A Growing Taste for U.S. Fast Food in India

India has long had a reputation as being unfriendly to foreign businesses, but when it comes to fast food, international chains are being warmly welcomed by a young, upwardly mobile population.



In the past few months, Taco Bell, Krispy Kreme, Burger King and McDonald’s have either announced plans to expand in India or have opened new outlets around the country. Krispy Kreme was the latest to open a new store with its first outlet in Delhi last month, adding to its five branches in Bangalore.



Despite the country’s economic troubles, the average middle-class Indian consumer’s spending power is steadily increasing, with more people, particularly women, entering the workforce. In addition, Indians’ increased exposure to international cuisine through the media and travel makes the country a desirable destination for international food chains looking to expand globally.



“In India today, I think people are acquiring new tastes rather than changing their tastes, because it takes a whole generation to actually change tastes,” said Pinakiranjan Mishra, partner and national leader for retail and consumer products at Ernst & Young India. “As more and more people acquire money, there are a lot of new consumers who are experimental in nature.”



According to a study done by analysts at Technopak, a management consulting firm in Gurgaon, the Indian market for chain restaurants was an estimated $2.5 billion in 2013 and is expected to grow to $8 billion in 2020, driven by the growth of what is known as quick-service, or fast food, restaurants.



“The Indian market is growing at a slower pace than what China has done but the potential is as large,” said Saloni Nangia, president of Technopak. “India also has a young age profile, many more people eating out and international influences coming in. Some of the international brands could replicate, to some extent, the China story in India.”