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people 2013-10-12

You cannot expand a restaurant chain without a robust supply chain

Interview Akshay Bector, MD, Mrs. Bector’s Food Specialities Ltd.

You cannot expand a restaurant chain without a robust supply chain

In an interaction with Franchise India, Akshay Bector talks about how Mrs Bector’s Food evolved, the leading F&B trends and the importance of a supply chain.

Tell us about your journey so far?

Mrs. Bector is a company which is largely into bakery business. The journey has been challenging. We are very happy to deliver what we have and we have built a number of relationships that we have today in the Indian market. We have focused on adding value to the products.

The beginning was never easy. Our journey started with our relationship with McDonald’s. We had a small beginning. We started off as a joint venture with Quaker Oats. When Quaker Oats was bought by Pepsi Co, the shares of JV were bought by the Bector family and subsequently we have grown to what it is today on the basis of a lot of innovation which has answered the needs of the local customer. Huge amount of innovation has been done since then and new products have been launched. That relationship led to manufacturing in India on a broader feature as we have never made before. So, few years down the line and as the Indian market was opening up we started marketing this product in the market. That really helped us and the business has served the niche customer well and has added value to the people because this is a very food selling thing.

How are the F&B trends today in the market? Is the restaurant industry really growing or is it that they are declining even though their marketing strategies are working well?

I think we are in the middle of certainly a difficult situation. The economic scenario is not holding very well and generally the customers become very conscious about spending. Beyond that we have also seen that the government has taxes to a very large measure on the restaurant industry and it is far more than what is applicable on general food products. I think it is a very big deterrent because at the end the restaurant does compete with home consumption because out-of-home consumption is not much more expensive than at-home consumption. I think the government desires to get more taxes from the restaurant. As we move within the next two years we would expect the food industry to employ millions and millions of youngsters to find that high level tax curtail the growth of business and this is actually not in national interest.

We see that more and more foreign brands are coming and they are really successful in comparison to any Indian restaurant owner who is just a beginner. What you contribute to the foreign brand?

Foreign brands come with a format of well designed management system and philosophies. They have well settled supply chain, expectation in system and core management system and they come in with a very strong market. Indian restaurants have not been able to pick up. The local restaurant chains have clowned on various systems that notch the recognition of core product and offering which is their USP. Beyond that there is a very sound supply chain. Most restaurants have failed from a start-up point when they have not ingested the supply chain. The world’s largest restaurant chain started from the backyard but went on to invest heavily in technology repeatability, which has enabled it to grow across the world. Indian restaurant chain needs to invest in supply chain the most.

Many restaurants say that meeting the supply chain is a hurdle. How can one counter that?

Supply chain means setting on a set of suppliers that would deliver the products when the restaurant wants. Consistently they should have the ability to service that meet. It is going to start from a management commitment to policy and systems and once that commitment is there the rest will follow. It is not possible to expand a restaurant chain without having a supply chain in order. You might start an outlet or two but if you start franchising and wish to expand the chain, then to have a good and robust supply chain is paramount. 

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