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Pizza industry travels to small towns

October 30, 2006 11:37 IST

Nearly a decade after their entry into India, MNC pizza chains have finally started to 'think local', going as they are to small towns and cities with their kebab and chicken tikka pizzas.

From Vapi in Gujarat to Guwahati, Jamshedpur, Meerut, the list of places where these MNCs are opening joints is endless. Once treated as an alien snack, pizza is being projected as a complete family meal, those in the industry say.

"The organised pizza market, which comprises MNC chains and big brands is worth Rs 700 crore (Rs 7 billion) and is growing at a rate of 30 per cent annually. Innovation and localisation are the key to growth in the pizza industry," says Arvind Mediratta of Yum Brands India, promoters of Pizza Hut.

"Pizza is being projected as a complete meal and in near future, it is going to redefine the whole dining experience," he says. "Pizza market is growing because of changing life styles and eating habits. Acceptance of Pizza as a meal is an emerging trend in recent years.

With aggressive communication strategy, restaurant chains have been able to increase the industry size by generating demand, says Sandeep Madan of Nirulas. Already pizza chains have moved ahead from just pizza to add other Indian dishes like masala chicken, lemonade, kulfi and mango ice-cream. The pizza too has been Indianised, the crust is Italian, but the toppings are essentially Indian, says Mediratta.

"The whole idea is to give familiar tastes and toppings: Indians relate more to Kebabs, Chicken or Paneer Tikka toppings

than Pepperoni," he says.

Localisation of toppings has definitely led to the increase in the pizza market, says Madan, noting smaller towns such as Jaipur, Jalandhar, Ludhiana, Indore, Bhopal offer good scope.

People there are now more open to trying new products.

According to estimates, total pizza industry is worth about Rs 2000 crores (Rs 20 billion) and is showing compounded annual growth of 20-25 per cent.The MNC players in the market include Dominos, which is exclusively in delieveries, Pizza Hutt -- which is present in dine-in, take aways and delieveries.

Third player which has just entered India in big way is Papa Johns. Others are Debonair's Pizza, Pizza Express. Among the Indian pizza chains is Pizza Corner and Nirulas. Another entrant in this list is Vierra Pizza which has just opened their first outlet.

However, key factors which will drive future growth in the market are franchisee-franchiser relationship,lack of trained manpower, high attrition rate, lack of quality suppliers and threat from the unorganised sector, says Taran Deep of Papa Johns.

Stressing on innovation and localisation, she says, "innovation helps in higher recall. It gives options to the guests whereas localisation helps in reducing the cost majorly and also helps in catching new customers who are averse to trying out anything new except their own staple food."

However, original pizzas will always remain in demand, she says and Mediratta agrees.

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