J. R. Simplot Company, based in Boise, Idaho, one of US’s largest potato producers and major supplier of frozen french fries to McDonald’s, developed the potato by altering its DNA so less of chemical acrylamide is produced when potato is fried. Acrylamide has been shown to cause cancer in rodents and is suspected human carcinogen. Newly designed potato resists bruising.  Resistance to bruising is characteristic long sought by commercial users of potatoes because damage, which usually occurs during storage and shipment, makes them unusable.

Source: www.nytimes.com/2014/11/08/business/genetically-modified-potato-from-simplot-approved-by-usda.html 

CKB Solutions is all about real solutions for the real world.  To learn how we can help your business, contact Greg Kovacic in Hong Kong.

Summary:

• Indian's are increasingly hiring MNC food brands to cater and make their weddings stand out from the rest.
• This provides MNC food brands with fantastic opportunity to connect with their target customers - while being paid to do so.
• But MNCs need to be selective and make sure the weddings they cater match the brands' objectives.
• If you cannot maintain the quality of your product in a wedding setting, then the only winning move is not to play.
• The key India marriage seasons are November-February and April-May.
  

Imagine having MNC fast-food chains such as Domino's, Costa Coffee, Haagen-Dazs and Baskin Robbins entertaining guests at your wedding.  The Indians are doing it.  India definitely sets the standard for wedding ceremonies.  One way the rich marriage hosts now seek to make their wedding stand apart from the rest is to have MNC branded food and beverage stalls at the wedding ceremony.  Some even go so far as to replicate their outlets in malls, complete with similar seating arrangements.

A Fantastic Consumer Connect

MNCs are attracted to this trend because it provides them a direct channel to their target audience.  They are in effect being paid to promote themselves to the wedding audience, which just happens to be their target demographic.

A Haagen-Dazs parlour costs 5-8 lakh (INR 500,000 - 800,000) for one evening.  A Costa Coffee bar costs about 3 lakh (INR300,000).

New and Growing Business Channel

Caterers and wedding planners say the demand for branded food has gathered pace in the last 2 years.  15-20% of weddings these days demand branded stalls along with traditional snacks and cuisines. Demand for branded outlets is a growing trend all over the country, particularly in Chennai, Gujarat, Rajasthan, Mumbai, Punjab and Delhi. 

Dominos is taking advantage of this growing demand by forming a separate vertical for outdoor catering with dedicated staff, cold vans, pizza ovens and other paraphernalia in select markets such as Delhi-NCR, Mumbai, cities in Punjab and Uttar Pradesh. Domino's says wedding accounts for 50% of the outdoor catering vertical's revenues during the marriage seasons of November-February and April-May.

But Need to be Selective

A company must be selective about the kind of marriages they go to.  Revenue is not huge, so one must balance the consumer visibility, the wedding profile and the number of wedding guests.

And Not For Every Company - Must Be Able To Maintain Product Quality

McDonald's India does not do outdoor catering.  Creating and relocating a full store at weddings is logistically very difficult.  More importantly though, it is difficult to maintain the quality of its products outside its outlets.  In this situation, the only winning move is not to play.

Why India?

People are willing to spend to make theirs a grand Indian wedding.  Wedding hosts want the snob value and the bragging rights to have famous MNC brands at their weddings.  Indian weddings are becoming more and more about ostentatious showmanship with hosts wanting emphasize the specialness of the wedding event.

Source: "MNC food giants like Domino's, Costa Coffee, Haagen-Dazs eye a fast buck at Indian weddings", Economic Times of India, February 21, 2013
http://articles.economictimes.indiatimes.com/2013-02-21/news/37221580_1_weddings-future-brands-sushil-wadhwa

CKB Solutions is all about real solutions for the real world.  To learn how we can help your business, contact Greg Kovacic in Hong Kong.

Summary:

• Mexican food is unfamiliar to most Londoners and Brits.
  
• Chipotle is struggling in its international expansion plans, including London.
• Many other competitors have failed to gain significant traction in the U.K., which raises the question of why target this market?
• Chipotle is expensive compared to the alternatives.  This strategy works when selling an experience in an emerging market, but not in an advanced market with insufficient marketing and many alternatives.
  
• Chipotle is spreading itself too thin (pun intended): Few restaurants means lost opportunity to take advantage of scale in operations, sourcing and marketing, further raising the hurdle to successful expansion.  It should focus on a few specific markets and achieve scale before entering a new market.
• Chipotle needs to invest in marketing which is educational (about the food) and entertaining/humorous (about the Mexican-American angle) to create an image and atmosphere which makes people want to first try, and second come back with friends.

American-Mexican food restaurant chain Chipotle has a strong following in the U.S.  They seem to have trouble translating this success as it expands overseas.  The south-of-the-border food is failing to attract a following across the pond in London.

Why choose to expand abroad into a market where similar products have struggled?

Mexican food has always struggled in the U.K. Taco Bell launched in the U.K. in the late 1980s and had 3 outlets in London and 1 in Birmingham.  All 4 were closed by the mid 1990s.   Taco Bell returned in 2010 and now has three whole (sarcastic emphasis added) restaurants in the U.K.  Taco Bell positions itself at the lower end of the price-spectrum.  Chipotle positions itself at the higher end as “gourmet burritos and tacos” as American-style Mexican food.

U.K. burrito chain Tortilla was founded in 2007 by California-native Brandon Stephens.  By February 2013 after 5+ years, Tortilla has opened 11 restaurants.

Hardly numbers which are going to move the needle to a company the size of Chipotle.  But Chipotle seems to be spreading itself too thin when it comes to international expansion.  In Canada, Chipotle has opened 5 stores in 5 years.  This reduces Chipotles ability the achieve scale in operations, sourcing, marketing, etc. in any single market, in effect weakening its position in each market.

Why choose to expand abroad into a market where consumers are unfamiliar with your products?

Given the proximity to each other, there are obviously more Mexicans in the U.S. than the U.K.   This makes Mexican food staples like salsa, guacamole and tacos novel and unfamiliar in the U.K.. Customers even had basic questions on how to just eat the food - some would unwrap their burrito to eat it.

Why choose to expand abroad and then not invest in marketing to educate and entertain potential customers?

KFC, McDonald's, etc. have been successful expanding abroad in part because they were selling American-culture in an age of America The Undisputed Superpower.

Most Londoners are not yet familiar with the Chipotle brand.  This is no surprise given they have 6 stores and have not done any interesting marketing.  Chipotle is not selling American culture.  It needs an angle.  Chipotle could have some interesting and fun marketing around Mexican and American themes to educate people about the food and the restaurants.

Chipotle's prices are not helping.  in the U.K., many diners have a mental barrier against paying more than £5 for a lunch item. Chipotle’s burritos start at £6.50.  If you want to charge a premium, you need to use marketing and the customer experience to convince customers the premium is justified.

Source:  "Why Chipotle Sales Lag in London", BusinessWeek, February 26, 2013
http://www.businessweek.com/articles/2013-02-26/why-chipotle-sales-are-low-in-london#r=hpt-ls

CKB Solutions is all about real solutions for the real world.  To learn how we can help your business, contact Greg Kovacic in Hong Kong.