Amit Jatia, the vice chairman for McDonald’s India in the south and west of the country, talks about the growth and the challenges in the Indian market.

Why is India so important for fast food companies such as McDonald’s?

Dining out has seen explosive growth in recent years. Factors propelling this buoyancy include the changing economic and demographic profiles of consumers in India. India’s current urbanisation ratio stands at nearly 31 per cent, increasing by about 1 per cent per annum and this is a major driver for domestic consumption growth. Furthermore, with India adding to its labour force over 2010 to 2020, a wage growth of 12 to 15 per cent CAGR (compound annual growth rate) is likely to be another driver of domestic consumption. Today, there is a vast pool of working population, nuclear families and dual income households. Growing aspirations and the rising affordability in India’s middle class segment bode well for consumption growth. Additionally, India has a vast pool of young people.

Are the current economic conditions posing any kind of challenges?

Today, despite a temporary slowdown in the Indian economy, the food service industry is likely to continue developing positively. Growth will be driven mainly by way of a growing trend in eating out and competition between players, encouraging consumers to visit food restaurants.

Are you facing challenges from higher food prices?

Offering our customers good food at great value has always been at the core of our business strategy. To ensure this, McDonald’s revolutionised the supply chain system in India. Even six years prior to our entry to India, McDonald’s invested a lot of energy and money in setting up a robust supply chain system. On account of our supply chain efficiency and backward integration at the farm level where we follow fair trade practices, we are able to protect the customer from the full impact of a rise in prices.

* Rebecca Bundhun