Management Development Institute - Gurgaon

Supply Chain Management

Group 05:

FOODS: Multiple menu for food

SCM Minor Project
PART-II: PPT Report

Submission Deadline: 28th August 2016

ID

Name

15P131

Arjun Phookan

15P140

Gautam Srivastava

15P141

Harsh Pathak

15P153

Rushabh Mehta

15P168

Sankalp Madaan

15P172

Somnath Patra

Post-Graduate Programme in Management

(PGPM: 2015-2017)
Term: IV (Jun-Sep, 2016)

Introduction

Global food companies have built business empires in the developed world
Developed markets typically account for as much as two-thirds of their business turnover
Attention has turned to emerging markets for growth
Emerging markets are relatively underfed
The opportunity is huge as these markets are home to more than 80 percent of the world's
population
Yet they account for less than 60 percent of global food consumption
Emerging markets will also add nearly 3 billion people more than 40 percent of today's global
population to the middle class by 2050
Together, India, China, and Africa account for roughly 40 percent of the world's total arable land,
45 percent of irrigation-equipped land, and 30 percent of inland waters
China and India alone produce as much as 50 percent of the world's rice, wheat, and potato crop
We know that replicating business models, products, management systems, and processes used
in developed economies does not work in emerging countries

Food preferences across India

High diversity found in emerging markets,

case in point - India
Highly varied food preferences
Different languages spoken in different parts
of country
Globalization is bringing us closer together,
but even as it does so, we continue to retain,
and even celebrate, many of the traditions
and customs that make us unique
Festivals celebrated at different times
Local food supplies in each part different
The northern states prefers wheat whereas
the southern states have high rice content in
their meals and the east prefer fish in theirs
Also terrain and infrastructure readiness
widely different

Salient Characteristics

Consumer preferences for food: Emerging markets

extreme nutritional deficiencies continue to ague much of the populace in developing
countries
while there are opportunities to sell premium functional foods to the wealthier classes, mass
market needs gravitate toward affordable, filling, nutrient-dense foods
Consumer tastes and preferences: Cater to what shoppers like
people spend more on food suited to the local palate than they do on so-called global
cuisine
tastes in emerging markets often span a broad range of culinary traditions and customs
Price levels: Volume trumps margin
same item can sell for as much as 60 percent less in a developing country as in a developed
Eating out has gone up to 9-10 times per 100 meals from 3 in 2003
Dominos Pizza dominates with a 20% share, followed by Subway (12%), McDonalds (11%),
Kentucky Fried Chicken (9%) and Pizza Hut (8%)

Industry Analysis
To better understand the food industry the
following 3 companies were studied

Mc Donalds

McDonald's is the world's largest chain of hamburger fast food restaurants

McDonalds opened its first Indian outlet in 1996
India only country where it does not serve hamburgers
McDonalds found a recipe to appeal to Indian palates; through chicken and vegetarian
offerings
The backbone of McDonalds operations is built on a unique farm-to-fresh cold supply
chain
It took nearly 6 years before the first McDonalds restaurant was opened
Found it hard to find suppliers who could match its high quality requirements
Over time, McDonalds, in partnership with suppliers, have optimized major supply points
It has achieved 90% indigenization in Mc Fries compared to complete imports prior to
2008
However, Fish continues to be imported as Indias supply chain cannot ensure consistent
supply

Mc Donalds Suppliers
Supplier
Iceberg Lettuce

Location
Ooty , Dehradun
,Pune ,Delhi

Chicken &
Frozen Peas,
Vegetables
Cheese & Dairy
Products

Taloja (Mumbai)
& Delhi ,Pune
Baramati
(Maharashtra)

Potato for
French Fries
Buns

Gujarat

Maharashtra &
Punjab
Delhi, Mumbai,
Kolkatta,
Bangalore

Distribution
Centers

Location Preference

Cold claimate & Max Yield

Drip irrigation facility

Near Distribution Center

Near Distribution Center

Cold storage facility

Expertise in Poultry

Availability of cattle
Coolers at Collection
Centers
Climate Conditions for
High Solid Matter
Near Distribution Centers
To cater all regions &
Near major Metros

Subway

Subway IP Inc is an American fast food restaurant franchise that primarily sells submarine
sandwiches (subs) and salads
Subway is one of the fastest growing franchises in the world, with 44,818 restaurants in 112
countries and territories as of August 9, 2016
Subway opened its first restaurant in India in 2001 in New Delhi
Started opening two counters at store levelfor vegetarians and non-vegetariansseparately
only for India
Internationally, Subway sells 16 different sandwiches, but in India, the food chain has 23
sandwiches on its menu

Dominos

Domino's, is an American pizza restaurant chain and international franchise pizza

delivery corporation headquartered in USA
India is the largest international market for Domino's outside its home market
The company operates 1004 stores across 230 Indian cities as of February 11, 2016
Indian pizza flavors such as paneer pizza, chicken tikka masala pizza, and kheema do pyaza
pizza have been sold in other international markets
About 55 per cent of all pizza sold in India comes from Dominos
Annual same-store sales growth has been about 23 per cent
Dominos has a vertically integrated supply system; raw materials like wheat, baby corn, tomatoes
and spices are centrally purchased and wheat is bought from Jalandhar
Inventory levels are monitored centrally via POS data using Intura Vision installed in every outlet
With preparation, baking and boxing of pizzas taking 12-13 minutes, Indian deliverymen have 810 minutes to ferry their piping hot cargo to its destination leaving a margin of just a few
minutes to fulfill their now iconic promise of delivering pizza in 30 minutes