Homegrown pizza brands looking for a bigger slice

When it comes to pizza in India, Domino’s is the clear leader while Pizza Hut may get considered as the second. After Chinese, Italian or we may say pizza is the second most consumed global cuisine in India. Domino’s entered India in 1995 at a time when the country was just beginning to open up its economy to the rest of the world. India removed subsidies on some items, lowered certain import duties and invited foreign competition. With globalization came American brands like Coca-Cola, McDonald’s, Pizza Hut and Domino’s.

Jubilant FoodWorks, Domino’s franchisee, said it was the first food service company to launch online and mobile ordering nationally in India. As of January 2020, nearly 30 million people have downloaded its mobile ordering app. By 2019, the pizza market in India had grown to more than $1.5 billion and is currently worth over INR 1,500 crores and has been growing at a CAGR of 26 percent for the last five years.

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For years, Domino's Pizza has dominated the Indian pizza market while making it difficult for any other brand to grab a slice of the market. However, with consumers being more open to new tastes and more accepting of new entrants, several Indian homegrown pizza brands have been able to mark their fare presence if not as dominant. 

Growth opportunities for homegrown Indian pizza brands

An increase in consumerism is one of the largest factors that have lead to the increased popularity and demand for Indian brands. As more people have become more interested in pizza, the demand for it has surged. In order to meet the growing demand, more Indian establishments that serve this type of food are being opened throughout India.

Commenting on the same, Ashwin Jain, Co-Founder of InstaPizza said, “I think consumers are increasingly looking for homegrown brands which have unique voices in pretty much every category, and pizza is no different. The global giants will always be the 800-pound gorillas in the room, but there are so many cool brands bringing creativity, vibrancy, and spunk to the market. We’re trying to do the same in pizza by keeping our menu and products fresh and innovative, our quality high and prices low, and our voice loud, clear, and desi.”

Launched in 2014 and working on a ‘thin-crust business model’, Gurugram-based pizza startup InstaPizza wants a bigger slice of the market as it takes on Pizza Hut, Domino’s, and multiple local brands. 

“There has been a spurt of pizza brands in the last couple of years which has come up. The biggest driver for this has been customer awareness and the demand for a great quality pizza that moves beyond what is easily available through QSR brands,” shared Krishna Gupta, Managing Director, 1441 Pizzeria. 

Love for global brand

No doubt, international pizza chains in India have enjoyed the first-mover advantage. Explaining it further, Jain commented, “I think the biggest factors are age and scale. Jubilant Foodworks (Domino’s) basically created the markets for both pizza and delivery in India, and so the consumer mindshare has really been linked to the brand. In the case of Domino’s especially, their scale is so vast (1360 outlets and growing), that they have reached every part of India. That scale gives them great consumer recall, as well as huge advertising budgets that keep them at the top of customer’s minds. In addition, though, consistency is a huge factor.”

“Playing on nostalgia and great advertising campaigns over the years such as ‘Dominos 30 minute free pizza delivery’ campaign has enabled them to grow and expand their presence. Another very important piece is that they controlled last-mile delivery and owned customer data which meant they could ensure that the customer is satisfied and use that data to expand their business,” added Gupta.

However, Sehaj Singh Kukreja and Tushar Anand, Co-founders of Cheferd Food, home to Pizza On My Plate, feels that in terms of taste and product there wasn’t a great deal of variety that was being offered which eventually made customers switch to homegrown pizza brands. 

Can Indian brands overgrow the market share of International Pizza brands?

While innovation, either in product, service or experience does not depend on the size of the company doing it, one expects it to happen from the big players in the field given the resources and access to data they have. On the home front though, smaller pizza players are wooing customers as they are not bound by international standards or rigidity of processes that govern the operations of multinational players.

As per various industry reviews, Domino’s enjoys a 50 to 55 percent market share in the pizza segment and the balance is shared by Pizza Hut and homegrown brands

According to Jain, overtaking the market share of a brand with the scale of Domino’s is such a large objective that it would be arrogant to set that as the initial objective. “I think, instead, the objective is simply to continue growing the market for customers who have an affinity for higher-quality, innovative pizza, and to grow that both organically and inorganically. Over a long enough time frame, we may be able to give the global behemoths a run for their money, but it will take time,” he further added. 

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At 1441 Pizzeria, the management team has seen the growth towards homegrown pizzas post-Covid, where people sitting at home have become far more conscious of the quality of food they consume and for more willing to experiment with new brands and price is not the only determinant. 

While international pizza brands were responsible for creating the pizza eating culture in India, the excitement in the category is coming from homegrown players who are willing to experiment. International players seem to have overused the fast food concept and local players are busy reaping the benefits of that.