Mukesh Ambani to enter the Chicken Business

Reliance Industries Limited (RIL) is causing quite a stir in the market as it announced its intention to start and operate an exclusive chicken restaurant chain in India. Mukesh Ambani, through Reliance Retail has bought a 45 percent stake Two Sisters Food India(TSFI); a subsidiary of England basedTwo Sisters Food Group Ltd (2SFG). 2SFG, run by Ranjit Singh Boparan, is basically a chicken products company. Confirming the move, a source close to the development told TOI that the JV is setting up a plant to process chicken, fish and meat products. “Reliance Retail has already invested in a state-of-the-art food innovation lab to support new products,” he said.

2SFG supply retail chains, food processing and service industries in Europe with meat, chicken and fish products. The new alliance plans to enter the highly lucrative QSR (Quick service restaurant) segment in India and sell only chicken products. The new restaurant chain will be christened, ‘Chicken Came First.’2SFG is based in the Asian heartland of England – Birmingham. It was established in 1993 and has grown from a local brand to a truly international one. The company has manufacturing installations all over Europe including ones in Netherlands, Ireland and Poland. The company employs over 24,000 people and generated sales of 3 billion pounds last year. 2SFG was ranked 19th on the 2013 Sunday Times Top Track 100.

TSFI will supply Reliance Retail with chilled and frozen chicken products to begin with. After this, the Reliance Retail and TFSI joint venture, Chicken Came First will begin operations. This chain of restaurants will hope to make early in-roads into the Rs. 7,000 crore food services market and will stand out of the crowd with its specialized menu that caters specifically to the Indian consumer. The fact that MukeshAmbani owned Reliance Retail venturing into the QSR segment is not a surprising one; the sector is expected to grow at 30% YoY and would represent a very healthy revenue stream and could generate huge profits. It’s interesting to note that MukeshAmbani is backing this venture even though he is a vegetarian. This is a clear sign of it being a purely business-based decision.

The local QSR market is dominated by globally present brands. This market, at 63%, or 3,400 crore, projected to grow by 30% due to growth in Tier 2 and Tier 3 cities. CRISIL estimates annual spending on restaurants in these cities to grow by up to 150% to Rs 3,750 crores per home.

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