By Sourish
Bhattacharyya
THE Indian
Restaurant Congress 2014, organised for the fourth successful year by Franchise India, opened at the Vivanta by Taj in Faridabad with the
overarching theme of 'Think Global, Eat Local' and the inaugural speaker, Lite Bite Foods Chairman Amit Burman, drove home the point by
stating how just one innovation -- the introduction of masala papad as a side dish -- drove the per outlet sales of Punjab Grill up by Rs 2 lakh a month in
Delhi/NCR.
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| Lite Bite Foods Chairman Amit Burman gave an insightful start to the Indian Restaurant Congress 2014 with his analysis of the challenges and future growth areas of the restaurant industry. |
Innovation. Consistency. Localisation. These were the
buzzwords that kept coming up in the presentations by the leaders of the
industry as they looked into the crystal ball to predict the trends that would
define their business in the years ahead.
Burman started his talk by listing the "continual
challenges" -- higher-than-ever real estate, ingredient and personnel
costs -- which have confronted the industry since the past year. Food inflation
peaked at 20 per cent in November 2013 and energy cost went up on average by 11
per cent, Burman added. He listed four strategies to find a way around these
challenges: smart menu engineering, efficient real estate use, smart hiring and
tighter cost controls.
"We earn for the government, real estate owners and
banks," Burman said on a light note, adding that taxes sliced off 20 per
cent of the margins of a restaurant business, and rents as well as repayment of
bank loans with interest accounted for another 30 per cent. What he mentioned
in passing, though, is an even bigger challenge. Indians still do not eat out
as much as their counterparts in south-east Asia, for instance. Though we eat
out twice as much as we used to in the recent past -- eight times a month,
compared with four in the past -- we are way behind the residents of Hong Kong
(3.2 times a day) and Singaporeans (41 times a month).
In this tight market, how can restaurant operators make
money? For Lite Bite Foods, which has become a benchmark-setter in the
restaurant retail business, the future is in airport retail, which, according
to Burman, offers more consistent footfalls and growth than malls or the high
street. The company is now looking at food courts at next-generation railway
stations, as visualised by Prime Minister Narendra Modi, as the next big growth
avenue. "More and more travellers are eating on the go," Burman
pointed out.
Home deliveries and takeaways were the other growth drivers
highlighted by speaker after speaker. Discussing the Yo China growth model, the 51-outlets-and-growing restaurant
chain's CEO, Ashish Kapur, said that
home deliveries and takeaways accounted for 40 per cent of its revenues,
providing a cushion to the dine-in side of the business. A sound logic drives
this mixed growth model: You're paying rent for the entire day, so why don't
you make your most expensive asset sweat harder! "Maximise business,
reduce transaction costs," Burman said, pointing to the obvious benefits
of this mixed growth model.
K.S. Narayanan, CEO, Pan India Food Solutions, whose brands extend from Copper Chimney
to Coffee Bean & Tea Leaf and Spaghetti Kitchen, made a strong pitch for
"constantly innovating in the way we cook, serve, deliver and
communicate". He made three points that the industry can ignore only at
its peril:
* Food is very local, very culturally driven (hence, the new
buzz phrase, 'eat local').
* Taste is an important driver of consumer preferences
(hence, the salience of consistency).
* Consumers are becoming critics (hence, the paramount
importance of communications).
Everyone talks about consistency, but it's easier said than
done. For a single restaurant, it may mean, as Saurabh Khanijo, the man behind the successful trio of Kylin, Kylin
Premier and Sartoria, put it: "standardisation of recipes and regular
audits" to ensure that the recipes are followed without deviation. Kapur
at once gave the audience a reality check.
Consistency of the quality of food that is served at a
restaurant depends entirely on the consistency of supplies and the consistent quality
of ingredients, which are both big challenges. The supply chain, likewise, is
dependent on the efficiency of the transport network and the consistency of
temperature control, which are both logistical nightmares.
Kapur said that in an ideal world, it would make economic
sense to prepare at a central commissary and transport the thousands of dim sum
consumed daily at the many Yo China outlets in Delhi/NCR (all that these would
then require is steaming or frying once orders are placed), but this enterprise
would require a "chilled chain", which is a dream in our country as
we still struggle to put a cold chain in place. In an imperfect world, it's not
easy to be a restaurant operator, but the growth rates are too tempting for any
entrepreneur to ignore.
