Taste for chicken whets global chains

Renowned local restaurants nowadays are facing stiff competition from global chicken companies successively entering the market.

Chicken chains have virtually encircled the Turkish market, aiming to tap into the $800 million chain restaurant industry. Some global giants even say they aim to open one new restaurant every week in Turkey while established chains are bracing for tough competition with the new entries.

Kentucky Fried Chicken, which was established in Turkey in 1989, and Popeye’s, which entered the market two years ago, are competing for the top spot. Wienerwald, a German chain that entered Turkey last year, opened 15 restaurants in less than a year and claimed the third spot. Wienerwald also aims to open a new restaurant each week. Portugal’s Nando’s is expanding, and Korea’s BBQ targets 50 stores in the short term.

The growth drive of chicken chain restaurants has opened a new window of opportunity for Turkish entrepreneurs, too. Franchise prices for these chains start from 150,000 euros and may go up to 600,000 euros.

KFC, a pioneer in the field in Turkey, was brought to the market by Turkent, a company of Süzer Holding. The company aims for at least 20 percent growth this year.

Speaking to business daily Referans, Turkent executives said 2009 was a year in which targets were attained. “Newcomers are expanding in the market,” they said. “This is positive to develop the sector and elevate standards. We believe a just and qualified competitive environment will benefit the customer.”

Popeye’s, launched in Turkey in August 2008, was brought by Tab Gıda, which is also the Turkey representative of Burger King. “We plan to launch 15 new stores this year,” said Caner Dikici, the managing director of Tab Gıda. “There is a big gap in this sector. There are newcomers, but we are not in the same segment as they are. We are in the fast food segment, and here the competition is between KFC and us.” The target customer profile is young, he said, adding that the average spending amount per capita at Popeye’s stores is 10 Turkish Liras.

Chicken ranks as fifth

Wienerwald, which stepped into the market last year, has invested more than 6.5 million euros until today. The number of its restaurants stands at 15 while nine are currently being constructed. Kaan Bilbay, a representative of Wienerwald in Turkey, said the firm plans to close the year with 50 to 55 restaurants. “Starting from April, we plan to launch one store every week,” he said. “Chicken stands at number five in Turkey’s food sector, after döner, kebab, hamburger and pizza. Our customers have an average per capita spending of between 18 and 25 liras.”

Nando’s joined the crowd last year, with its first restaurant at the Cevahir Shopping Center in Istanbul. The company plans to launch its second store on Bağdat Street, on the Asian side of Istanbul, while in two month’s time a third Istanbul restaurant will open. Gökçe Yugun, the Nando’s marketing director, said the company aims to close the year with 10 restaurants. “In five years, we plan to invest $50 million in Turkey and launch 60 restaurants,” Yugun said. “The sector has not reached saturation in brands yet.”

The newcomer among these chains is South Korea’s BBQ Chicken. The brand was brought to Turkey by Mehmet Üçeş, who owns the textile company Üçeş Textile. Having invested $2 million until today, BBQ aims to reach 50 restaurants in a short time. The brand is owned by South Korea’s Genesis Holding, which has one of the largest chain restaurants in the world. Genesis currently has over 10,000 restaurants operating under 12 different brand names in 30 countries.

According to predictions from Euromonitor, a leading independent provider of business intelligence on industries, countries and consumers, chain restaurants in Turkey will grow 50 percent over the next four years. The sector currently has 3,400 sales points. The share of organized fast food chains represents 13 percent in the overall sector. Thus, the growth potential is significantly high.