Famous Brands Forges Entry into India with Debonairs Pizza

Famous Brands takes Debonairs Pizza to India

Johannesburg; Thursday, 14 March 2013: Famous Brands has announced the Group’s expansion into India with the launch of its pilot Debonairs Pizza restaurant scheduled for opening in Mumbai in July 2013. In the short-term, five restaurants will be opened in Mumbai, India’s main economic hub and its wealthiest city, featuring the highest GDP of any city in South, West or Central Asia. Famous Brands has appointed a Master License partner in the territory to manage the business on behalf of the Group.

Famous Brands Chief Operating Officer, Darren Hele, says, “Entering the Indian market is as much about our partners as it is about the market. They will give us local knowledge advantage which is critical to the sustainability of this venture.”

The Master License agreement has been concluded with family-owned Diwa Hospitality Pvt Ltd, a subsidiary of the Parekh Group conglomerate, which was founded 50 years ago and specialises in shipping, logistics and hospitality.

Hele says, “Whilst Debonairs Pizza is Africa’s biggest pizza brand and the Group is confident of exporting the concept, in-depth research has shown that the model must be relevant from day one, and be re-engineered to fit the Indian market. In this regard, our Debonairs Pizza offering in Mumbai is all about a customised menu – with a strong vegetarian bias; local flavour profiles developed in conjunction with our partners; and innovative product offerings designed to support the cost conscious ‘grab-and-go’ Mumbai consumer. It is also about a bespoke trading format which factors in that access to retail trading space in high density markets such as this are at a premium.” Debonairs Pizza’s free home delivery model, for which the brand is famous, will however remain intact given that home delivery accounts for a significant portion of the pizza business in India.

The Group has received investment enquiries from a range of emerging market countries but selected India for several key reasons. Hele says, “There are very strong factors driving growth in the food services industry in India, including a general increase in disposable income; intensified urbanisation; and the exponential growth in the population segment most likely to consume processed food – the 5 to 35 year age group – which is projected to grow to 51% of the total population by 2020¹.”

“In addition,” says Hele, “Pizza currently accounts for the biggest share of the QSR market in India and is the fastest growing segment. The QSR market is expected to grow from US$ 15 billion (2011) to US$ 50 billion in 2020, at a faster rate than even the Chinese market¹.”

Yogesh Parekh, Director of Diwa Hospitality, comments, “We made a decision in 2012 to tie up with a restaurant operator who had an understanding of the huge potential of the Indian restaurant market – a partner who recognises that India is unlike any other market in Asia Pacific or the United Arab Emirates. Famous Brands shares our optimism for the growth potential in this market, and our local knowledge and insight together with the meticulously customised Debonairs Pizza offering ensures the brand has every opportunity to become a household name.”

Parekh says, “The latest GDP data² suggests a shift in consumption patterns, with Mumbai consumers scaling back spending on clothing and footwear for the first time in nearly a decade and increasing their expenditure on travel and eating out. Out-of-home consumption constitutes upwards of US$ 7 billion per year, of which the QSR Market comprises 40%; the balance is made up of other segments including Fine Dine, Local Dining, and the Informal sector.”

He adds, “Statistics¹ reveal that Indians are eating out more often now – as much as 7 times a month – but less than other countries like China (8.4 times a month) and Brazil (11.8 times a month), which indicates the strong potential to grow the industry in India.”

Hele concludes, “This partnership with Diwa Hospitality is specific to Mumbai and Debonairs Pizza at this point, but we are optimistic that the success of this venture will enable us to extend our relationship with them to other brands in the Group’s portfolio and other markets in India.”

 

 

Notes to editors:

– Debonairs Pizza currently trades out of 345 restaurants in South Africa and a further 60 restaurants in 14 other African countries.
– Famous Brands has Master License agreements in 12 territories outside of South Africa.

References:

Source: ¹ = Axis Capital Environmental
Source: ² = http://economictimes.indiatimes.com/topic/GDP

For further information:

Kevin Hedderwick
Chief Executive Officer
Famous Brands Ltd
Telephone: 011 651 5812
Del-Maree English
Investor Communications
Mobile: 083 395 8608