Giant American retailer lands on Australian stores, but will shoppers embrace its sweet treats?
Friday, January 18, 2019/
Bansal Group, the family-owned business behind the expansion of Carls Jr. Down Under, is taking a gamble on Australia’s sweet tooth.
Owners Gaurav and Vishal Bansal have inked a deal with Focus Brands, the American parent of baked goods chain Cinnabon, to expand the brand into Australia.
Doing so will throw the Bansals right into the middle of Australia’s highly-competitive quick-service-restaurants sector, with established local chains such as Gloria Jeans and Muffin Break on either side.
But after 12 months making American fast food work locally, the Queensland-based business feels there’s room for something new in the space, outlining plans to open 50 Australian Cinnabon stores over the next five years.
Cinnabon, known for a cinnamon scroll product covered in icing, has over a thousand bakeries worldwide.
The first Australian store will open in South East Queensland, but Melbourne is on the cards by 2021 after an initial test-and-learn phase.
The key question facing the Bansals is whether the increasingly health-conscious Australian market will reward a baked goods chain. After all, cafe business Max Brenner, whose offer was also focused on sweet treats, collapsed just a few months ago.
Shawn Kerr, Bansal’s general manager, thinks they will, citing initial interest on social media, which has seen over ten thousand people flock to a new Facebook page for the venture in the last few weeks, as an early indicator.
“It’s showing there’s a consumer want, it’s a global brand and a globally known product,” he tells SmartCompany.
IBISWorld senior industry analyst Bao Vuong says there are certainly risks facing Cinnabon in Australia, but if the Bansals can zone in on a premium offer there’s money to be made.
“The industry itself has faced considerable challenges over the last five years … but we expect it to perform modestly over the next five,” Vuong tells SmartCompany.
“Health consciousness is still a huge factor in the industry, but it isn’t the only factor, people are looking for more premium products in general.”
The Bansals understand Cinnabon itself won’t be enough to tempt Australian consumers though. While Kerr says Bansal isn’t necessarily trying to “Australianise” the global brand, there are some elements of the business where Australian tastes require some extra consideration.
“We’re trying to create an offer people in Australia can recognise,” Shawn Kerr, Bansal’s general manager, tells SmartCompany.
“We’re very keen to have a variety of products that are different and allow customers to pick and choose different toppings.”
In particular, the internationally high standard for coffee in Australia has warranted some planning.
“Coffee indulgence or coffee snobbery is certainly very important, we need to ensure the coffee is right, so we’re in discussions with three to four local coffee people in Australia,” Kerr says.
The concept will be sub-franchised by Bansal Group, but the company will operate some of the stores itself as well.
There are also potential pop-up stores on the horizon as the brand looks at laying a groundwork for future expansion.
Social media mishaps: Why businesses should think twice before cracking jokes online Catriona Pollard CP Communications founder
An ‘opportunity-hunting’ generation: Here's what millennial workers need and want Karen Gately Corporate Dojo founder
Spilling the beans: Why inviting someone to 'grab a coffee' is disingenuous and unnecessary Sue Parker DARE Group founder
The 10 most unemployable job titles on LinkedIn Ian Whitworth Scene Change co-founder
How Emily McWaters manages her Sydney-based business from Kangaroo Island Emily McWaters The Hamper Emporium chief
Why 'Orwellian' performance monitoring is crucial to building an ethical company culture Michael Kodari Kodari Securities chief