Mid-sized global restaurant chains find Indian market palatable

New Delhi: Close to a dozen small to mid-sized global cafes and restaurant brands have either entered India in the past two quarters or are in talks with local players at a time when large global chains are seeing sharp decline in same store sales and growth.

Mid-sized global chains are making investments even in a modest range of '20-30 crore to tap select cities and intend to keep store counts under about 30 to stay profitable on each store. This is in contrast to earlier times when cafes and chains entered India with mega deals and investment plans, executives said.

Belgian bakery Le Pain Quotidien, French patisserie chain Laduree, UK's JD Wetherspoon and Frank HotDogs are among those to have inked collaborations with Indian partners, while newer homegrown ones such as Harley's, Paper & Pie, abCoffee and First Coffee are expanding with first-time investors and mid-rung store rollouts.

"A combination of factors is driving this change of newer, smaller launches," said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. "There are niches the newer chains are addressing as consumers' choices evolve and get more specific. Also, there's a broadening of a wealth base in India leading to mid-sized business houses having capability to invest and willingness to try out newer segments," he said.

With the big-bang launches in food services drying up, there's been a mushrooming of small deals that is expected to surge.

Bake & Brew, which has inked a master franchise agreement with Belgian bakery chain Le Pain Quotidien to re-enter India, is investing Rs 35 crore in the first year. "We'll start in metros and may expand to smaller towns later. We also see potential in travel retail, airports and larger train stations," Annick Van Overstraeten, chief executive of Le Pain Quotidien, told ET. Bake & Brew is backed by the Nalanda group with core business interests in automotive metal parts.

Earlier this month, the French patisserie chain Laduree said it was launching its cafe at Ritz-Carlton, Pune, in collaboration with CK Israni Group which has business interests in home decor and construction. Its Managing Director Chandni Nath Israni said in a statement that the CK Israni group planned to expand Laduree's presence across other Indian cities.

Experimenting in newer cuisines is also driving the change. "Our decision to expand in India stems from a deep appreciation for variety and a passion for bold flavours. We see great potential in the Indian market," said Benjamin Attal, founder of US chain Franks Hot Dog.

Smaller and newer homegrown chains, in contrast, are expanding, backed by mid-ticket investors and business houses, many of whom are foraying into food services for the first time.

Last week Brigade Group, a realtor, announced a partnership with specialty coffee chain abCoffee to set up six outlets within Brigade properties.

"We partnered with abCoffee to enhance the F&B offerings at our office parks. abCoffee is able to retrofit into operational buildings without requiring additional water or gas points," Arvind Rao, vice president - commercial business, Brigade Group, said.

Specialty coffee startup First Coffee plans to open 35 stores by 2024-end "focused on delivery and minimalist store aesthetic," according to a company statement, to sell flavoured coffees, cold brews and bubble teas.