Friday, July 9, 2010


India is blessed with hundreds of thousands of small eateries working across the country serving millions of people every day and due to their low visibility they are rarely counted with the national census failing to generate any realistic data about them. The classical viability factors do not apply to their operations because there are eating joints serving hardly a few dozen customers in some of the remote areas in the country with annual turnover not even crossing Ra 10000! The fact that they are still surviving speaks volume about their resilience and expectations. Probably some of them are being run to supplement family income and are managed by the house wives in their own kiosks, either part of their house or nearby. Beyond this category there are also small scale regular restaurants serving limited variety of foods for satisfying the local clientele with minimum investments and facilities. Those earning more than Rs 100,000 per year and beyond are mostly located in Tier I, II and III cities. There are no accurate statistics regarding the number of restaurants in the organized sector working under the license system that prevails in the country but a fair guesstimate would place it at over a million making it a strong player in the business landscape of the country.

Why is that new entrants in the catering sector popularly referred as fast food companies are receiving so much attention while their desi counterparts existing in this country for decades continue to be neglected? How is that no domestic investors are interested in establishing purely Indian fast food network that can compete with those originating from outside the country? Why not the Reliance or the Tatas or the Bharti or the Godrej or other industry giants take interest in knitting together a national chain that can offer ethnic foods to millions of Indian customers who cannot appreciate Hot Dogs or Burgers or other types of western foods popular with educated and foriegn-exposed youngsters? There can even be new entrepreneurial interest in this area if adequate technical back up is forthcoming for converting the ethnic foods into formats that can be served and consumed easily. Classical examples of Taco Bell, Chipotle, Pizza Hut, Barista, KFC, McDonalds all successful players in western fast food category should provide sufficient motivation to Indian investors to enter this sector.
Entrepreneurial spirit, wherever it is manifested must be applauded. There are many lucky inheritors of industrial empires and building on what is inherited is also some thing deserving admiration. In the catering sector there are many corporate ventures which are shining examples of excellent managerial competence and far sighted vision. Chipotle, the restaurant chain that specializes in Mexican foods, is one of the marvels of modern era as it has been able to carve out for itself a significant clientele base in the US and spread its wings beyond the borders. It recently celebrated the opening of its 1000th restaurant which is not a small achievement measured by any yardstick. The saga of this 17 year wonder can be an excellent model for any new entrepreneurs wishing to be counted amongst the big business players. With annual turn over of more than $ 126 million and employing about 22000 people Chipotle is a model that can be emulated in India.

Since opening the first restaurant in 1993 Chipotle was able to achieve many milestones in its brief existence. Their USPs include
serving naturally raised meat (from animals that are raised in a humane way, never given antibiotics or added hormone and fed a pure vegetarian diet), the first to commit to local and organically grown produce, and the first to serve dairy (cheese and sour cream) made with milk from cows that are not treated with the synthetic hormone rBGH (recombinant bovine growth hormone). Its focus has been on making great tasting food with more sustainably raised ingredients available and affordable for everyone making customers coming back repeatedly. With such credentials success is more less assured and that is what required for any successful venture aiming for a pan India foot prints.

One of the reasons for lack of entrepreneurial interest in taking up business ventures based on Indian foods could be lack of standardization of some of the foods and their unsuitability for "packing and presentation" similar to Burrito or Qesadia or Hot Dogs or Burger. Masala dosa can be redone with the dosa part being used as the shell and the vegetable based fillings forming the content, resembling the Burrito. Similarly mini idlis in a bowl with chutney and sambar in small disposable containers along with bites of toasted papad can be another quick serving item. There are hundreds of such foods popular in India and they can be easily transformed into ready to eat fast foods.

Added to this is the clear segmentation of the consumers into vegetarian and non vegetarian camps requiring separate preparation facilities involving higher investment. The growth of the Cafe Coffee Day chain and its impact on the consumer attitude do indicate that there is a clientele that will readily welcome innovative catering services with an eye on ambiance and good quality foods. What is needed in India is thousands of such branded food chains offering products like dosa, idli, vada, pakoda, stuffed parotha etc in a quick biting format that can be eaten on the spot or carry home for family consumption. Probably there can be food chains with distinct Indian names that can associate the products served with commonly consumed foods in the country.

Already there are many retail chains working with a pan national foot print and they can earmark a portion of their outlets for setting up fast food joints. Similarly the major fuel companies with thousands of fuel stations across the country can usher in a fast food revolution through business alliance with some of the catering majors for setting up outlets in their premises. Raiways can also can be roped in for launching a series of uniformly formatted fast food outlets. Indian consumers, especially the youngsters, have a better chance of bonding with their heritage foods through such modernized traditional foods accessible easily and mofified to suit their life style.


No comments: