Page 53 - Forbes India (December 2015)

our to five years ago, there clocking a revenue growth of 14 like Mumbai that has higher rental
were not too many players percent and a decline in profit of 50 costs, the Hoppipola outlet in Khar
F in the casual all-day dining percent over the previous fiscal. broke even in five months,” says Avik.
space except for quick service Besides, other than the flagship But, he is also looking beyond
restaurant (QSR) chains such as Mainland China brand, Speciality Hoppipola. “We are working on newer
McDonald’s and KFC. Today, many Restaurants has not been able to concepts such as micro-breweries,
restaurant chains are targeting this scale its other brand formats. As per roof-top bars, and an Asian gastro
space with multiple formats (bistros, the company’s latest annual report, pub,” he says. While he doesn’t
bars, gastro pubs, etc) as diners are of the 115 restaurants operational in divulge details, he adds that over the
yearning for varied experiences. India, Mainland China accounts for next five years the bar brands would
“Restaurant brands that are housed 53, Sweet Bengal (a confectionery account for about 30 percent of the
in malls have already cashed in on chain only in Mumbai) has 18 outlets company’s revenue, if not more.
this trend. I feel that he [Chatterjee] and Sigree, which serves cuisine Kanwaljit Singh, whose proprietary
wants to target the middle-class from North and Western India, has family office Fireside Ventures has
audience who are more in number, but 16 restaurants; Oh! Calcutta has invested in the food and beverage
their spending potential is such that nine outlets, as does Hoppipola. The sector, believes Speciality Restaurants
the average revenue per customer is remaining brands in the company’s is on the right path. “I feel that going
lower,” says Bengaluru-based chef and portfolio of 15 are spread out in into all-day dining, causal dining,
restaurant consultant Nimish Bhatia. pockets across various metros. and QSR formats would offer a more
In an all-day dining format, a repeatable and expandable business.”
restaurant leverages itself over But Singh also thinks that a
the whole day unlike a fine-dining “FINE-DINING “strong initiative” towards a delivery
restaurant, where business is RESTAURANTS business model is critical, as some
conducted during fixed lunch of the newer online food delivery
and dinner hours. “It’s all about ARE FACING models are proving. “The economic
revenue optimisation per cover HIGH INPUT models are still not very clear. But, if
[seat],” says Chatterjee. Besides, you have a physical presence across
in the restaurant arena where the COSTS AND PRICE multiple locations and if you could
mortality rate is a high 50 percent, RESISTANCE [FROM add a delivery model then you can
an all-day dining format helps a CUSTOMERS].” sweat that asset even better,” he says.
restaurateur overcome pricing It’s an idea the Chatterjees aren’t
challenges related to fixed costs. ruling out. The online food delivery
Taposh Chakraborty, founder, space is on their minds, but they aren’t
Boutique Hospitality Consultants, But with the focus now shifting to talking about their plans as yet. “The
says fine-dining restaurants are all-day dining formats, scale is what industry is seeing disruptions from the
facing high input costs on one father and son are talking about. For likes of mobile-based food apps and
hand, and price resistance (from Zoodles, which competes in the QSR online food portals. I think it is very
consumers) on the other. The high segment with the likes of McDonald’s, important for all of us to be alert and
input costs, he says, are attributed KFC and Domino’s Pizza, Anjan nimble-footed so that we are always
to real estate costs accounting for believes 100 restaurants are easily ready for the next big leap,” says
22 to 25 percent of revenue, raw achievable. “We will be rolling out Chatterjee. That said, Mainland China
material inflation being close to 20 six additional Zoodles restaurants in and Asia Kitchen by Mainland China
percent, and manpower costs rising Mumbai [from one currently] over will continue to be the flagship brands
by about 12 percent year-on-year. the next six months. The growth of of Speciality Restaurants, at least for
“Their [Speciality Restaurants’] Zoodles will be 10 times faster than now. And that shows in the promoters’
results are a reflection of high input that of Mainland China,” he says. vision to revamp the brand. “In any
costs and disproportionately lower Likewise, in the next two fiscals, restaurant business, the hardest thing
pricing demand. Therefore, in the he is planning 35 to 40 restaurants is to keep up the consistency of food.
Indian context, their diversification for Hoppipola, where an average Of course we can’t say that we have
into all-day dining formats is well bill value is Rs 550 to Rs 600 per always maintained a 100 percent
justified,” says Chakraborty. For customer. “In terms of revenue, consistency level, but, wherever we
FY2015, Speciality Restaurants Hoppipola has given more than what can, our levels are higher than any
reported revenues of Rs 299.83 we expected. The break-even time other restaurant brand or chain in
crore and a profit of Rs 9.45 crore, period is very short. Even in a market the market today,” says Avik.

DECEMBER 11, 2015 FORBES INDIA | 53