Jubilant Foodworks Adds Biryani To Noodles As It Looks Beyond Pizza
(Source: Ekdum's official Instagram handle)

Jubilant Foodworks Adds Biryani To Noodles As It Looks Beyond Pizza

India’s largest pizza chain is trying to cut reliance on its pies.

Jubilant Foodworks Ltd., operator of Domino’s outlets, now also sells kebabs to noodles. In the last year and a half, the company has opened the Chinese cuisine chain Hong’s Kitchen and Ekdum! biryani restaurants.

Biryani is India’s most-ordered dish and Chinese is the second-largest foodservice category, according to data compiled by Swiggy based on online orders. Jubilant Foodworks’ entry in these two segments comes after the acquisition of Barbeque Nation, a grill-themed chain. The company continues to explore growth avenues outside pizzas, more so when the pandemic hurt hotels and restaurants the most.

Diversification into different geographies and cuisines makes the Jubilant Foodworks business less cyclical, ICICI Securities said in a note. The restaurant operator can derive synergies from Barbeque Nation and a better negotiating power with suppliers and food aggregators, it said.

BloombergQuint awaits a response to queries emailed to Jubilant Foodworks.

The company, with 1,314 Domino’s and 27 Dunkin’ Donuts outlets in the 285 cities as of December, has opened seven Hong’s Kitchen stores in Gurugram and Delhi; and three Ekdum! restaurants in Gurugram.

While biryani is one of the largest categories in the country, it is also highly fragmented by very few national brands, Pratik Pota, chief executive officer at Jubilant Foodworks, told investors in its third-quarter earnings. “We believe Ekdum! can play an important role in growing the organised biryani segment,” he said. And the Chinese quick-service restaurant space is vacant, he said.

Cloud kitchens have turned chicken biryani into the most-bought Indian food. It was ordered every second last year, according to Swiggy. Masala dosa, paneer butter masala, chicken fried rice and garlic bread followed. Pizzas and burgers aren’t even in the top 10.

The organised biryani delivery industry is worth Rs 2,500 crore, according to a report by Ficci and PWC. While no estimates are available for the unorganised market, it will be far bigger as biryani outlets are found in every corner of India.

Ekdum!, launched in December, will take on Paradise, Behrouz Biryani, Charcoal Biryani, Biryani Blues, Biryani by Kilo and the Biryani Project.

Pota told analysts that learnings from Hong’s Kitchen will help the company fast-track expansion of Ekdum! as biryani is "a little bit more amenable to standardisation".

“In Chinese cuisine, there's some amount of skill required in wielding the wok and so on and so forth, which is less so in the case of biryani,” he said. “To that extent, yes, the scale would happen a little faster.”

Growth Away From India

Jubilant Foodworks is also the operator of Domino’s in Nepal, Sri Lanka (23 outlets) and Bangladesh (four restaurants). It also acquired a 32.8% stake in DP Eurasia, the franchise for Domino’s in East Europe. DP Eurasia runs 568 outlets in Turkey, 190 in Russia, nine in Azerbaijan and four in Georgia as of December.

Prabhudas Lilladher said the company is a market leader in Turkey and No. 3 in Russia.

Jubilant Foodwork’s stake acquisition in DP Eurasia and Barbeque Nation as well as new ventures like Hong’s Kitchen and Ekdum! are in the right direction, ICICI Securities said. It can turn around DP Eurasia following its India model and offer better dine-in experiences using the learnings from Barbeque Nation.

Jubilant Foodworks will be able to drive benefits in the long term given the familiarity to operate Domino’s in India, and an asset-light business model with more focus on franchisee operations, according to Prabhudas Lilladher. There’s scope to grow in Russia and Turkey with a potential of 1,500 and 900 stores, and synergy benefits in raw material procurement and technology, it said.

The addition of these territories, it said, doubles the addressable market for the company.

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