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In an industry that sees many failures, startups need not just deep pockets and drive, but that unique selling proposition to stick it out as restaurateurs
Photo Credit : Ritesh Sharma
Most first generation entrepreneurs will tell you that the drive to do something unique and different and the reality of surviving in the marketplace of today are two very different propositions. When it comes to the food business, survival is more than just of the fittest. Even if you have a backer with deep pockets and immense patience, it’s still a difficult task to make a restaurant succeed.
According to the recently published India Food Services Report 2016 by the National Restaurant Association of India (NRAI) and Technopak, the total size of the industry stands at Rs 3,09,110 crore today and is projected to grow at a CAGR of 10 per cent to reach Rs 4,98,130 crore by 2021. The unorganised market holds a major 67 per cent share of the estimated market in 2016, the report says.
The restaurant industry may be growing and it’s one which is fuelled by imaginative and driven entrepreneurs but, it’s also an industry which sees a great deal of failures. Figures are not available for the rate of success for restaurants in India, but according to Samir Kukreja, trustee and past president of the NRAI, there are more people opening restaurants today than those getting out of the business.
“What has changed is that now, with more entrepreneurs coming into the business, we are seeing people cutting their losses and closing down units, something that wasn’t as common earlier on,” he says. Chefs always have a very intimate relationship with their restaurants. So when they decide to get into the restaurateur game, you almost can’t imagine why they want a job which is more demanding on an already pretty manic lifestyle.
Chef Manu Chandra and Chetan Rampal are part of one of India’s most interesting and unique restaurant company, Olive Cafes South. The two turned entrepreneurs back in 2011 — their first restaurant, the Monkey Bar in Bangalore, opened in 2012. Since then, the duo and their company (which also has A.D. Singh as the third stakeholder) has opened restaurants in three variants, Monkey Bar, Fatty Bao and Toast and Tonic, a total of eight restaurants across India.
All their products have a youthful international quality and are trendsetters, having disrupted the restaurant scene when they were introduced to the food service industry. “I knew what people wanted and the pulse of customers and I could see it change. I saw a demand for a product that was less formal, more comfortable and easy. Since Manu and I worked closely and opened Olive Bangalore together, we had a good working relationship and we always chatted about what was going to work or not work. I think it was the right time to venture out and do something on our own,” says Rampal, explaining what made the duo start the venture.
Chandra was more candid when asked why he become an entrepreneur? “Legacy and wealth,” he says. Being an entrepreneur also means stepping away from the employee comfort zone and taking on more risks, he points out. “You build something which you take ownership of. That’s the wealth part of it,” Chandra says.
As far as the challenges of entrepreneurship in India is concerned, the biggest problem one faces is that a lot of the risks are unseen, says Chandra. “Irrespective of how seasoned you are or how hard you try, you are always discovering new things as and when you are eablishing a business or growing it,” he says.
“Because we have economies of scale, the possibility of a great idea hitting it off is much higher, so the reward quotient in terms of success, at least five years ago, was a fair bet. Even then, we went in with a certain level of trepidation because you can never be sure of any market,” adds Chandra.
According to him, their first venture (Monkey Bar in Bangalore) hit the spot. It wasn’t trying to be anything. It was a quality product at reasonable price points, with lots of chutzpah. “We broke new ground with our product and gave the market what it was craving for.”
Things have changed since then, he points out. There has been an explosion in the restaurant scene. A lot of structured players have entered the business in a very big way. There are so many dynamics at play. Now, you have to sit back and think a little, before you do a new product or launch something afresh. It’s a very crowded market, from five years ago, Chandra says.
Another first time entrepreneur causing waves in the food scene is Sabyasachi Gorai, who is in the process of establishing four very different restaurants, two of which are already open to rave reviews. Gorai, who is known as Chef Saby by pretty much everyone, dropped out of art college and joined the kitchen, to be able to express himself.
“My biggest asset is my thought process. It’s always given me ideas which were radical,” he says. “I have always been anti-establishment. I realise today, as an entrepreneur, if I can’t make a point of difference, however small, it’s not worth it. I have to out-think the establishment — the big names in restaurateuring,” Gorai adds.
According to him, there are three simple rules of entrepreneurship. First, you have to take uncalculated risk; second, you have to trust strangers; and third, you have to pass on your positive energy to others in your organisation.
Gorai’s products range from the very successful Lavaash by Saby, in the NCR — which serves Armenian food from Bengal to Minority by Saby, in Pune, serving tribal food. He is also in the process of setting up a Mediterranean restaurant, serving Sicilian and Sardinian food, as well as a restaurant which serves suburban Marathi food—a vision of what Mumbai was for him.
The third group of disruptors are an integral part of the restaurant industry and can be spread across all segments. They have a product that promises the way you will experience a restaurant. The entrepreneurial trio who make up the company, Idea Chakki, all have extensive experience in television journalism.
“We wanted to do something that no one else in the world is doing and that is precisely what we have managed to do with Dash,” says Gunjan Mehrish. He started the venture along with Monica Narula and Noopur Tiwari, who have all put in over two decades at NDTV. The company note claims that Dash was “the world’s first in-restaurant luxury dining app that makes the menu dynamic.”
The trio’s interactive product, which loads on to restaurant screens, allows guests to make choices according to their dietary preferences and even has short videos explaining everything from how the dish is made to small notes on topics ranging from the right pronunciation to the origin of the dish. The company says the app, “gives a quick, visual preview of dishes on restaurant menus using 10-15 second ‘Fideos’ (food videos). It sorts the menu out in innovative ways and collates valuable diner data”.
They already have the backing of Ratan Tata, who gave them the seed funding, plus a host of clients including ITC Hotels and individual restaurants across the country. As Mehrish puts it, “We are the ultimate disrupting influence when it comes to a product.” In fact, they also happen to be the only ones in the world to make this product, according to them.