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Sustainability of the restaurant business

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NRAI CEO Session at FHW Bengaluru 2017 saw well-known names from Bengaluru’s F&B sector discuss current issues affecting the restaurant industry. Moderated by Chef Manu Chandra, the panel included Chef Abhijit Saha, co-owner and executive chef, Caperberry, Avant Garde Hospitality; Ajay Gowda, owner, Brewsky Hospitality; Biju Jose Thomas, COO & CFO, Vasudev Adiga’s; Amit Roy, partner, Think Tanc, and Nikhil Bakshi, co-founder and head, Dineout. The panel discussion was presented by Dineout.

Sustainability of restaurant business being a key  topic of discussion, according to Roy the most important aspect was to understand what the trends were and how to fit in. “Sustainability has many aspects and facets,” mentioned Chef Saha, adding that the two important areas that matter is lifespan of the restaurant in the market and marketability. Reminding that one has to be flexible and understand the market, Chef Saha added, “People move with trends and different things are happening in the market. Today you cannot guarantee the success of any restaurant brand, you have to go with your gut feeling regarding the market and marketability.”

While having a product that has withstood the strength of time is important, quality does draw a certain number of people but what does one do to manage rising expenses? Thomas asserted that it is important to maintain standards – particularly, with the restaurant chain having large number of customers per month in its 25 outlets and counting. “When we enter into a new location, we look for stronger longevity. When we pick a location, we do a lot of due diligence. In any new location, we can know within 6-12 months whether we can do well or not,” shared Thomas. As a brand Brewsky believes in setting a high benchmark in experiential dining. At any time, almost 2000 people can enjoy great beer and dining, along with entertainment at Brewsky. “We are trying to come to the apex of F&B and experiential dining,” said Gowda. Expansion strategy was one of the important factors highlighted in the discussion. Bakshi remarked, “What we have seen is that brands grow and establish themselves in one market and then go to another city. They tend to grow slowly before venturing out into separate cities. They want to establish their foothold in one territory and then move out.”

Regarding expansion, Chef Saha remarked that so far it has been a matter of choice and sometimes compulsion. “It can be expanded in certain formats, all formulas do not work in large formats,” he pointed out.

Funding game

In 2012, the whole funding scene was exploding to take great ideas to the next level across various verticals of F&B. “We were flushed with funds and suddenly there was so much money in the market we did not know what to do. There were disaster stories as well,” said Chef Chandra.

There is a prevalent business model of chef-restaurateurs with a lot of younger chefs getting into business. Chef Saha who had a strategic partner in business said, “You cannot say what works for you will work for another.” He believes that a significant amount of money that has come into the F&B sector has been squandered away, except for four-five companies. “It is critical to have money, but it is as essential to spend it well. It is very important to keep the trust of the investors who are putting in money in the industry,” he asserted.

Roy agreed that there was a lot of disposable fund coming into F&B from other avenues, which has to be taken with a pinch of salt because one never knows when the investor will put the plug. “I’d rather not take money from someone for a brand I had toiled for and he does not put the second round of funding,” he said.  Roy however felt that the biggest elephant in the room is the legal department or the government in this matter.

Pointing out that some of the laws are 70-75 years old, and a lot needs to be done at the policy level, he remarked. “Worldwide, the hospitality industry is being supported. At one point of time going out to eat was a luxury today it is a necessity.”

There seem to be no policy changes that seem to be helping, affirmed Chef Chandra, adding, “The ease of doing business in India is one of the lowest in the world. There are so many clearances needed for licensing.”

Source: Expressbpd.com

 

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