Two US coffee titans are squaring up for a turf war in India.
Barely a month after Starbucks formed a partnership with India's Tata Coffee to launch its outlets in the country, Dunkin' Donuts unveiled similar plans to challenge its arch rival.
The US$6 billion (Dh22.03bn) company, owned by the private equity companies Bain Capital, Carlyle Group and Thomas H Lee Partners, announced a franchise deal for an undeclared sum with the Mumbai-listed Jubilant Foodworks to open 500 Dunkin' Donuts outlets around the country in the next 15 years. The first of these is expected to become operational early next year.
Dunkin' Donuts described the deal as its "largest-ever international store-development commitment".
Both rivals have divergent market goals. Starbucks plans to tap into the affluent premium segment, while Dunkin' Donuts is keen to woo the masses.
But their presence follows a common aim: to capitalise on India's growing market for restaurants.
Indians spend an estimated $11.2bn on restaurant meals a year, a market share that has lured several international chains including McDonald's, Yum, KFC, Pizza Hut, Domino's Pizza and Taco Bell in recent years.
"Expansion to India is an integral part of Dunkin' Donuts international growth plan," says Nigel Travis, the chief executive of the company that has 9,700 outlets across 31 countries.
India's young consuming class, with its growing disposable income, offers significant opportunities for investment. The food industry in Asia's third-largest economy is expected to grow to $258bn from the current $181bn in the next four years, the Federation of Indian Chambers of Commerce and Industry says.
The fast-food market is growing at an annual rate of between 25 and 30 per cent, according to a report titled Indian Fast Food Market Analysis, released last September by the market researcher RNCOS.
Food-related businesses attracted foreign direct investments valued at an estimated 5.76 billion rupees (Dh468.9 million) in the eight months to the end of last November, Harish Rawat, the minister of state for food-processing industries, told parliament recently.
Foreign chains are more than willing to customise their brands to cater for a wide cross section of Indian culinary habits.
Jubilant Foodworks, which is also the franchisee for Domino's Pizza in India, Sri Lanka, Nepal and Bangladesh, has added Indian flavours to its menu to entice local customers.
Peppy paneer, a pizza sprinkled with sliced pieces of cottage cheese laced with peppers, and keema do pyaaza, which includes a topping of minced meat marinated in spices, are just some of its localised recipes.
It is a strategy that has paid rich dividends. The group opened 54 of its 364 outlets in the nine months to the end of December alone. Revenues grew by 61 per cent in this period compared with the same period in 2009.
Jubilant Foodworks says it will pursue a similar strategy for Dunkin' Donuts.
To launch a coffee chain in a country where tea is a much preferred beverage may appear a tricky business, but the company says customers should expect to find more than just coffee and doughnuts on its menu.
"Dunkin' provides flexibility in localising recipes and we have food and culinary strengths which we intend to leverage," Shyam Bhartia and Hari Bhartia, the joint chairmen of Jubilant Foodworks, said in a statement.
The chain's sugary treats, observers say, could compete with India's traditional sweets market dominated by millions of family stores. Many of them offer the finest range of regional recipes.
Gulab jamun, a deep-fried dough ball dunked in sugar syrup, melts in your mouth. Mithai - creamy slabs made from condensed milk and clarified butter, and flavoured with cashews, pistachio and saffron - are packed with calories but can be too tempting to resist.
The sweets industry has been buoyed by the low price of sugar, one commodity for which prices have softened because of strong production.
India is the world's top sugar consumer and its second-biggest producer after Brazil. The country's sugar consumption is forecast to touch 23 million tonnes in the year to the end of September, while the output is set to total 24.5 million tonnes, Bloomberg reports.
But growing affluence and aspirations in India are giving rise to new dietary habits and consumption patterns that are troubling the traditional sweets industry.
A 2009 report by the market research agency Datamonitor titled Product insights: Confectionery in India revealed that the growing demand for products such as chocolates and treats from branded chains are fast replacing traditional sweets during Indian festivals.
In 2009, sales of sweets in New Delhi during Diwali - the festival of lights in which sweets are exchanged between families - fell 40 per cent from the previous year, according to a survey by the Associated Chambers of Commerce and Industry of India. The decline since then has continued, experts say.
Sweets are also losing their appeal because of rising cases of obesity and related health conditions, the experts add. India has the world's largest number of diabetes patients at 50.8 million.
A report by Nielsen, the marketing research company, says "aspirational products" such as branded chocolates and confectioneries will drive the future growth of India's consumer products industry.
Cadbury India, a leading confectionery company now owned by Kraft Foods of the US, last month reported a record revenue growth of 27 per cent last year for sales of 25bn rupees.
But no one is predicting the demise of Indian sweets, despite the growing prominence of foreign restaurant chains. And those chains face their own competition.
Dunkin' Donuts, analysts say, faces stiffer competition from Mad Over Donuts, a Singapore-based chain expanding fast in India, and Krispy Kreme, a company based in the US that is also keen to woo India's sweets lovers.
business@thenational.ae
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
UAE currency: the story behind the money in your pockets
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
MATCH INFO
Asian Champions League, last 16, first leg:
Al Ain 2 Al Duhail 4
Second leg:
Tuesday, Abdullah bin Khalifa Stadium, Doha. Kick off 7.30pm
DUNE%3A%20PART%20TWO
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In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
