“Business of Indulgence”: How Restaurant Brands can capture the consumers |Restaurant India

In its third avatar, the Indian Restaurant Congress 2013 created a holistic approach on how restaurant brands can capture the imagination and enthusiasm of the consumer to grow rapidly.

Top restaurateurs, policy makers, food service professionals and consultants came together at the Indian Restaurant Congress & Awards 2013 to interact and share their knowledge and experiences on various topics related to customer engagements, food taste, quality, best practices, regulatory issues and future trends in the food service industry. The Congress brought close to 350 professionals from F&B service companies from India and abroad.

A report by National Restaurant Association of India (NRAI) and Technopak reveals that the size of the Food Services market in India is estimated at $48 billion in 2013. This is projected to grow at a CAGR of 11% over the next 5 years to reach $78 billion by 2018. As such the theme of the conference was ‘Indulgence’ and it worked on a 4-tier approach for restaurant business – exceptionally good tasting food, customer experience, remarkably good for bottom line and good business value.

Good Tasting Food :

Consumers actively seek quality from food operators and restaurants. To this AD Singh, MD, Olive Bar & Kitchen, said, “Keep working on your core. Secondly be innovative and keep products fresh to be in people’s mind space; we have been successful over the years through innovation and ideation of concepts. So don’t take your eye off your product (the core) and innovation.”

Talking on the concept of keeping food fresh and tasty, Gaurav Ahuja, COO, Red Ginger Hospitality, said, “Freshly made food add value for money prices. If the taste of the prepared food is not right, nothing can work for a restaurant. People travel long distances just for tasting food. If any amount of marketing or passion from the entrepreneur does not translate into good taste, it is not going to work.”

Speaking on how the current food & Beverage trend is going global, Chef Gautam Mehrishi, Corporate Chef, Sun N Sand Group of Hotels, said, “With the advent of foreign chefs becoming entrepreneurs, the Indian chefs are also inspired by the same; they are not thinking linearly which used to be the case because not too many things used to be changed in food & beverages industry in India. Since the last five years, the thought process has been quite exponential and, with the advent of technology and globalisation, things are changing and Indian cuisine is picking up and is becoming global like Burger Chicken Masala is the national dish of UK. I think within the next five years Indian food is going to make a mark as Chinese food has marked around the globe.

Good for Bottom Line:

Restaurants are now placing stronger emphasis on the consumer’s overall experience with a noticeably improved food service thereby boosting the bottom line. Speaking on this aspect, Anjan Chatterjee, Founder & MD, Specialty Restaurants, said, “Learn from the Domino’s of the world, the McDonald’s of the world, the Pizza Hut of the world; I think one thing at one time – try doing the best way, replicate it, make it scalable, institutionalise it, make it so good and improve it every day so that you have the logistics, the locations and the backend.”

Emphasising the growth factor in the Restaurant industry, Samir Kukreja, President, NRAI, said, “The food service industry continues to grow both in terms of cuisines and concepts from India and abroad. It is growing at a good pace and shows good growth in the next 4-5 years. The slowdown of economy has had an impact on restaurants but the industry is still growing.”

Speaking on the same lines, Brijesh Rathore, Business Director, Diversey Care, said, “The Food and Beverage industry is currently the fastest growing segment in the country. It is growing annually to 20-22 percent and we see a lot of people coming up to open the restaurant, the international chains are coming up and the national chains have massive spending programmes but we are facing many challenges in the industry. Many of the challenges are related to the Government Control and many are of the ways the industry operates.”

Advising entrepreneurs on the challenges, AD Singh of Olive Bar & Kitchen, said, “If you are an entrepreneur who wants to get into the restaurant business, kindly think: our industry is tough; the margins are not good and fairly vulnerable to what is happening to our environment. Most of the people rush to open a restaurant; that’s a big mistake. Take a lot of time on product development – decide what you want to do, how to make it better, what’s the business plan, how you are going to be different from everybody else and what will bring people to you. Get your product right in the product planning stage to make it a success.”

Ajay Kaul, CEO, Jubilant FoodWorks Ltd., said, “I think Indian chains also have the potential of reaching the same level as international chains. It is only a question of outlook and easy availability of funding.” He further added that every single metric has to be built so that every store portrays the satisfaction of the customers with a ‘khushiyon ka meter’ reading. This he believes is the reason why not a single store of his closed in the last six years.

Speaking on how the concept of gourmet dining is taken up by standalone restaurants, Chef Soumya Goswami, Executive Chef and Chef de Cuisine, The Oberoi Group, said, “Gourmet dining is on the rise; it starts with definitely good produce and good ingredients. Standalone restaurants have jumped at the concept and they are giving hotel restaurants a run for their money. There’s a lot more money involved with standalone restaurant because people understand food more. If you have high quality ingredients only then can you transform them into high quality food. Second is the ambience because you cannot expect gourmet dining kind of atmosphere at a very basic minimalistic restaurant. You need gimmickry in terms of ambience to give a luxury feel to the restaurant which I think is more of the standalone restaurants are doing better and better every day.”

Sunil Kallerackal, Chairman, BookyourTable, said, “There is no science to marketing spends on TV, radio and hoardings and get a direct correlation to the footfall. So it is important for restaurants to figure out an efficient way to marketing locally and move on with the digital age. That is where we come in to say that the ROI of marketing will not work the traditional way because there is no scale like an FMCG brand. Indian restaurant industry is a vibrant industry and it is the third largest growing market. It is an exciting space and in the next 5 years we would see a 20% CAGR growth; one who handle challenges will prevail.”

The Feel Good Factor :

Apart from demanding quick service, consumers are also keen on the health quotient and calorie intake of the food they eat. Speaking on this aspect, AD Singh of Olive Bar & Kitchen said, “If I as a consumer hear about a restaurant doing something different or something new, it gives me a lot of confidence that the owner still cares. Customers like to see that the owner still cares. If you can keep a good product and the prices affordable, they will come back to you. Customer is king and any brand or group that does not listen to what a customer says is doomed for failure.”

Sanjeev Kapoor, Celebrity Chef & Owner, Khana Khazana India Pvt. Ltd., said, “The F&B trends are constant ever-evolving. Normally when a change happens the talk happens first. For the last 2-3 years, the talk is moving towards healthier foods. There’s a lot of sensitivity towards localisation of ingredients as that talk has also started to happen. In the next 18 months there will be action in these areas. More and more people will start following healthier foods.”

Sunil Kallerackal, of BookyourTable, said, “From the restaurant industry standpoint, the two biggest costs are real estate and people. The only way to optimise that is to do a scale. Connect with the local audience because 70% of business comes from locality. So ideally one should study their eating patterns and their favourite cuisines. If you don’t get 30% of the menu reordered or extend the menu adoption to 70%, the customer will not come back. So it is important to connect with the consumer and overlap with the cuisines. It is no point doing something because it is popular.”

Chef James Baika, Executive Chef, Kofuku, said, “Our (Japanese) menu is very much appreciated by Indians. Those who are coming to Mumbai or Kofuku now know about Japanese food. Before that they did not know what Japanese food is. Since they realize that the food is so fresh and healthy, we have a lot of clients.”

Good Business Value :

Assurance of good quality, prompt service and the wholesomeness of the food intake are crucially responsible for the footfalls at outlets. Speaking on this aspect of passion, Anjan Chatterjee of Specialty Restaurants said, “Passion with reason: if you don’t value reason, believe me you are dead. In the first five years we were only passion; however in 2006 McKinsey came and asked us ‘where you are putting your money’ and ‘why are you putting your money’. That’s when we started balancing passion and reason.”

Ajay Kaul, CEO, Jubilant FoodWorks Ltd., said, “For every restaurateur it is very much imperative to establish any new concept in Indian market with Value for Money proposition to gain the initial pull. Value for money strategy has changed the game for Mc Donald’s and it has opened the floodgate of demand for Dominos as well. However every product should not be developed with the same strategy as it tends to lose the essence of the product.”

Gaurav Ahuja of Red Ginger Hospitality, said, “As a restaurant chain, if you are not particular about how much is going into your final product, you are going to lose big time. If you take decision to start your own restaurant, passion has to drive it but, most importantly, be prepared to dirty your hands. If you have conviction in your idea, you will succeed.”

On ways to grow a successful restaurant business, Anjan Chatterjee of Specialty Restaurants further added, “You need to ensure you have corporate governance and transparency and, you need to be concentrating on the radar exactly like a captain. You need to be aware, to be conscious and alert to monitor what is happening.”

Speaking on the economic scenario and the reasons for the failure of Indian restaurant chains, Akshay Bector, Managing Director, Mrs Bector’s Foods, said, “We are in the middle of slightly difficult situation. The economic scenario is not holding out very well and generally the customers are becoming cautious. Foreign brands are successful because they come on the platform of well-designed management; they have settled supply chains. Indian restaurant chains or local restaurant chains have not been able to pick up as they have floundered on various counts. First and foremost is the recognition of the core product – the USP – which helps in developing the chain. Second is the lack of development of well-designed supply chain; most of the restaurants fail at the start-up point because they did no invest in a sound supply chain.”

In the same thought, Sunil Kallerackal of BookyourTable, said, “Most of the foreign brands come with a lot of process, history and structure. Unfortunately, in India, people scale before they have a characterised or structured model. The second issue is high real estate costs. Food costs have also gone up in 3-5 years. These two directly compound the issue for both Indian and International restaurants. Local restaurants, which stand at 80% today, manage better as they are standalone OR un-organised. Big companies struggle a bit because of big issues. The cost of food is 30-40% so some deviation could affect the margin.”

Eric Ho, Founder, Yo Yo Group, said, “Expanding local chain is all about setting up an initial pilot operation. A lot of people open the second store and third store and fourth store and by the second year they disappear. The difference we did was we spend 2-3 years just on the pilot operation – building a strong foundation, building a strong system.”

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