Despite all the flowery returns that the sector offers, there are some major challenges to make a strong foothold in the segment.
Restaurant business is the fastest growing business in India, full of exciting opportunities and unheard challenges for new start-ups to ride. Growing competition and demand for new and innovative food is pertaining in Indian food system for years and this could be cited as one important factor for continuous growth of the segment.
But despite all the flowery returns that the sector offers, there are some major challenges to make a strong foothold in the segment.
Consistent Supply: As this sector is totally dependent on the distribution network and channels it has. It is still very crucial for restaurant owners to get fresh and consistent supply every day. At a time when India sits as a global food hub, supply chain is a major issue in the country.
“Our biggest challenge is consistent supply, so we are now working with multiple farmers to ensure consistent supply, “shared Vinod C of Naturally Yours an organic food start-up.
Continuous cash flow: Investment is one such angle where everyone takes a breath before putting in their money. Restaurant and food start-ups who have seen the largest number of cash flows happening though find it difficult to continuously manage the efficient cash flows and returns. And, this could be cited as one of the reason that many start-ups are closing in India within few months of getting investors attention.
“Since we are self-funded, finance was an initial restraint and concern. But after six years and two successful restaurants later, we fortunately don’t have to focus much on that anymore,” added Nathan Harris & Lynn Dcosta, Owner, The Hole in the wall.
Customer Loyalty: Customer loyalty and regularity is another important challenge that brands are facing today. Even though they like your food visit your restaurant and order food via your online partners, how sure you are of them that they are coming to you again and again. And, this is where customer loyalty comes to an end. With so much opportunity that the sector offers, people are looking for a varied experience and extended choice.
“Even though my Father has a huge amount of respect in the poultry industry, the journey has been challenging and intense. I handled the distribution and all the infrastructural and marketing changes that came with going retail, like expanding delivery services. It is hugely encouraging is to see the loyalty that the brand commands with the actual customer,” pointed Perizaad Zorabian of Zorabian Chicken which is one of the top manufacturer and supplier of chicken products in India.
Location, Location, Location: Given that real estate prices are soaring in India, finding a good realty destination is always a major challenge for any business to start with.
“We face challenges every now and then that are maintaining consistency with food and service and locations. The best marketing tool for us has been word of mouth and the coverage on several publications and blogs and television. We have hardly ever resorted to loyalty programmes as it has never appealed to me,” claimed Pooja Sahu of Potbelly Cafe.
Hiring good talent: Hiring good talent and retaining them is a major challenge in food business. The staffs have been upgraded to talent these days, as they are the ones responsible for transferring the brand image. As said, the staffs are first introduction of a brand to consumers, much before the actual product (food), one should be extra cautious while hiring.
“We have regular challenges like staff attrition and inflationary supply costs, but I would say that our main concern at the moment is focussing on consistent quality of our food and also meeting very high expectations that our customers set for us,” said Harris.