Thursday, May 6, 2021, New Delhi: The dynamics of Restaurant Business have changed drastically post the pandemic. Consumer habits and consumption patterns have changed, at least in the immediate term. Factors impacting the sustainability and profitability of any Restaurant Business has changed too. One unmissable fact is that due to the closure of dine-in business, Home Delivery has become far more important than what it was in the pre-pandemic days.
NRAI firmly believes that people consume the products created by the restaurants and technology platforms are just a more convenient means to place the order. Unfortunately, the contours of the relationship between the consumer, the business and the platform has changed drastically over last few years. With massive dollar-dumping, the tech aggregators have tried becoming digital landlords that controls the entire ecosystem rather than just being a platform where buyers and sellers transact on their own terms. Therefore, NRAI strongly feels that it is imperative that businesses take larger control of their digital landscapes to protect their long-term interest.
NRAI is committed to partner with tech solutions where core business decisions are controlled by the restaurants themselves. NRAI also seeks singular right over customer data for the business owners and not the marketplace owners. NRAI wants a transparent ecosystem which benefits all. With these thoughts in mind, NRAI has created a dedicated Tech Team who has been working relentlessly on multiple tech solutions and this event was another step in that direction.
At TownHall 4.0, aptly titled “Delivering Profits #OrderDirect” held earlier today, several top Industry Stalwarts had an insightful discussion on ways to mitigate the challenges in #OrderDirect as well as the best practises to follow in order to achieve this objective.
The event started with an opening address of Anurag Katriar, President of NRAI, where he shed lights on the current state of Food Delivery Business and also deliberated on the criticality of creating alternative platforms on home delivery.
It was followed by a session on ‘Opening Up of Direct Delivery Channels – Importance and Challenges. Three Eminent Industry Leaders – Riyaaz Amlani, CEO & MD, Impresario Entertainment & Hospitality Pvt Ltd; Gauri Devidayal, Partner, Food Matters India and Thomas Fenn, Partner, Mahabelly shared their expert views/opinion on why to enable #orderdirect for a profitable and future-ready business. This session concluded that in order to sustain your business, getting your customers to directly order from your restaurant is the need of the hour. Take control in your own hands and not depend on online aggregators entirely. They all concurred that this is possible to do and primary challenges around discovery and logistics are easily manageable. They further emphasised that every restaurant must invest some time and money to promote their own delivery business. The restaurants must also once again establish their direct connect with their guests, they concluded.
After deliberating on the importance of why to enable #orderdirect. We moved to our third panel with best of the experts from Delivery Business talking about ‘What is #Orderdirect and How to get your Business Future Ready’
Rahul Singh, Founder & CEO of Beer Cafe moderated the Leader’s panel with Industry Stalwarts like Aseem Grover – Promoter & Director of Delhi NCR’s iconic chain – The Big Chill Café’; Manu Chandra – Chef Partner of multi-location brands like Toast & Tonic, The Fatty Bao & Monkey Bar; Pratik Pota – CEO, Jubilant Food Works Ltd – India’s foremost food service listed company, and the largest one too; Saransh Goila – Founder of Goila Butter, Author, Guest Judge, holds the Limca book for the longest road journey by a chef; Yash Bhanage – Founder COO of Mumbai’s sensation – The Bombay Canteen, O Pedro and few more.
This esteemed panel discussed all the possible challenges and gave solutions to them like how to enable #Orderdirect, how can your customers discover you?, how #Orderdirect will give you more control, customers data and much more. Those who have missed this most informative Townhall, can watch it on NRAI Facebook page.
The key highlights of this panel were as under:
▪ Food consumption in India constitutes around a quarter of India’s GDP, that’s why it’s aptly said “Roti Kapda aur Makaan”. Food Services, constitutes of the food not cooked at home (food from a restaurant). This is just 10% of the total food consumed in the country. US and China’s food service share is 55-58% of the total food consumption. Basically, these countries eat out or order in half of their daily needs.
▪ The annual food service or restaurant market in India is Rs 4.2 lakh Crores which is slated to grow to Rs 7.7 Lakh crores by 2025. That is a 9% y-o-y growth.
▪ Growth in India’s food service market will be driven by changing consumer behaviour, reduced dependence of a kitchen set-up, increase in disposable income and higher adoption in tier 2 & 3 cities.
▪ Also, the food service market is highly fragmented with only 7% of the value being driven by chain restaurants and the balance being standalone restaurants
▪ When it comes to the “delivery” portion of the total Food services market, the annual gross value is Rs 37,000 Crs. Out of which Rs 25,000 Crs is through e-commerce aggregators. Which means that the aggregators contribute to or have a pie of only 6% of the total restaurant business in India, serving in 500 cities with 1.5 lakh delivery listing. Some locations have multiple listings, so the number of physical location is much lower.
▪ In comparison to other internet-based markets, food delivery has only come to form in the past five years. The platform-to-consumer model relies on enough customers, restaurants and riders, and without one of the three it struggles to function
▪ As many restaurant owners and chefs have said, there is insufficient margin in the restaurant business to give 20–30% commissions away in perpetuity, coupled with platform induced discounts and marketing costs. Many places have a wafer-thin margins. They would end up losing money on every order.
▪ A restaurateur’s management skills and financial knowledge have never been so tested before. At best, they’re being taken advantage of by the well-funded aggregators. At worst, they are simply unaware of how business has evolved, and how to run a company in this new era, specially the one which has been severely impacted by Covid.
Rahul Singh, Trustee, NRAI; Founder & CEO, Beer Café said, “The takeaway from today’s townhall session and the countless messages we got during it was of overall disdain over the aggregators eating into the already under pressure margins of the restaurants. On the flip side, while we believe that the aggregators need to be more business-friendly; one can’t deny the role they have played in creating a robust distribution
channel and driving up volumes for the restaurants. We therefore will continue to co-exist in the typical love-hate relationship. Tech, after all has to be an enabler, and not a distorter”
On this subject, Anurag Katriar, President of NRAI said, “We are committed to take better control of our business and our customer data and become digitally more self-reliant as an Industry. While NRAI has spearheaded this initiative, I firmly believe that this solution will benefit the entire F&B fraternity at large, benefitting lakhs of small restaurants across the country. This humble beginning will give the restaurants an alternative to the current digital landlords. While we will continue to engage with the aggregators to achieve better terms of engagement, NRAI will continue to unveil more industry-friendly tech solutions in the coming days which will hopefully change the contours of this trade and benefit lakhs of business owners rather than a handful of digital giants”.
He further added, “Through this TownHall, we tried to decipher the challenges and solutions of why & how to enable #Orderdirect and give them some practical insights into how to manage the changing dynamics and landscape in post-COVID era. A lot of fresh ideas and perspectives were shared which I am sure will be very useful for the fraternity and will further help boost innovation within the industry. I am very grateful to all the panellists for sharing such great insights, thoughts and inspiration. I would also like to take this opportunity to urge entire Restaurant Fraternity to please join NRAI Bootcamps in the coming week on 11, 12 and 13th of May. Our dedicated Tech Team has worked very hard on all the details with only one aim to help the industry become self-reliant and independent from these so-called digital landlords.”
Gauri Devidayal, Partner, Food Matters, said, “There are three important aspects that motivated us to set up our direct ordering platform: Quality, Control and Profit. Quality in terms of experience our guests have in the way the food is delivered. Receiving your pizza held horizontally, not vertically, for instance. Control in terms of data and building a relationship with our customers, after all that’s the foundation of hospitality. Knowing what our customer preferences are, and being able to deliver that day after day isn’t possible if you don’t know who you are serving. Similarly, improvement through after sales service isn’t possible if you don’t know who you are serving. Last but not least, is of course Profit. This is not just about saving on commissions but also by servicing an increased radius of delivery and therefore having the potential for higher revenues.
She further added, “We have a long way to go. This is not going to be an easy process, after all aggregators have had years of a head start on this. But that’s not a reason to not get going. The idea for us is to create an alternative, not a replacement. We recognize the positive aspects of what the aggregators are offering us at present and to our customers too, but this relationship is no longer a partnership but rather is one built on dependency. And that’s what we are working to change.
So if you’re a restaurant – don’t even think twice about setting up your own alternative platform. And if you’re a customer, and it isn’t too much trouble, next time #orderdirect.”
