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Western chains flock to India as fast-food craving

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McDonald's (MCD-N) made its name serving up hamburgers fast, but it took the world's biggest hamburger chain four years to enter India - without its signature dish.

A number of fast-food and cafe chains -- Starbucks (SBUX-Q) and Dunkin Donuts to name just two -- that are flocking to India would do well to take away lessons learned by established rivals such as McDonald's in navigating a market beset with obstacles.

Industry experts say patience and flexibility in a country where dietary traditions rule may well define successful global restaurant brands in India.

The stakes are high, with India's quick-service restaurant market worth $13 billion US and growing roughly 25-30 percent a year, according to Euromonitor and market research firm RNCOS. India's entire food-service market is estimated at $64 billion.

Adapting menus to cater to local dietary needs may be a winning strategy, analysts say. This is not as easy as it seems - Burger King had looked to enter India in 2007-2008, but hit roadblocks when trying to tweak its menu to suit local tastes, according to analysts and several local media reports.

"If you're a global food retailer, you need to have an offering for the Indian consumer ... you cannot push global products," says Pinakiranjan Mishra, partner and national leader for consumer products and retail at Ernst & Young in Mumbai.

"For a select group of consumers you can, but not if you are looking at building a mass presence."
India is the first country where McDonald's decided not to offer beef or pork items. Instead it sells chicken and vegetarian variants to cater to a significant portion of the population that is vegetarian.

Some of its newer competitors such as Denny's Corp. (DENN-Q), which plans to enter India by mid-2012, are following suit.

"We have had to strip beef and pork out of our menu. We have had to customize it completely," said William Edwards, chief executive of EGS, which is handling the international expansion of Denny's, well known for its all-day menu featuring eggs, sausages and pancakes.

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