Indian Food Service Industry and Jubilant Foodworks

 Indian Food Service Industry and Jubilant Foodworks

Jubilant Foodworks is an Indian Company whereas Dominos Pizza and Dunkin’ Donuts are American brands. For such brands entering into different countries is difficult as each country is unique in its own way thus, usually international brands prefers to give franchise to another companies.

Jubilant Foodworks Limited is one of the largest food service Company in India. The company holds the master franchise rights for two international brands, Domino’s Pizza and Dunkin’ Donuts. It holds master franchise for many countries like India, Bangladesh, Sri Lanka and Nepal. Under master franchise the company holding franchise have the right to further distribute or give sub franchise to some other person or company. In India, Jubilant Foodworks Company is performing exceptionally well. Jubilant Foodworks is operating more than 1325 outlets of Domino’s Pizza in India It also holds master franchise for Dunkin’ Donuts and Hong’s Kitchen.

History

Jubilant Foodworks Ltd started way back in 1995. Is was incorporated with a name Dominos Pizza pvt ltd. In 1996 it opened its first ever store at new Delhi. In the year 1998 the company started its expansion at a very vast level. In 2009 the company changed its name from Dominos Pizza India Pvt limited to Jubilant Foodworks Ltd.

In 2011, they entered into a master franchise agreement with Dunkin’ Donuts. In 2012, very first store of Dunkin’ Donuts was opened in new Delhi. In 2012 the company received an award from Economics Times honouring company as the ‘Emerging Food Group of the year’. 2016 was considered as the landmark year for Jubilant Foodworks. However, this landmark year was also accompanied with defame for the company, as ‘Centre of Science and Environment’ reported that Dominos Pizza contains some Toxic Substances which may cause lung cancer in people. Thus, Dominos Pizza came into negative limelight in the year 2016. Adding to this in 2017 live bugs were found in one of the sachets of oregano. To counter this crises Dominos immediately stopped giving oregano sachets to its customers. To address this problem Dominos came with a strategy of using opaque cover for its sachet rather than transparent which were being used earlier.

Products

1.          Dominos

The company has witness largest success due to its products under the brand – Dominos. India is the second largest pizza market after USA. After witnesses grand success of Dominos Pizza in India Jubilant Foodworks entered into another master franchise of Dunlin’ Donuts.

2.          Dunkin’ Donuts

Dunkin Donuts currently operated in 10 Indian cities. However, the speed at which Jubilant Foodworks expanded Dunkin’ Donuts in India, they were not able to sustain it. As a result, many shops of Dunkin’ Donuts had to close down.

It was latter concluded that the main reason for the failure of Dunkin’ Donut in India was that Indian People are not used to eating sweet bread in breakfast. Moreover company officials themselves admitted that the were not able to sustain the pace at which they expanded. More and more resulted in more and more rentals, thus leading to a hike in operational cost.

3.  Hong’s Kitchen

Hong’s Kitchen is a Chinese brand. But in this case Jubilant Foodworks do not hold franchise rather Hongs’s Kitchen is their own brand. According to a survey, Chinese food is the second largest food consumed in India.

Contribution to economy

Jubilant Foodworks currently employs more than 28000 employs in India.

Reasons behind flourishing Food Service Industry

Food service sector is the fastest growing sector in India. The growth in Indian Food Service S Industry is driven by changing lifestyles, demographics and economic environment. The CAGR of Indian Food Industry stands at 9% as of 2019. Another important reasons flourishing Food service industry in India are – Digital led online ordering, home delivery, third party aggregator options, reward points, cashback facilities, reward points.

The following table shows the percentage of organised and unorganised food service industry in India

Segment	2016 (%)	2019 (%)
Organised	33	35
Unorganised	67	65

Since, even as of 2019 the unorganised stood stood at 65%, thus we can say that there is a huge space or playground for companies operating in organised sector such as Jubilant Foodworks.

Changing Demographics also play an important role in providing boost to Indian Food Service sector. Indian population is expected to attain a median age of 31 years by 2030. India will remain one the world’s youngest nation in the world with one of the largest working population.

Greater spending power of the Indians is also providing fuel to the Indian Food service Industry.

High internet penetration also plays an important role in ever expanding Food Service Industry in India. Food aggregators like Zomato and Swiggy have added to the easy of ordering food thus, leading to greater food consumption than before. Increasing urbanisation have also resulted in more and more demand for fast food like pizza. Urbanisation has increased form 33% in 2015 to 35% in 2020.

Conclusion

The above-mentioned factors are responsible for flourishing Indian Food Service Industry. Food Service Industry in India is a huge market having huge market potential for future expansion as well. The frequency of Indians dinning out is just 4-5 times a month as compared to 28 times in Singapore and Hong Kong. Growing urbanisation is also lead to increase in more and more dinning out fashion. No doubt that upcoming 15 years will witness a significant growth in Food Service Industry in India.