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Contents
Snack Foods 3
4
Indian Snack Food
4
USA Demographics
6
US Snack Food Industry
7
Snack Food Franchises
7
Glimpse of Snack Food Franchises in USA
10
Franchise Business- Things to remember
12
References
Snack Foods:
The snack food industry sector consists of establishments primarily engaged in manufacturing of
salted snacks, such as potato chips, corn chips, tortilla chips, popped popcorn, pretzels and
similar snacks (NAICS 311919) and salted and roasted nuts and seeds (NAICS 311911). The
snack food industry sector also includes consumer-ready packaged chocolate and non-chocolate
candies (NAICS 311320, 311330 and 311340), cookies and crackers (NAICS 311821),
unpopped popcorn, and meat snacks.
The decline of formal lunchtime eating is creating new market segments and strong growth in the snack
food market. The snack market is enjoying strong growth due to a range of new products that are
positioned to exploit these changing lifestyles.It has been apparent for some years that increasing time
pressures on consumers have been the main force behind a shift away from traditional mealtimes. Meal
consumption is now fragmented into:
• More frequent and smaller "meals" (the term “grazing” is often used to describe this behaviour)
• Taken in more diverse locations
Datamonitor's report, “Hand-held Snacks”, examines the UK hand-held savoury snacks sector. It reveals
that "on-the-go" eating and snacking are on the increase.
•On-the-move
•Multitasking (for example, eating while working), and
• Leisure
Hand-held snacks are well suited for consumption in all three situations and there is high consumer
demand. As more consumers take to eating while engaged in other activities, such as office work, playing
computer games or commuting, hand-held snacks are ideally poised to exploit this trend.
The American lifestyle's drain on free-time to prepare healthy, nutritious meals is driving people ever more
towards convenience foods, that highlights the potential for healthy snacking. According to the report,
"On-The-Go Eating in the US: Consumer, Foodservice, Retailing & Marketing Trends" from Packaged
Facts, states that although 65 percent of consumers are trying to eat healthier, 33 percent said they didn't
have time to prepare or eat healthy meals.
Indeed, the report claims that the time issue drove 49 million Americans to fast-food solutions and 41
million to store-made, pre-cooked meals last fall alone. The report also indicates that 33 percent of
Americans regularly skip meals and graze on snack foods, in part fuelled by media reports about the
health and weight-loss advantages of eating
A recent report on the market by Information Resources Inc (IRI) stated that the snacking industry was
facing increased competition with new players previously separate from the snacking arena are now
coming forward and claiming a share of the marketplace. Examples include cereal, which is increasingly
being positioned as an evening snack, as well as the development of a 'snack' concept by fast food
chains. But despite the challenges the industry faces, there are three main areas of growth opportunity
that snack manufacturers can focus on in order to keep consumers in the market, said IRI: product
development, marketing and merchandising. Product development is broken down into three main
categories, with health topping the list. This taps into wellness and weight management, as well as
products with nutritional and functional benefits.
The market in India is diverse and large with over 1,000 different snack products and some 300 types of
savouries. Potato-based snacks, and in particular potato chips, are the largest product segment, holding
an 85%-share of the salty snack market, Around 1,000 snack items and 300 types of savouries are sold in
India. Potato chips and potato-based products are the largest product category with over 85 per cent
share of the salty snack market, followed by snack nuts, chickpeas and other pulse/cereals-based
savoury snacks.
India's snacks market is estimated to be worth $3 billion, with the organised segment accounting for half
the market share and growing at a rate of 15-20 per cent a year. The unorganised snack food market is
worth $1.56 billion and is growing at 7-8 per cent, the report said.
USA Demographics:
Population of the United States by Race and Hispanic Origin, 2000 Census Results
Current total U.S. population (284,800,000) is from the U.S. Census Bureau, and is based on current
growth rates applied to the 2000 Census figures.
Total % of
population population
NOTE: Percentages add up to more than 100% because Hispanics may be of any race and are therefore
counted under more than one category.
Source: U.S. Census Bureau, Census 2000.
Population, 2006 estimate 299,398,484
Age Structure
The United States has seen a rapid growth in its elderly population during the 20th century. The number
of Americans aged 65 and older climbed to 35 million in 2000, compared with 3.1 million in 1900. For the
same years, the ratio of elderly Americans to the total population jumped from one in 25 to one in eight.
Between 1990 and 2020, the population aged 65 to 74 is projected to grow 74 percent.
The elderly population explosion is a result of impressive increases in life expectancy. The median age
(with half of all Americans above and half below) reached 35.3 years in 2000.
Population Growth
Some parts of the nation are growing much faster than others. The fastest growth, as usual, was
concentrated in the West, where the population rose 19.7 % between 1990 and 2000. Close behind was
the South (17.3%). Growing more slowly were the Midwest (7.9%) and the Northeast (5.5%).
Nevada remained the nation's fastest-growing state, with its population increasing 19.7% between 1990
and 2000. Nevada's population had climbed by a staggering 66.3.% since April 1, 1990 Arizona was 2d in
population growth during the recent 10-year period, with a 40% increase, followed by Colorado (30.6% ),
Utah (29.6%) and Idaho (28.5%). California recorded the largest numeric increase of any state: 4.1 million
people.
This mature industry has grown at a modest pace, with continued product innovation and the increasing
amount of consumers who are snacking more frequently contributing to recent growth. As consumers
continue to move towards healthier snacking, a large majority of major players are taking advantage of
this opportunity to innovate products in the natural and organic arena.
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Despite the adverse publicity over snack food, franchises in this area are going from strength to
strength. Healthy alternatives such as the sandwich specialist Subway have emerged, and even the
traditional fast food franchises have introduced low-fat alternatives such as salads.
And while the typical burger-serving snack food franchises still exist, the sector has diversified into many
different types of cuisine - snack food now includes noodle and salad bar franchises as well as chip
shops.
Snack food is typically easy to prepare and franchises do not require a high level of expertise, although
food hygiene certifications and some form of catering experience is a great advantage among those
seeking a snack food franchise.
Started by Raymond Albert Kroc in 1955, McDonald’s has always been a franchising company and has
relied on its Owner/Operators to play a major role in the System’s success. McDonald’s remains
committed to franchising as a predominant way of doing business. McDonald's Owner/Operators share
their perspective in these areas: Training, McFamily, Customer Satisfaction, Social Responsibility and
Support.
Kentucky Fried Chicken, or KFC, is a chain of fast food restaurants based in Louisville, Kentucky. KFC
has been a wholly owned subsidiary of Yum! Brands since 2002. The chain also advertises itself as
Poulet Frit du Kentucky or PFK in the province of Quebec in Canada.
KFC primarily sells chicken in form of pieces, wraps, salads and burgers. While its primary focus is fried
chicken KFC also offers a line of roasted chicken products, sides and desserts. Outside of North America,
KFC offers beef based products such as burgers or kebabs, pork based products such as ribs and other
regional fare. The popularity and novelty of KFC has led to the general formula of the fried chicken fast-
food restaurant being copied by restaurant owners worldwide.
The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952. The
company adopted the abbreviated form of its name, KFC, in 1991. Starting in April 2007, the company
began using its original appellation of Kentucky Fried Chicken again for its signage, packaging and
advertisements in the United States as part of a new corporate re-branding program; newer and
remodeled restaurants will have the new logo and name while older stores will continue to use the 1991
signage. Additionally, the company continues to use the abbreviation KFC freely in its advertising.
Internationally the company is still known as KFC.
Burger King (NYSE: BKC), often abbreviated to BK, is a global chain of hamburger fast food restaurants.
The first restaurant was opened in Miami, Florida in 1954 by James McLamore and David Edgerton, and
has since used several variations of franchising to expand its operations. Burger King Holdings is the
parent company of Burger King; in the United States it operates under the Burger King Brands title while
internationally it operates under the Burger King Corporation banner. It is a publicly traded company with
investment firms of TPG Capital, L.P., Bain Capital, and Goldman Sachs each owning about 25% of the
company.
At the end of its fiscal year 2007, Burger King reported that there are more than 11,300 outlets in 69
countries; 66% are in the United States and 90% are privately owned and operated. The company has
more than 37,000 employees serving approximately 11.4 million customers daily. In North America,
franchises are licensed on a per store basis, while in several international locations licenses are sold on a
regional basis with franchises owning exclusive development rights for the region or country. These
regional franchises are known as master franchises, and are responsible for opening new restaurants,
licensing new third party operators, and performing standards oversight of all restaurant locations in these
countries.
Heidi's Brooklyn Deli Franchise -A New York Style Deli serving high
quality sandwiches, wraps, soups, smoothies and assorted desserts at
affordable prices. The restaurants are built so that the customers can
watch their sandwiches being made to order. Heidi’s Brooklyn Deli
strives to provide superior products that exceed the customer’s
expectations.
A) Selection Criteria
1. Management
2. Financial
3. Location
4. Expertise
1. Service agreement
2. Royalty terms
5. Brand promotion
6. Infrastructure
7. Training
8. Reporting
3. Franchisor venue provision : Dispute to be litigated & arbitrated in the home country of the
franchisor .
5. Non reciprocal non competition convents. : Oppressive post terms non competitive convents
in terms of duration & geographical limits.
9. Kickback clause
1. Brand conflict
2. Service degradation
3. Skill upgrade
E) Legal terms
1. Arbitration clause
2. Termination clause
3. Renewal clause
6. Inspection by Franchisor;
7. Termination clause
Incompleteness: Lack of proficiency in delivering & communicating. Training & grooming internal
customer.
Subjectivity: Describing the service differently by different consumer as per their experience leading to
biased interpretation. Build uniformity & standard communication.
References
• International Marketing: Onkvisit & Shaw
• www.economictimes.indiatimes.com
• www.fas.usda.gov
• www.franchisesales.com
• www.ibisworld.com
• www.mcdonalds.com
• www.quickfacts.census.gov
• www.tutor2u.net
• www.usa.usembassy.de
• www.wikipdia.org
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