Myanmar’s fast-food industry attracts US attention as sanctions ease

30-May-2016 - Last updated on 31-May-2016 at 12:12 GMT

Western fast-food joints could soon be found by the outskirts of the ancient city of Bagan

Related tags Myanmar Fast food Kfc Beef Lamb Pork Poultry

US fast-food firms could flood into Myanmar after the easing of US-imposed sanctions to improve bilateral trade and allow more financial transactions to take place.

The US Treasury, for instance, has removed from a blacklist seven state-owned enterprises and three state-owned banks – the Myanma Economic Bank, Myanmar Foreign Trade Bank, and Myanma Investment and Commercial Bank. And the US government has eased restrictions on trade shipments to ports and airports in Mayanmar, formerly known as Burma.

This will only help the first two US fast food chains to open outlets in Myanmar: Pizza Hut – run by YUM! Brands, Jardine CM Restaurant Group Company (JCMRG), a subsidiary of Hong Kong-based Jardine Matheson, and Myanmar’s City Mart Holding Co (CMHL); and KFC, which is being operated by local conglomerate Yoma Strategic Holdings.

Pizza Hut was opened last October (2015) in Yangon’s affluent Bahan township. The opening of KFC’s first branch in downtown Yangon on 1 July 2015 attracted huge crowds; back in 2013 a photo of a supposed KFC outlet caused a major stir on social media and in local newspapers. KFC opened a second branch in Yangon’s Hleydan township four months later and currently has five branches in Yangon, including one at Myanmar commercial capital’s Yangon International Airport, which was blessed by monks during its opening ceremony on 6 April.

Myanmar frozen out of trade

“All KFC chickens are sourced locally in Myanmar,” Nyan Kyaw, head of marketing at KFC Myanmar, told GlobalMeatNews. “This has been a project in the making since 2013 and has been a challenge given the current state of the supply chain in Myanmar. However, although we do not disclose the exact name of our supplier, our partner has been willing to work with us to ensure the sourcing of quality chicken that meets KFC’s international standards.”

He added that while Myanmar’s supply chain system was still in its infancy, particularly in terms of the cold chain, “fortunately, there are a few players who are bringing their international expertise to Myanmar now, so that has helped us to operate here”. “But due to these challenges, the cost of goods are higher than what you would pay in similar industries overseas.”

Despite the absence of international fast food chains, due to sanctions and isolationist policies, Asian chains already have a presence, with fried chicken especially being a popular fast food snack in Myanmar. Thailand’s CP brand, from the Charoen Pokphand Group, operates ubiquitous mini streetside chicken stalls alongside those locally owned.

South Korea’s Lotteria burger chain opened its first store in 2013 and currently has more than 20 branches nationwide, while another South Korean franchise, BBQ Chicken, also established a presence in 2013. Malaysia’s fried chicken specialist Marrybrown also entered the border market in 2013 and has a presence in Yangon and Mandalay.

KFC coy

When asked how KFC competes for market share against these more established fast food chicken franchises, Kyaw said: “At KFC, we are very devoted to serving the best-tasting chicken and maintaining a high standard in food safety. We believe achieving this goal would be the measure of our success in Myanmar and will distinguish us from other F&B [food and beverage] offerings.”

Kyaw would not comment on specific plans for expansion, but said that KFC’s “vision is for everyone in Myanmar to be able to experience the great taste of KFC”. “As such, we look forward to expanding all over Myanmar while keeping our brand accessible to the masses.”

As for Pizza Hut, its brand “awareness was present even before entering the market since the brand is also established in neighbouring countries”, said Simon Arnold, general manager of Jardine CM Restaurant Group Company (JCMRG).

Pizza Hut declined to comment on specifics relating to sourcing its meat, but Arnold said: “We are committed to supporting local supply chain and businesses. We are also working with local suppliers where possible, ensuring we maintain Pizza Hut’s international quality standards.”

Arnold added that Pizza Hut’s plans to open 20 stores in Myanmar in the next five years were on track, with three new stores opening by the end of this year.