American founder building ₹100 Crore Burrito empire in India 🌯
American founder building ₹100 Crore Burrito empire in India 🌯
How California Burrito is giving Taco Bell a run for its money!
But before we get into that, I have an update for you. Over this year, we worked on creating advanced learning programs - that we call CRAFTs at GrowthX. These are taught by world-class leaders from top product companies like Apple, Netflix, Microsoft, CRED, Razorpay, Amazon & more.
The California Burrito Story ✨
California Burrito is not a US company or a Mexican company, but a desi startup from our very own Namma Bengaluru. A rare startup story where an American left his home & went bullish to build for the Indian consumer. It makes more than ₹100 crores of revenue and profitably runs 50+ locations in India. Let’s dive—
What are India’s 3 QSR waves?
When Bert came to India in 2010, he saw that India was stuck in the second QSR wave. What is this second QSR wave? See, if you zoom out, you’ll see that India has gone through 3 QSR waves in the last 4 decades —
1st Wave (1991 - 2010): Entry of legacy brands with budget menus to figure a product market fit (PMF) in top metro cities and Indians went out once a week.
2nd Wave (2010 - 2016): Premiumisation kicked in and higher AOV brands like Starbucks entered India, diverse palette adoption, and desi brands’ entered.
3rd Wave (2016 - 2024): Popularity of Cloud Kitchens, excessive Tier 2 & 3 penetration, and high eating out frequency.
So what did California Burrito crack?
Cracking product & format depth.
The company saw a big whitespace in 2011. No one was talking about Mexican Food except Taco Bell which entered the country in 2010. Bert observed similarities between Indian & Mexican food — common ingredients like rice & rajma, and similarity b/w tortillas and rotis/chapatis. And voila! The category choice was done.
The company went for a Fast Casual Restaurant (FCR) format — Subway is the biggest example of this in the country. In FCR, the ingredients are much fresher than QSR, the serving time is a little higher, & customization is done for each order.
They also targeted a different customer. The ICP (Ideal Customer Profile) of Taco Bell & California Burrito is different —
Taco Bell targets families & groups with its Indianised tasty menus.
California Burrito targets a person who wants a healthy meal choice by charging a little premium for ingredients. Ps. we compared the prices of cheapest Tacos & Burritos of both brands👇
Unique distribution model.
This is where the story gets tastier — the company has ruled out the franchise plan. All of their ~50 stores follow a COCO Model – company owned company operated model — where the company both owns and runs the store by itself. So while Taco Bell India has 120+ stores using the franchise model, they have almost half the scale with all under their control. Masterstroke? Indeed!
Full Ownership → Slow Scaling → Obsessive Quality Control → Loyal Fans
Fun Fact: Even after 13-14 years - company has ONLY expanded to 4 top cities like Bengaluru, Hyderabad, Chennai & Delhi NCR. They are all in on mature markets.
Getting ingredients right.
See, the one thing that differentiates the taste of a Taco in India vs. in the US or Mexico is the ingredient. Better Ingredients → Better Taste. Company’s solution for this? Importing the ingredients:
In 2015, started importing black & pinto beans.
In 2018, imported 500 Hass Avocado trees and planted them here.
Started growing tomatillos on the farms working closely with farmers.
Vertical Integration at max. FYI, Vertical Integration means taking ownership of a specific stage in a supply chain to reduce dependancy on suppliers and costs in the long run.
That’s not all, check the latest episode of GrowthX Wireframe, where we cover The California Burrito business in depth —
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