Is India the next El Dorado for fast food chains?

The subject of fast food always puts me in mind of a conversation I had with Rupert Murdoch

in the Nineties just after he had bought Star TV from Richard Li. I was assigned to interview Murdoch and I asked him what his plans for programming were. Oh, that would be easy, he said. His networks and studios had access to a vast bank of programming. All they needed to do was to dub them into Hindi.

 

Murdoch was merely repeating the conventional wisdom. At that stage, re-runs of Baywatch in 50 different languages kept the whole world enthralled. A theory had evolved, which said that all good American programming was global. (After all, it was Murdoch who famously said “globalisation is just another word for Americanisation”). You just had to make it language-neutral and it would succeed, no matter which country you showed it in.

 

   I was sceptical of the applicability of this theory to India. We have our own strong popular culture and I could not see Indians crowding around their TV sets to watch Baywatch in Hindi. As it turned out, Murdoch changed his mind very quickly. It took him a couple of years to realise that Star TV had to be fully Indian (and thank God for that because that is how people like me got into the TV business!) and in a few years, Star was all-Indian, and Star Plus, showing only made-in-India programming, has become the country’s number one channel for what seems like forever. And it is probably Murdoch’s biggest TV operation in the world.

 

   Something similar has happened in the world of fast food. I remember the arrival of McDonald’s, with much fanfare, into India. At that stage, like Murdoch, the chain’s global management announced that it would stick to the global formula. And it offered us the fast food equivalent of dubbing into Hindi: the burger would be made from mutton not beef, to ‘respect Hindu sentiment’ (and to sell more, I would imagine!).

 

   The mutton burger (foolishly dubbed the Maharaja Mac) failed and was withdrawn. Instead McDonald’s slowly Indianised its menu, with aloo-tikki burgers and masala on demand and found much greater success in the Indian market. Though its recent tussles with one of its operators have been PR nightmares, there’s little doubt that the chain is here to stay.

 

   Which leads me to wonder: if a global chain uses international processes but completely Indianises its product, can it become the fast food equivalent of Star Plus?

 

   It is a serious question. McDonald’s is worried about the US market. According to the Financial Times, same store sales in its US outlets fell in ten of the last twelve months. In October it announced that profits were down 30 per cent in the last quarter. Sales growth in Europe is sluggish, a Chinese food-safety scandal has hit McDonald’s and Moscow has opened (probably unjustified) hygiene and finance investigations into nearly half of McDonald’s outlets.

 

   So is India the next El Dorado for fast food chains? My guess is that yes, it could be.

 

   There are crucial advantages for foreign players in the fast food market. The first relates to the aspirational nature of the Indian middle class. In most Western countries, no middle-class person goes to McDonald’s or KFC out of choice or is proud to be seen in one. (The delivery chains, like Domino’s, don’t face that problem because their products are consumed at home.)

 

   As a consequence, the kind of food associated with fast food chains – say hamburgers – is now consumed by the middle classes at upmarket places (Byron in the UK, Five Napkin Burger in New York etc) or at trendy chains such as In-N-Out Burger (in California) or Shake Shack (now global). The vast industrial-corporate nature of the big chains goes against them.

 

"Burger King has Indianised to the extent that the menu is now uniquely Indian. Only the processes and service are American."

   In India, on the other hand, there is no shame – even among the middle class – in being seen at a McDonald’s or a KFC. And among what might be called the emerging middle class, there is a certain glamour to eating at such places.

 

   The aspirational nature of the new India has another advantage. In the West, flipping burgers or working behind the counter at a fast-food store is considered a lowly job that pays minimum wages and can be a source of shame. People who work at fast-food outlets often hate their jobs, which they’ve accepted only as a last resort or as a stop-gap. And it shows in the service.

 

   In India, however, most fast food employees are first-generation English speakers who take huge pride in their jobs and are thrilled to wear the uniform of a great global brand. They love their jobs, they love the malls they work in, and they don’t regard themselves as underpaid.

 

   While researching this article, I went to two food centres in Delhi’s Vasant Kunj. At the cheery Ambience food space, all the guests were having a great time and acting as though they were enjoying a restaurant experience. The staff at the stalls were as happy. At McDonald’s, they smiled a lot and were keen to explain the menu. At KFC, they urged me to try new dishes in the manner of attentive maître d’s at top restaurants. At Subway, the guy who made my sandwich looked crestfallen when I said I would come back and collect it. “Sir, please wait and watch me make it. It will only take a minute!”

 

   The Promenade food court is largely soulless but even there, the staff at the foreign chains took real pride in what they were doing and guests were having fun. (The one dud was an Indian bhujiawala chain, which I will not name, where the staff were sullen, service was disorganised and menu items were not available. So obviously, global systems have something to do with running a good operation.)

 

   Given this background, the global chains should find it easy to flourish in India. We have no snobbery about eating in chain restaurants. We love it! I can understand the crowds that greeted the first Starbucks (which has a sort-of-trendy image) but even Nando’s had customers lining up. And crowds thronged the opening of the first Burger King store in Saket in Delhi.

 

   Ah, Burger King! That has been the noisiest fast food launch so far and at last count, they were selling over 4,800 burgers a day at their outlet. This does not surprise me, though when I first heard that Burger King was coming to India, I was a little intrigued.

 

   As you probably know, Burger King is a great American fast food brand but its primary point of distinction from McDonald’s has been the superior quality of the beef patty it puts into its signature burger: the Whopper. So, I wondered, how would the all-American Burger King survive in a no-beef market? (Another US chain called Wendy’s whose most famous put-down of McDonald’s thin patty was “Where’s the beef?” is also coming to India. I guess we’ll all go to the stores and ask, “Where’s the beef?”)

 

   But Burger King has Indianised to the extent that the menu is now uniquely Indian. Only the processes and service are American. Unlike McDonald’s, which abandoned the hamburger, Burger King has taken the challenge head-on by developing a lamb (not goat) patty for the Whopper. I tried the patty and was impressed: it had texture and a nice, spicy tang, and the characteristic Whopper construction.

 

   Other dishes include a chicken tikka sandwich (good) and a range called the King’s Melt, which turns the cheeseburger principle inside out by infusing the cheese into a patty rather than putting a slice on top (and then adding chilli). I tried some and thought they worked well in texture terms. And even a confirmed paneer-hater like me was impressed by the Paneer King Melt.

 

   So how has Burger King got it so right at the very start? Two reasons. One, they’ve learnt from McDonald’s mistakes. And two: they are no longer a great American corporation seeking to impose truth, justice and the American way on the rest of the world. They are now owned by a Brazilian company called 3G, which recognises that India needs its own menu.

 

   It is funny though. Years after McDonald’s abandoned the burger, the hamburger is back in India in a big way. The success of Dunkin Donuts in this market is not due to the donuts (Krispy Kreme has attracted little attention here) but to the very popular burgers – created for the Indian market. And now Burger King has repeated that triumph. More are sure to follow.