burger king: Burger King owner bets big on growing Indian middle class

Growth of India’s retail story and new airports, railways stations, malls and high streets are complementing sectors such as dining out, said Joshua Kobza, global chief executive of US-based Restaurant Brands International that owns Burger King, Tim Hortons, Popeyes and Firehouse Subs.

“We are working on growing businesses all over the world, but India is one of our largest and fastest growing markets with decades of growth,” Kobza, currently on an India visit as US fried chicken restaurant chain Popeyes completes its first year here, told ET in an interview.

“What’s unique and impressive about India is a lot of people entering the middle class and…one of the youngest populations in the world,” he said.

Dining out as a sector is seeing rapid growth post pandemic, said Kobza who was elevated to head Restaurants Brands International (RBI) earlier this month from his previous role as chief operating officer.

With over $35 billion in annual system-wide sales, the US foods services company operates in India through three exclusive franchise partnerships. While US burger chain Burger King is operated by PE firm Everstone and Canadian coffee chain Tim Hortons is run by AG Cafe, RBI signed an exclusive franchise deal with Jubilant FoodWorks (JFL) last year for Popeyes.

Popeyes, which competes with Yum Brands-owned KFC, so far has 13 stores in India, which it plans to scale to 50 in the next 12 months, and to 250 in the mid term.

ICICI Securities in a note last week wrote: “We believe the brand will compete fiercely with KFC and wrest some of its market share. The market may eventually expand to accommodate both brands…However, KFC does have an air-pocket to tackle for now as we assign high probability of new Popeyes stores in the same catchment as KFC.”

Kobza said prices at Popeyes’ India unit are among the lowest across markets the QSR brand operates in despite steep food inflation.

Sameer Khetarpal, chief executive of JFL, explained that Popeyes India benefits from back-end synergies of the company and its long-term partnership with business partners and vendors.

Khetarpal said chicken is one of the largest and fastest-growing categories in India and is expected to proliferate in years to come. While JFL’s core has been deliveries through its mainstay brand Domino’s, Popeyes is likely to push the dine-in format, as Indians flock to out-of-home dining.

JFL, which also exclusively operates Dunkin’ in the country, had said it will invest ₹900 crore to set up stores across its brands and build supply chain facilities over the next twelve to eighteen months.

RBI operates over 29,000 restaurants in more than 100 countries, according to information on its website. Popeyes has a footprint of over 400 restaurants globally.