With 'veg' outlets, McDonald's targets pilgrims

Like many other Western food retailers, McDonald's Corp. has long adapted its menu to cater to local tastes and religious practices. In India, this has meant a lot more spice and very little meat.

In McDonald's Indian menu, for instance, there's no trace of beef or pork, which are taboo for Hindus and Muslims, respectively. And with the country's significant number of strict vegetarians in mind, McDonald's outlets in India already have separate kitchen areas for cooking meat and vegetarian dishes.

On Tuesday, the burger giant took its strategy a step further, announcing it had chosen India to open its first-ever all-vegetarian restaurants.

But with Mc Donald's already catering to the nation's vegetarians, why open vegetarian-only restaurants?

It appears McDonald's saw an opportunity in a very specific market: religious pilgrims. "The new restaurants in pilgrimage areas will be vegetarian-only because of the specific area and customer base," a company spokeswoman said in a statement.

Many religious pilgrims are strictly vegetarian and could take offence if others around them ate non-vegetarian food. Meat consumption is forbidden in most religious sites to begin with and in surrounding areas a "non-vegetarian" restaurant would feel very out of place – and likely frowned upon.

McDonald's first veg-only restaurant is set to open sometime next year near Amritsar's Golden Temple, the Sikh religion's holiest site.

More will follow in the state of Jammu and Kashmir, where McDonald's is targeting the Hindu shrine of Vaishno Devi. The numbers are tempting: every year, around 10 million devotees trek there to pay their respect to the female goddess Shakti.

The "veg" options on McDonald's Indian menu already range from the potato-based McAloo Tikki, a best-seller, to the McSpicy Paneer, staple Indian cottage cheese in a sesame seed bun. McDonald's is keen to increase its veggie options, and recently launched the unfortunately named McEgg, basically a fried egg in a bun.

The question is how many of these devotees will be drawn to the golden arches. McDonald's, like many food retailers, views India's 1.2 billion population as a major potential market. So far, though, the company has fewer than 300 outlets in the country out of 33,000 restaurants world-wide.

McDonald's has worked to keep its prices low in India but they're still out of reach for many. With prices starting at 59 rupees ($1) for a vegetarian burger, McDonald's consumer base in India is largely middle-class. Compare that to a vegetable samosa, a roadside staple, which costs around five rupees, sometimes even less.

McDonald's is not the only Western food retailer to have "Indianized" its menu. Earlier this year Dunkin' Donuts launched in India with options ranging from mango doughnuts to lychee-based drinks. For those who don't eat eggs for religious reasons – for many, they count as non-veg – Dunkin' introduced a range of egg-less doughnuts.

Many expect Starbucks to roll out an Indian-influenced menu when it opens its first coffee shop in India, which is expected soon. Our guess it that it will look a lot like this.

(Published by WSJ - September 5, 2012)