Singapore’s Italian food franchise, Pastamania, has officially opened its doors in Yangon – adding more pasta to the menu of foreign food now on offer in the city.
The last few years have seen an influx of international competition in Myanmar’s food and beverage industry, from the arrival of American fried chicken giant KFC to the string of Mexican restaurants that have popped up downtown.
Now, Pastamania – with more than 50 restaurants across nine countries – has moved into Yangon to boost the city’s noodle portfolio to include more Italian pastas. Data from Daiwa Institute of Research has put the Myanmar restaurant market at nearly US$3 billion, according to a statement released at the restaurant’s February 27 launch.
Commonwealth Capital, the Singaporean investment firm behind Pastamania, chose to partner with a subsidiary of a local group Bawga Theiddhi to establish its first Pastamania eatery in Myanmar. The restaurant took about one year to plan and set up, with investment eclipsing US$1 million.
Ko Aye Chan Ko Ko, managing director of Pastamania franchisee Root of Asia, said he ate Pastamania every day when he was studying in Singapore. “I felt that it was the right time to bring Pastamania here to educate the people that pasta is the new rice.”
That idea may go against the grain, and for now has a long road to critical mass, as pasta options are limited compared to rice dishes popular at Yangon’s curry stands and tea shops.
Mr Lim said Pastamania, as a pasta focused food and beverage brand, now wades into a “blue ocean” – a business term for a wide-open market.
However, Myanmar has started shedding its status as an untapped market. Yangon is now dotted with international restaurant chains. Kentucky Fried Chicken landed in Myanmar last year, and now has four restaurants across the city.
“We are now a long way from the sorry old MacBurger days — when Yangon couldn’t sustain even a single fast food eatery of a reasonable standard. Looking around, today there are dozens,” said Glenloch Advisory partner Nicholas Farrelly. “I’m sure that there will be more to come.”
Pastamania has plans to build five or six outlets over the next few years, according to Mr Lim.
“It’s a very good sign that international companies are still looking at Myanmar as a promising location for their businesses,” said Mr Farrelly. “Key issues related to investment, intellectual property, supply chain, staffing and customer demand have been largely worked out.”
McKinsey Global Institute said in a 2013 report that the country’s consumer class – those with enough income for discretionary spending – could jump to 19 million people within 15 years, which would mean a spike in consumer spending to US$100 billion.
However, a large part of the country’s population would still find it hard to pay for pasta at a premium price.
“Most Myanmar people would struggle to justify paying the high prices,” said Mr Farrelly. The average ticket price for a menu item at Pastamania Yangon is K9000-10,000. “But the popular chains still do very good trade, largely from local customers. At least in Yangon there is no shortage of people with disposable income.”
“The big question for the government and investors is how they go about quickly building up the purchasing power of the masses. In theory, a cashed-up aspirational class is good for business and good for democracy.”
Source: Myanmar Times
