Taco Bell Vs KFC franchise

PANAJI: Yum! Brands – which operates fast-food chains like KFC, Taco Bell and Pizza Hut – will invest $10 billion along with its franchise partners in emerging markets by 2020, as it pushes a China-like, expansion-driven growth model in India. Calling Yum! Brands an emerging market powerhouse, David Novak, chairman and CEO of the $13-billion Louisville, Kentucky-based restaurant group, said India will start to significantly contribute to the company’s overall sales by 2015 when it reaches 1,000 stores and a billion dollars in revenue. Novak, in an exclusive chat with TOI on the sidelines of the opening of Yum’s 40,000th restaurant in Goa, said the India market – where Yum! will invest $100 million in three-four years and backed by a growing consuming class – will over the years make a lot of money for the fast food major.

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It has been two years since the India business was separated into its own standalone segment, the only one other than China. However, India is still substantially smaller, with only $400 million in sales, than Yum’s China division. When will we reach China’s size?

I hope fast, but we are a long way off right now. However, in this business you see an opportunity, you know it’s there, and you stay with it. We know there is a population of a billion people, which is going to become the largest consuming economy in the world – some day. So, we need to stay the course and build our brands. This would lead us into having a huge business here. In fact, I would want to meet that person who would not want to own our business in India in 20 years from now. We are enormously excited about India and its long-term growth potential, which is one of the reasons why we made it into a separate division. The other reason we made India into a separate division is because of the great local management team which I directly wanted to supervise.

Has the India focus let you de-risk your China dependence, considering that over the past two years China has seen flat or negative same-store sales growth, which is a key indicator in the retail business?

We are overwhelmingly excited that we have a China business which is the envy of the retail world. There is nobody who would not want the business that we have in China. We think we are on the ground for growth in China. We can have thousands of more stores in future, but we look at the world and specifically the emerging markets for further growth and as a huge opportunity for us. Yum! Brands is an emerging markets powerhouse – about 14,000 of our stores are in emerging markets. Out of the 1,800 stores we opened this year out of the US, 1,400 were in emerging markets. We can grow Russia, China and India as we have the capital to do it.