An interaction with Amit Burma, Vice Chairman, Dabur India and Chairman, Lite Bite Foods.
From cleaning utensils to baking breads at Subway, to coming back to his homeland and opening the second Subway store, Amit Burman’s – Vice Chairman, Dabur India and Chairman, Lite Bite Foods – foresight speaks volumes about his commitment to the Indian food industry.
Tell us about your transition from being the man behind packaged food juices to doing food retailing with a chain of QSRs and fine dining restaurants.
I started our food business as part of my parent company, under the brand Real. I think the transition happened when we, Dr Anand Burman and I, decided to fully professionalise the company’s operations. Eventually, I strategically decided to merge Dabur Foods with Dabur India (parent company), which had become a very profitable company. Dabur, having an efficient tax structure, was better off owning it than starting another company separately.
Some 7-8 years ago, I predicted that retail would emerge in a big way. Most of the leading companies were trying to get into the hypermarket and supermarket space. But I noticed how the rising number of malls and supermarkets were similar to the amount of restaurants and food courts coming up in future. Hence, I realised huge opportunity lying in the food court space.
Currently, we cover more than 1 million sq. ft. of retail space with a strong presence in malls, high streets, airports, corporate places and hotels. To handle 1700 employees and 83 stores with 7 to 8 stores in pipeline, one needs a professional set up. We are operating on ERP (Enterprise Resource Planning) system today, probably the only company other than the major international brands.
How do you see the restaurant industry in 2014 and beyond?
I think the restaurant industry is growing very fast. New players are entering the segment, new and innovative formats are introduced increasingly, and there are chances of inflation rates going down with margins getting better. Last year, restaurateurs faced 20-25 per cent inflation in the business, so there’s always a tussle between how to increase the prices and keep the margins on the other hand. I believe that the restaurant industry will witness good growth potential in future.
How do you manage the dual duty for two different segments? Which role do you feel is more challenging?
As far as Dabur is concerned, the company is much professionalised. So my work in the company is more on the strategy side such as budgeting, reviews, etc. On the other hand, experience at Lite Bite Foods is more ‘hands on’ because it is a relatively new company. You have to get everything done from development, operations to finance, marketing, etc. Inspite of having people in place, you have to see everything yourself. As an entrepreneur, you have to manage the company and at times, you need to work as an HR also. Everybody has to work hard to make this company the largest F&B retail organisation in India.
I think, working as an HR is a big challenge today and to get good people in the F&B industry is very difficult. It’s hard to attract talent with good potential, find trained manpower, trained chefs, trained management people. So, retaining the workforce as an HR is a major challenge.
LBF introduced the concept of street food in the organised segment. What was the need to do so?
We offer street food at Punjab Grill. People like food that are available on roadside eateries, be it Chaat in Delhi, Glouti Kabab in Lucknow or Vada Pav in Mumbai. But they are scared of eating it because of various hygiene factors. So we are trying to bring all the street food to people in a more hygienic form, where they can trust the eating environment.
What would you comment on the food policy and laws framed by the government?
I think that the taxes imposed on the restaurants are very high. Almost 20-25 per cent of our cost goes into taxes. While in other industries, the taxes are much lower as they have to pay approximately 10-12 per cent, which is much lower when compared to the F&B industry. We are negotiating with the government to bring the taxes down because if taxes are lowered, more consumption will take place.
What is your future growth strategy?
Out of the 83 stores that we have, 80 are company-owned outlets. We have mastered the art as we understand the manuals and how to do business. We are now planning to expand aggressively through strategic partnerships outside India and franchise partnerships within India.