Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Finally, India has got its first Krispy Kreme Doughnut Inc. (KKD - Snapshot Report) franchised outlet in the city of Bangalore. The latest opening came in the wake of the signing of a development deal between Krispy Kreme and Citymax Hotels Pvt. Ltd in June 2012.

Per the deal, over the next five years, Citymax Hotels will unveil 80 outlets across the southern and western part of India. Apart from Krispy’s signature menus, the Indian outlets will be offering some local variations to cater to the Indian population.  

Citymax Hotels Pvt. Ltd., a branch of Dubai-based Landmark Group, boasts superior local market knowledge. The company has a proven track record of venturing into the premium retail industry as well as has the expertise to operate food and beverage companies within the Indian and the Middle East market.

Armed with the strong know-how of Indian food habits, the franchisee is also hopeful of collaborating with a global brand like Krispy Kreme and expects to spread its menu offering successfully among brand conscious consumers.

We believe Bangalore is a strategic fit for entering the country. It is India's 3rd largest city and home to many IT firms, well known universities and research institutes. This city, because of its extreme contribution to the IT sector of the country, is often regarded as the Silicon Valley of India.

However, the Citymax deal followed Krispy Kreme’s earlier pact with the franchisee Bedrock Food Company Pvt. Ltd. which was signed a month before, focusing on expansion in Northern Indian.  

These alliances reflect Krispy Kreme’s intent to make India one of the prime markets for international expansion considering stepped up economic growth and under-penetration of quick-service restaurants in that country as against the saturated North American countries.

According to a report by the U.S. Commercial Service, the middle income population in India is burgeoning and will grow 10 times by 2025. Indians arguably have a sweet tooth.

The café market in India is growing at a compounded annual rate of 25% over the last five years with Café Coffee Day leading the segment followed by Barista Lavazza and UK-based Costa Coffee, according to an October 2011 report by Technopak Advisors Pvt. Ltd, a Delhi-based retail and consumer goods consultancy firm. This along with the growing income of the larger populace makes India a lucrative investment proposition for Krispy Kreme.

However, the Indian market is not free from competition. Following the growing demand for coffee products, another U.S. coffee behemoth Starbucks Corporation (SBUX - Analyst Report) entered the market in Oct 2012. Yet another peer, Dunkin' Brands Group Inc.’s (DNKN - Snapshot Report) Dunkin Donuts also ventured into the market In May 2012.

There is also Mondelez International Inc.  (MDLZ - Analyst Report) which is operating in the Indian market through Cadbury branded chocolates. Apart from these industry equivalents, there are also local confectioneries and brewers currently serving the market.


Krispy Kreme currently retains a Zacks Rank #1 (Strong Buy). Other restaurateurs currently performing well include Bob Evans Farms Inc. (BOBE) which holds a Zacks Rank #1 and AFC Enterprises Inc. which carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%