McDonald's India Goes Veggie

McDonald's (MCD) is probably the best-run public restaurant chain in history. It has always done well in terms of employee training, keeping costs low, marketing etc., but recently its big victories have been in overseas expansion.

McDonald's recently announced a big India expansion, which is mind-blowing when you consider the fact that India is a vegetarian country. McDonald's has built a primarily veggie-lover’s menu, with only a few exceptions, such as the Chicken Mahraja Mac.

The menu in India has absolutely no beef or pork on it, in deference to the local belief that cows are sacred animals. McDonald's ability to adapt to this meat-less culture is extraordinary when you consider the fact that it is best known as the chain that sells billions of hamburgers a year. Just as the company does everywhere it goes, it gives the Indian people what they want and does it better than almost anyone else.

Business for McDonald's India is booming, with 35% sales growth in 2008, and a similar expectation for 2009. According to The Economic Times, McDonald's plans to open around 190 stores by 2015, which would more than double the current store count of 157.

It plans to employ over 12,000 people vs. the 5000 employees currently serving the chain around that country. McDonald's India is represented with outlets in 30 different Indian cities, including Mumbai, Delhi and Bangalore.

Should the human race one day succeed in colonizing another planet or galaxy, you can count on the fact that there will shortly afterwards be a thriving McDonald's wherever that may be.

Full Disclosure: I currently manage accounts that are long MCD. Please do not construe my commentary above as an invitation to buy or sell any securities. Do not invest or trade based on anything you read here. Please visit my Terms & Conditions page for a full disclaimer.

Comments

[HaavBline:]

Looks tasty, Not!

I always thought KFC matches far better than McDonald for India. Interesting report.

May 26 04:53 PM

[chrys:]

I wholeheartedly concur. I am an American living in India and the McDonald's (at least the one in Mani Square in Kolkata, West Bengal) is absolutely disgusting and barely edible. The KFC, on the other hand, tastes way better here than in the US - where it is often a grease soaked, water injected, fatty mess (because the meat industry in the US is absolutely wretched).

The only 2 things McDonald's has going for it is because kids love the sugary buns and the Name Recognition.

But it's true that McDonald's will succeed because Americans love to eat garbage.

May 27 07:19 AM

[Zyx007:]

KFC in India is still strugglingbecause of its inability to adapt to Indian palattes, unlike McDonald's. Indians do not like their chicken with skin, and KFC serves them the same garbage it serves overseas. As a result, even if someone does go in once, he or she is not likely to return.

McDonald's on the other hand has, in addition to the vegetarian menu, a selection of chicken burgers at various price points, and they have localized and built upon even such items as flavourd soft-serve ice cream cones (kesar mango - "saffron mango" - flavour), et al.

Pizza Hut from Yum brands is doing well precisely because it localizes toppings (unlike KFC), and the surprise is that Yum Brands has not though about testing/ introducing Taco Bell, despite similar tastes between Indian and Tex-Mex food, and its adaptability to vegetarian variations.

May 27 10:17 AM

[punk_ash:]

The worst meal of my life was at "TJI Fridays" in New Delhi.

May 30 12:16 AM