Fried chicken, pizza and now doughnuts – Myanmar’s bellies will soon be fuller with American fare, as famed US doughnut chain Krispy Kreme has revealed plans to roll into the market.
The firm announced a development agreement on August 25 with Singapore’s Doughnut Group Pte Limited to bring 10 Krispy Kreme stores to Myanmar in five years.
Krispy Kreme senior vice president of international Dan Beem said in a statement the company’s move to Myanmar came down to the country’s economic growth and willingness to welcome global brands.
“We see a lot of potential for Krispy Kreme in Myanmar,” he said.
Doughnut Group Pte Limited will be in charge of setting up the shops locally.
“Myanmar is an up-and-coming market with a large population of people who are eager to start getting a taste of iconic brands like Krispy Kreme,” said the firm’s owner, Pote Narittakurn.
Krispy Kreme is not alone in eyeing the largely untapped local fast-food market. The last year has seen American fried-chicken fixture KFC open its first Yangon location with much fanfare, and Pizza Hut is also on its way.
Meanwhile, Singapore’s Italian eatery PastaMania confirmed yesterday with The Myanmar Times that it has kicked off construction on a restaurant on Inya Road in Yangon – the first of five it will set up in the next two years.
Wilson Lim, executive director of international business for PastaMania parent company Commonwealth Capital, described the Myanmar move as a franchise arrangement, and said the firm has chosen Yangon-based Root of Asia Company Limited for the franchise rights.
“Myanmar represents a unique opportunity because of its untapped market potential,” he said. “It is also a young population that can easily embrace new food and beverage concepts.”
Their arrivals mean more to Myanmar than new options for locals looking for a change from traditional dishes.
“KFC is a signpost on the road to economic transformation and global enmeshment,” wrote Glenloch Advisory partner Nicholas Farrelly in a recent editorial for The Myanmar Times. “It is also a signal of something profound for Myanmar society – KFC’s arrival in wet-season Yangon is merely a symptom, a well-managed commercial response to a much bigger trend.”
“The trend to watch is the emergence of Asia’s newest middle class.”
Global brands, ubiquitous elsewhere, are finally making the leap into Myanmar. Factors that held them back in the past – risk, sanctions, capacity constraints – are evolving, making it easier for international brands to enter the market.
They are also drawn by the country’s favourable demographics and burgeoning middle class.
“High-prestige, high-calorie food businesses, particularly those tied to big global chains, see potential for growth in Myanmar,” Mr Farrelly said yesterday.
“They are betting that, like elsewhere in Southeast Asia, Myanmar’s cashed-up classes will queue for a taste of their slick global fare. It’s a formula that has worked almost everywhere else.”
“Krispy Kreme is a full-on product that entices a segment of the population with its fat and sugar,” he added. “Its arrival in Myanmar signals the next phase of the middle class bulge.”
Krispy Kreme sells doughnuts in 24 countries abroad. It opened its first store in Asia 11 years ago in South Korea; more recently, the company has set up shop in nearby markets Bangladesh and Cambodia.
Krispy Kreme registered revenues of more than $490 million for the fiscal year ending in February 2015.