McDonald’s Launches Vegetarian Restaurants In India To Capture More Market Share

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(Photo: Stock.xchng)
(Photo: Stock.xchng)

BUSINESS

  • McDonald’s catering to local tastes in India with vegetarian-menu-only restaurants
  • Majority of India’s population does not eat beef or pork due to religious reasons
  • Half of McDonald’s menu in India already vegetarian

McDonald’s Corp., one of the world's largest fast-food chains, has plans to open its first vegetarian-menu-only locations in India in an attempt to capture more of the Indian market.

McDonald’s tailors its menus worldwide to suit local tastes. In India, its menu offers no pork or beef, with only chicken and vegetarian options.

The majority of India’s population of approximately 1.2 billion people are Hindu, and do not eat beef because they consider the cow to be sacred, while India’s Muslim population does not eat pork as pigs are viewed as unclean in the Koran.

The Indian equivalent of the Big Mac is the Maharaja Mac, which is made with chicken instead of beef.  A quarter of sales come from the McAloo Tikki, a potato patty sandwich.

Nearly half of McDonald’s current menu in India is already vegetarian. Kitchens are divided into vegetarian and non-vegetarian sections.

The fast-food chain has over 33,000 locations globally, but only 271 in India. Company spokesman for northern India Rajesh Kumar Maini says India represents a very small market for McDonald’s, so far.

The new restaurant will not only be McDonald’s first vegetarian-menu-only location in India, it will be its first globally.

No specific date has been announced for when the restaurant will open.

Health Concerns

McDonald’s said, after sales were flat in July, that it would begin offering more local food options to help the company counter rising competition in an uncertain economy.

McDonald’s is not the only fast-food chain to alter its menu to compete in the Indian market. Recently, Domino's Pizza began offering a pizza with extra-spicy toppings to suit local tastes.

As Western fast-food chains spread into India, there is increasing concern that the greasy, high-fat foods they offer will lead to obesity in the Indian population, just as they have in the West.

In other parts of the world, McDonald’s has addressed customer dietary concerns by altering its menu. The chain now offers more salads and has food options that are lower in fat, salt and sugar.

In 2002, McDonald’s was accused of misleading customers by labeling French fries and hash browns as vegetarian, which was false as the vegetable oil the products were fried in contained traces of beef. The fast-food giant agreed to donate $10 million to Hindu and other groups in the US to settle the suit.

Key Statistics - Fast Food Industry in India (source: MarketLine)

  • In 2011, the fast food market in India generated revenue totaling over $11 billion. For the time period 2007- 2011, this represents a compound annual growth rate (CAGR) of nearly 13%.
  • Between 2007 and 2011, market consumption volume for the fast-food industry in India had a CAGR of nearly 9% to reach 59 billion transactions in 2011.
  • For the five-year period 2011-2016, the market is expected to decelerate. By the end of 2016, the market should be worth close to $19 billion and have a CAGR of over 10%.

By Melina Druga for
Melina Druga is an American writer and editor. She is the author of Enterprising Women: Practical Advice for First Time Entrepreneurs.

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