Celebrating Customer Knowledge
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growth 2013-07-18

Celebrating Customer Knowledge

Gone are the days when \'dukandars\' wanted to sell what he wanted to the \'grahaks\'. Come 2013 and the \'grahak’ rules with his mantra: sell what your customer wants and not what you want to sell. With customer’s tastes changing rapidly, the rules hav

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Celebrating Customer Knowledge

The transformation of Indian consumers’ lifestyles over the years has tremendously helped the IEO (Informal Eating Out) industry to grow and expand. Other reasons like rising number of nuclear families, exposure to global trends, increase in the number of employed women and dual income households have had a significant impact on the eating out habits. This has led to the growth of the fast food industry in India.

The industry experts who had together made the elements of the restaurant bizz look glamorous, got together at the Indian Restaurant Summit and reviewed the changing trends varying from investments to marketing.

Here are the key themes at the event:

Spotlight on ‘Customer Experience’

Though the future looks bright for the overall food service industry, there are no guarantees in this business. One has to think smart, keep ones ears open and stay focused to be able to garner customers in order to achieve success here. The hard reality is that many restaurants fail during their first year – some due to lack of visibility and poor marketing, while others go wrong in putting the basic ingredients together.

Mr. Sunil Kallerackal, Founder & Chairman, Book My Table, addressed the problems of every player in the food business and positively changed their number game − 10 percent with new customers, 20 percent with repeat customers and 30 percent – in terms of improved customer satisfaction.

Speaking on ways to retain customers, Mr. Ameet Pahilani, Founder, Cafe Chokolade, highlighted how being nice to customers for providing them the experience is imperative. “Being nice to customers is imperative; the next time a customer comes in I give them a loyalty card of 10% or a booklet which has various different offers or a scratch card with a free gift. Every person responds to a discount and most of the brands are doing that.”

The panellists highlighted the influence of technology in the restaurant business and how technology has bettered the experience because they make the raw material go through a more systematic transition during cooking.

Speaking on the importance of presentation, Chef Mayank Tiwari, Chef de Cuisine, Olive bar and Kitchen, said, “Presentation is important. As everyone says, you first eat from your eyes. This does not take away quality anyway.”

Making Growth Simplified

Today, higher levels of disposable income among consumers have led to more adventurous tastes and a greater appetite for eating out in many areas of India. Over the past few years, international brands have enhanced their presence as have existing domestic ones and newer start-ups are springing up every day.

The panellists highlighted the fact that over the years it has been proved that a simple business is a successful business. Mr. Ameet Pahilani, Founder, Cafe Chokolade, highlighted that for running a restaurant, one needs to keep things as simple as possible in addition to the need to make the product as simple as possible.

Mr. Venkatesh Iyer, MD and CEO, Goli Vada Pao and Mr. Dheeraj Gupta, MD, Jumbo Kings Food Pvt Ltd have over the years proved that a simple business is a successful business. Goli Vada Pao took the speciality of Maharashtra to other states and achieved success in his innovative journey. Speaking on his simple approach to growth, Mr. Venkatesh Iyer said, “The core for any entrepreneur is passion. That is how a single idea came to be vada pao. It is a delicate mix of art and time. If the idea is good and the product is good, you should not worry about competition.” Jumbo King targets the youth who look for hygienic food and caters to their need, pricing it higher than the street vendors. Speaking on how location is important for growth, Mr. Dheeraj Gupta said, “90% of the time it is the location. A good product with a great location is a better combination than a great product and a mediocre location.”

Both these brands have eliminated the requirement of a trained chef or a staff, thereby addressing the labour problems. They have also simplified their supply chain by using frozen pate. Similarly the frozen yoghurt segment and brands, like Cafe Chokolade, opened up in different cities due to their simplicity in functioning.

Speaking on the trends followed by the industry for success, Chef Mayank Tiwari of Olive bar and Kitchen said, “Restaurant industry follows trend in a very macro level because sustainability of restaurants is much tougher than standalone restaurants.”

The panellists also highlighted that while opening a full-fledged restaurant requires high capital investment, complex supply chain, highly trained chefs and staff along with the ambience suiting the cuisine, the formula to run a QSR can be just the opposite.

Standardisation of Taste

The broad consensus among the panellists was that the market is large and there is enough space for food entrepreneurs looking at entering the restaurant industry in India. The increased competition will ensure that there is no place for complacency and this will drive players to offer better quality and services to the customer. The customer’s loyalty will lie in the hands of those who know how to deliver and appeal to their taste buds! Serving the right food at the right place to the right people will provide the recipe of the mouth watering business model.

Mr. Venkatesh of Goli Vada Pao highlighted that it is important to focus on the product because the taste is very important. Once the people love the taste, they will come back again and again. Mr. Dheeraj Gupta, Founder, Jumboking, stressing on the standardisation of product, added, “A consumer knows everyday what he is going to get. He knows that the masala which has to be used is the same. It is more on proper surety, that the brand provides, that makes a customer come back.”

Mr. Sunil of Book Your Table had a different take on it. According to him a restaurants’ success is correlated to how much a restaurant understands its customers because only then will the menu design come easy. He further stressed that the signs of mapping a customer to a menu is difficult in the beginning so it is very important to get feedback and fine tune the error.

Talking about the elements that are utmost important for a cafe’s success, Mr. Ameet of Cafe Chokolade said, “Everything starts first with the product. You can claim to be a successful franchise chain only when you standardise the product, i.e. you need to be served the same taste irrespective of where you are served. When you go to a brand, you expect good food quality. That goes without saying if you claim to be a brand.”

Speaking on the importance of menu in a restaurant, Chef Mayank Tiwari of Olive bar and Kitchen said, “We change the menu at least three times in a year. We have a special which we change on a weekly basis. Some menus go through a more holistic change.”

The Economics of ‘Money’

The panellists highlighted that the Indian QSR industry, pegged at $1.36 billion in 2011, is slated to grow at a CAGR of 35 per cent to reach USD 4.5 billion by 2015. With growing urbanisation, rise in income levels and a young population, the QSR industry in India is moving upward quickly.

The franchising sector in India is growing at a swift pace of 35 to 40 per cent per annum. The market size of franchising sector is estimated to be Rs 35,000 crore and is likely to reach Rs 80,000 crore by 2013.

With innovative solutions to increase footfall and revenue for banquets, QSRs and five star restaurants, Mr. Sunil of Book your Table lays emphasis on aspects which often go unnoticed like menu re-engineering and personalised experience for the diner. The company, hardly two years old, is here to take on the tag of Mr. Fixit for restaurateurs looking out for help.

Speaking on the role of Private Equity, Mr. Nikhil of Brain Capital highlighted that there is a need for private equity in India even though the private equity industry has not been growing over the last three or four years. Explaining the reasons for it, he emphasised that firstly a lot has to do with the macroeconomic situation in the country and secondly the industry grew faster and bigger than it should have. So in the long run, say 10 to 20 years, private equity will grow.

Opening a restaurant or divulging into any vein of the restaurant industry requires immense passion to begin with. No textbook can get you a glimpse of the workings of this industry; it must be learnt by experience and experience alone. This industry might look inviting and glamorous, but its whirlpool is forever ready to swallow the investments made by thousands of entrepreneurs.

 

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