food service in an emerging market perspective, that is, value-based, delicious products catered to local tastes. Their understanding of the business and food industry combined with our local area expertise seemed like the perfect marriage. We have a master franchise agreement with them, and have formed an SPV called Diwa Hospitality Pvt Ltd, which is owned by our Group.
What are your expectations from the Indian market?
The food service industry in India is slated to grow at more than 20 percent CAGR. With the Indian middle class growing and a substantial rise in the disposable income, the number of people eating out has increased over the years. This, along with the increasing brand and hygiene consciousness, gives the organised food segment a huge potential to grow.
What’s your price strategy?
Our price ranges from Rs 75 for the entry level pizzas, and goes up to Rs 725 for premium offerings. The Indian consumer is willing to pay the price provided the product gives him value for money, and our pricing strategy is aimed at offering that value to our consumers.
Most pizza giants are localising their flavours. What’s your take on this?
Localising products to match the taste is very important in an emerging market, especially for an international food offering like pizza. Debonairs has never had as many vegetarian offerings on their menu as in India. At the same time, we recognise certain core products that Debonairs offers, like margherita or chicken and mushroom, along with the fresh dough and crust which have to be made as per the brand’s standards.
How many more Debonairs’ outlets do you foresee in the near future?
Considering the significant investment that has gone into establishing the central kitchen in Mumbai, which can service over 10 restaurants within the city, we are looking at an organic growth within Mumbai in the near future, and will open 5 to 7 stores in the city. Only after we have established the brand, will we look at other cities.