Keys to Empowering your Staff by BS Nagesh

The FMCG sector, the larger segment which includes CPG sector, has a very strong potential in India. The segment’s market value is estimated at about 50 Billion USD and growing strongly at about 7-10%. The country, with its young population, growing income levels and increased spending, presents a unique opportunity for CPG start-ups. Much like the Health & Wellness that has seen many successful start-ups without a single-brand consolidation, the rest of the CPG space also offers chances for businesses to flourish.

Munching on the sector, Haldiram’s one of the fastest growing brand in India and internationally has invested in integrated incubator Venture Catalysts. With this partnership, Venture Catalysts aims to boost its overall understanding and facilitation of start-ups in this sector. The Consumer Packaged Goods sector, comprising goods consumed every day by the average consumer, has shown significant growth potential in the Indian market, and the current association aims to utilize this opportunity.

Venture Catalysts aims to leverage Haldiram’s expertise to intricately evaluate its investments in the CPG sector and achieve – a much stronger foothold in evaluation, industry relevant mentoring, identifying market opportunities, and developing better consumer understanding in the CPG space.

Haldiram’s began its journey in 1937, when starting a business was not a ‘trend’ but an extremely difficult, highly uncertain step. Today, it has become one of India’s most recognized and loved brand whose success is a benchmark for other businesses. The core responsibility of Venture Catalysts continues to be the development of start-up eco-system in India, which will be further empowered by Haldiram’s experience of building strong brands.

While Haldiram’s investment amount in VCats is confidential, but the funds have already been strategically allocated to strengthen the team, processes and presence of VCats to ensure the creation of an ecosystem built to suit the needs of the CPG industry.

“The collaborative model is highly customized and will vary from start-up to start-up depending on what the requirement is for all the teams involved. There can be various companies wherein Haldiram’s could even be interested in taking a lead investment in the start-up and hence a far deeper engagement and association with the founders to guide them through the journey as well, resulting in a win-win situation for all the stakeholders involved,” shared the statement.

“Over a course of more than eight decades with over 400 products, Haldiram’s has established its position as a leader, risk-taker and quality seeker in the industry. We have always strived to focus on identifying market opportunities and make the best use of them through product diversification and listening to the consumer intently. We want to share the knowledge acquired over the years and contribute to the burgeoning start-up ecosystem in the country,” shared one of the spokesperson at Haldiram’s.

Commenting on the association, Anuj Golecha, Co-Founder, Venture Catalysts said, “The association with Haldiram’s gives start-ups in our CPG portfolio an immense boost. The success and reputation of the brand in the sector is known to everyone and its business principles and product quality serve as a benchmark for potential entrepreneurs in the sector.”

VCats is already one of the largest early stage Incubators across Asia and is now planning to step this up with a stronger global foot print, having recently entered the UK market as well. Post this collaboration, it plans to invest in 10-15 relevant CPG start-ups in the next 12-24 months and build strong start-up stories such as men’s grooming brand Beardo, female hygiene start-up PeeSafe and India’s first herbal energy shot drink FYRE.

“The alliance with Haldiram’s sets a benchmark for other enterprises to enter into active collaborations that look to empower the start-up ecosystem. The Haldiram’s growth story and the way in which they have built an empire from the ground-up, and this is the ideal example that we want to set for the enterprises that are a part of the VCats set-up right now,” added Dr. Apoorv Ranjan Sharma, Founder, Venture Catalysts.

A couple of generations ago, convenience foods or Ready to Eat/ Ready to Cook food was an absolutely unimaginable concept – the only form of cooking was making it from scratch. Fast forward a few decades– convenience foods have not only become daily needs of homemakers but also chefs who are not leveraging the benefits of convenience packaged foods. Preservative-free and natural packaged foods are causing a revolution in the HORECA industry by providing consistency, lower wastage and higher yield.

The Growth of RTE and TRC categories

Ready to Cook and Ready to Eat foods have been gaining immense popularity because of the convenience and the eclectic variety that they offer. Today, several brands offer food options that reflect the authentic taste of Indian dishes. With rapidly changing socio-economic factors, the demand for convenience foods is increasing steadily. Not only are the millennials buying them, but contemporary parents are also turning to these pre-cooked meals to tackle the time crunch caused by accelerated lifestyles. Anamalgamation of factors like rapid rate of urbanization, diminishing culinary skills, rising income, and an increase in the millennial work force have amplified the growth of this industry. Furthermore, the rise in the number of Indian travelers and students who prefer to carry along the taste of their favourite comfort food across oceans has helped drive this growth further. Food technology has been one of the most rapidly evolving sectors. Today it is possible to preserve food without preservatives by using technologies such retort sterilization, High Pressure Processing (HPP), freezing and several more. These technologies enable fully cooked food to be shelf stable at room temperature or controlled temperatures for weeks or months. Moreover, good quality fresh raw materials negate the need of adding any artificial ingredients such as MSG, artificial colors etc.  Several reputed brands are using cutting edge technology to stick to their all-natural promise. Moreover, companies are going the extra mile to source daily fresh frame produce to get fresh tasting products without any additives.

Go healthy or go home

Consumers wish to indulge in healthy yet tasty meals. Brands are making the best use of super-nutritious ingredients like brown rice, ragi, flax seeds, oats, etc. to keep up with the consumer trends. Moreover, brands are now even picking up global trends and offering organic and vegan Indian products for these niche consumers.

Uplifting the HORECA sectors

The HORECA sectors (Hotel/Restaurant/Café) are making optimum use of RTE/ RTC foods in a bid to cultivate consistency, great taste and innovative flavours across all their outlets around the globe. This has enabled global QSR chains to ensure their food tastes nearly the same -whether in India or in USA. It has indeed helped in overcoming geographic limitations whilst enabling them to serve consumers in a quicker, more efficient manner.  Brands are especially catering to this industry by rolling out smarter and more innovative options to equip chefs with increased ease of preparing these dishes, proving to be great time-savers for everyone. Convenience foods are finding greater application in leading in-flight kitchens, restaurant chains, QSRs, hospitals, caterers and so on. RTE/ RTC foods are not threats to chefs but are aids that let a chef do his/her magic better by leaving the mundane jobs to packaged foods.Chefs have more time to focus on innovation and speed. Using convenience foods as a base, the uniformity and authenticity of various signature dishes can be retained seamlessly. The future is very promising for the collaboration between convenience foods and HORECA industry.

Innovation is the future

In any industry, innovation is the real game changer. In the RTE and RTC space, players have reinvented their products in multiple ways, rangingfrom healthy snacks, vegan meals, allergic and, gluten- free to even superfoods. The future of India’s convenience food industry in most has numerous opportunities and possibilities for growth, development and innovation. We are yet scratching the surface; Indian food has gotten very popular amongst foreigners over the past decade and you can now find Indian Ready Meals across international chains such as Walmart, Costco, Whole foods, etc. India will play a major role in shaping the future of the global food industry going forward.

Presenting the most awaited and the crucial budget ahead of the Lok Sabha elections, Finance Minister Piyush Goyal mentioned that the government will focus on self-sufficiency in food and improving agricultural productivity with emphasis on organic food forms.

During his speech Goyal has cited the above agenda as the eighth dimension of the government’s vision.

“We also aim to create a healthy India, with distress-free and comprehensive wellness system for all,” added Goyal.

Also, as health- and hygiene-conscious consumers tend to adopt healthy eating options. Food operators have been forced to add healthy eating options to their food menus. Some restaurants have also started serving health food and organic food as their core offerings. And, this will be good news for all the restaurants serving organic staples and organic food players as the government now intend to focus on organic products and farms.

According to a report by FICCI-PwC, “Overall, the health and wellness food service industry will continue to grow as consumers become more conscious about their diet by trying to eat healthy, going for farm-to-table lunches, growing their own garden herbs, buying as much organic produce as they can afford, trying new millets and consciously avoiding junk as much as possible.”

The government in its interim budget also mentioned that it will focus on building digital India by creating more jobs in the sectors. Hence, we can see that the food-tech sector is going to grow at much faster pace. “We are poised to become a $5 trillion economy in the next five years and aspire to become a $10 trillion economy in the next eight years,” added Goyal in his speech.

Not only this, Indian food-tech industry after a brief turmoil that led to consolidation and exit of a number of start-ups, it is back on a high growth trajectory with the sector’s leading lights, Zomato and Swiggy26, raising huge amounts of capital this year, enabling optimisation of operations and a turnaround in fortunes.

“The consolidation frenzy saw as many as 24 mergers and acquisitions in the food technology space during 2015 and 2016 as against ~12 so far in 2017 and 2018. The sector has also raised ~US$950 million in Private Equity capital from ~60 transactions in the last 28 months.27 The recovery has been led by a reduction in delivery costs and market expansion with order volumes emerging as the primary metric for assessing growth that has increased from ~160,000 in 2016 to ~370,000 in 2017 at 130%,” added the report.

And, with India becoming the second largest hub of startups, we surely can expect more and more brands opening doors for us.

It is believed that customer is the king to drive sales at a restaurant but we often forget about treating our staff well. It is not just about serving your customer rightly rather it is about serving each other well.

And, as experts believe and often debate about that the top priority at any workplace and for that matter at a restaurant should be its staff and the people. “Our staff is our family and that is ingrained in our company's DNA; it's logical to build the company culture around this philosophy since majority of our days and nights are spent with our team,” shared Bhavya Kohli of the famous Pho King restaurant in Delhi, adding that they share a great personal rapport with each and every member of the team and make sure they connect with each other on a personal level.  “As far as making them happy, well, our team works hard and parties harder. Apart from this, we ensure that daily incentives are given for mini goals set and defined at each and every level of the organization,” added Kohli.

ALSO READ: https://www.franchiseindia.com/restaurant/how-to-manage-your-restaurant-staff.11433

It is sometimes critical that your restaurant staff has to be presentable. No matter how good the food is, how accessible the location is, if your restaurant staff is not approachable and competent, chances are customers are not going to come back. The interaction between your kitchen staff and customers can do more to increase or decrease sales than any ad. Your servers should help create a dining experience that ensures repeat visits from your customers.

“There is no doubt about the fact that every successful restaurant is backed with highly dedicated staff and team. We tell our people that they are not employee indeed they are the family and this is a family business,” pointed Manpreet Singh of the Pinch of Spice who takes care of his staff in all aspects. “All necessary benefits are given to our entire employee and in any condition if we have to go beyond for their job satisfaction, we take steps without giving a second thought,” he added further.

MUST READ: Hiring Staff For Restaurant Success

Also, in order to create a great work culture it is important to impart training to your employees and hire experts to make sure that there are no nuances added to it. The recent incident of a Zomato Delivery Scout eating food while on way to the delivery made several headlines as to what made the person to do this. "As a fast-moving and growth-oriented organization, Zomato has people from various walks of life as a part of its integrated vision. We believe strong mental health plays a significant role in productivity and the overall quality of work-life, across all levels and stakeholders within the organization. We are making an attempt to build an environment that encourages professional help. Regardless of a given employee's position or department, guidance from an accomplished professional,” said Deepinder Goyal, Founder and CEO, Zomato that has hired Dr Rohit Garg to train its employee and act as an invaluable component in designing a sustainable eco-system for the tech-delivery firm.

ALSO READ: Zomato Delivery Boy Eats Food, Video Goes Viral

Also, in addition to building a great culture at workplace for the staff, restaurants should must setup a learning and deployment centers.

A must - Begin with the big three: There are some of the factors that work all together towards a favorable outcome while opening a new restaurant. No eatery can succeed without these three i.e. - a great locale, a great gourmet expert / culinary talent, and a great concept. Firstly, your location should fit in your concept because accessibility is everything. A restaurant’s success or failure may vary in regards to the location. So, you want to get this right the first time. Pick the best location possible, the more accessible you can make your restaurant, both in terms of area and in a broader sense, the greater your chances of achievements. Exploring something new is always inspiring. Shaping the menu in accordance to trend is quite exciting as every now and then patrons love to try new dishes. Most importantly, every restaurant’s reputation lies with the chef of the eatery. Therefore, right chef is all you need to bring your dream to life. Lastly, choosing your concept is probably the hardest decision but it is the most important aspect to consider correctly.

Pick Your Restaurant Name: Choosing a restaurant name is one of the most important decisions one can make and at the same time it can be a lot of fun to create. An individual should select a name that resonates with the concept or that may reflect restaurant’s location or the clientele or simply can be a play on words. But, at the end of the day, it is all about creating a restaurant experience, an expression of who you are and what values you hold. One more thing, make sure to keep the respective name easy and memorable enough for the patrons to find your establishment as a whole. The possibilities are endless so choose wisely.

Create a Restaurant Menu: Fore mostly decide what cuisine to specialize in as well as what dishes are to be featured in accordance to the crowd you hope to draw. It’s an ideal thought not to have too many menu items. Too many choices make it difficult for your patrons to make a decision and even harder for your kitchen to make 100 different dishes. In addition to that respective menu design should be clear, concise, and easy to read.

Restaurant’s Design: When starting a restaurant, an individual should put a careful thought into how one can organize the layout to meet goals. This includes different tasks such as kitchen equipment, furnishings, tables, chairs, bars, artwork, etc. One might want to consider hiring a professional designer to help you stay on budget and to get the job done on time as in his expertise one can find the perfect balance to accommodate optimal seating as well as the perfection in design.

Hire the Right Staff: One major step of opening a restaurant is hiring staff to carry out daily operation of the restaurant. Consider all positions that needs to be filled at the restaurant before hiring staff. This include human resources management and supervisors, food and beverage purchasing, foodservice, and dishwashing, marketing and sales, public relations, accounting, and bar services. Staff is the heart of your business so; make sure to look for candidates with prior experience and a supreme ability to multitask and to work quickly and efficiently. Although, list may vary in regards to the unique needs of the respective restaurant business.

Visual merchandising is multi-dimensional and hoteliers can choose from various ideas when designing displays.  Most noticeably, merchandising is no longer considered an afterthought, it has emerged as something that restaurant and foodservice owners now consider a must – something as important as the kitchen design and the menu.

The key to designing a successful display is by conceptualizing brand’s value and mission onto the interiors and the menu. Merchandising utilizes product placement and displays to drive sales. It's an art form that relies on data and understands what drives consumers. When done well it pushes a brand narrative that evokes something aesthetically pleasing and relatable. It can also provide touch points so consumers understand how to interact with products, especially at a time when the customers are distracted.

The intention of visual merchandising is to create stopping points and increase customer’s curiosity.  It's very effective to be able to do that during the festive season as it tends to be a pretty rich and deep merchandising environment. Below are the sure shot ways to ace the visual strategy:

Color Is King: Color is powerful; it can either make or break the store’s visual displays. The hotel or the foodservice joint might have an erratic display but if the colors coordinate well, the display can still be a work well together. Consider using contrasting colors or monochromatic colors for creating intriguing and eye-catching displays.

Start with Merchandising: Most new restaurant and foodservice joint incorporate merchandising displays and areas right from the start. Smart owners have their interior designer work alongside a merchandising consultant so there is no need to redesign your restaurant when you decide to put a merchandising program in place.

Use Menu as a Power Tool: Menu is the greatest marketing tool and should be used beyond simply listing the dishes and their prices. The average customer will spend around three minutes looking at the menu, so it needs to attract them to not only order the most profitable items but want to order more than just one. The menu should be designed in such a way that it entices the customers to come back to try other dishes.

Create a Focal Point: Where does the viewer’s eye focus on your display? Do their eyes move toward a specific location on the display or are they confused about where to look? Create a hotspot--or focal point for the customers. Examine your display from the customer’s point of view to ensure that they can easily view the hotspots and merchandise. Remember, the focal point is the food service and customer service of the restaurant, not a visual element you use to add to the story.

Tell a Story: Use powerful, sales-enabling designs to display the USP of the restaurant. By telling a story, the customer understands the offerings better and enables the buying decision.

Use empty space wisely: The section between the displayed merchandise and the ceiling is the most underutilized. This space can be used for many different things, like signage providing information about restaurant or the star staff members. You could also display customer testimonials with the customer’s name and picture.

Visual merchandising tells the story of a brand. It's not just about product placement in a store but also about enveloping customers in an experience. At a time of increased competition, thoughtful merchandising can be a key factor for increasing sales. Visual merchandising can create a deep connection of the brand with the consumer.

The food service industry is at the cusp of a massive growth, wherein we can see a fantastic double digit growth over a decade, all thanks to the changing consumer behavior and eating out trend.

With an aim to reach Rs 5,52,000 by 2022, the food service industry is growing at a CAGR of 10 per cent. “There is a huge consumer market, changing consumer habits, increase in disposable income, making the industry bigger and better,” shared Unnat Varma, MD, Pizza Hut India Sub Continent and Chairman, FICCI Task Force on Food Service Retail at FICCI’s Foodzania 2018, adding that changing landscape of the food service retail industry is largely driven by the changing consumer behaviour which can lead the sector for a sustained double digit growth over a decade.

Over the last 15 years the sector has seen many changes. Initially, it was about international brands making inroad into the Indian market, more influx of home grown brands turning into organized restaurant business. Then, came the phase where there was too much supply, but the demand from consumers was stuck giving a tough time to the restaurant industry. But, today the sector has seen a right quantum of things and supplies. The consumer market has become huge, they are willing to pay more and are ready to experiment, there is a sudden rise in disposable income and new age start-ups are mushrooming everywhere.

“With the advent of newer technology, the industry has seen a paradigm shift with consumers opting for ‘dining out’ experiences, making it an important partner for the beverage alcohol sector,” added Jagbir Singh Sidhu, COO- (North), Diageo India.

Also, the new age technology disruption is giving a new twist to the business. There is no denying that with advent of online or web-based ordering, the whole business about home delivery is revolutionized. “Internet penetration and smartphone usage has increased the demand for specialised and gourmet food,” mentioned the FICCI-PwC Report, released on the sidelines of the event.

Commenting on the same, Rahul Singh of The Beer Café added, “Next 10 years are going to be the golden decade from the perspective of consumption,” pointing that the food aggregators in increasing the consumption of outside food. He said that they are the creators of behavioral change among consumers that is going to increase propensity of dining out.

Hence, we can see that the food service is going to see a massive change and disruption giving new wings to the home grown brand and paving way for international brands penetrating deeper into the Indian market.

India continues to be the fastest growing economy in the world with some of the factors like young population, increasing disposable income, demographic changes which actually turns right the consumption and also offer restaurants and hospitality business a considerable opportunity to grow. Despite all the right ingredients we still do not see much of VC and private equity investment in the brick and mortar restaurant business.

Also, there is a sudden shift in the venture capital business. In the last two three years a lot of venture capitalist have invested in the food technology or the restaurant space. Majorly there were two things happening- the large ticket venture capitalists, people who were able to invest about $60 MN or VCs who are back investing traditionally into the core technology products and hence, food and food service at large doesn’t feature as an area of interest for them.

“There is no denying that you are putting in money to get a good return and so there will always be market size, scalability, valuation and most importantly the person you are backing,” shared Sumer Juneja, Partner, Norwest Venture Partners.

The issue which has come in the past in the restaurant space is about the scalability of the concept and the model, pricing it in the right way to make the investors earn money. “The scalability is becoming more apparent and I think investors have gone through a cycle in which they understand which formats can scale,” added Juneja.

India is going to be a low average value market with a very high volume and people tend to move towards QSR and other such formats where there is high volume. The GDP per capita economy is not going to change overnight and expenditure will take time. It is the 7-10 years long marriage between the investor and the brand. There has to be a price ride and there is no point getting a very sweet deal either way and then fuming out later. “One of the key factor in investing a restaurant is the sustainability. It all depends on the life span of a brand. For eg: earlier the life span of a casual fine dine was 4-5 years which is now coming down to 2-3 years. So, you should always look at the flexibility and how food is adapted to the change and constant menu innovation because most of the time restaurants that doesn’t adapt themselves to the change fails to sustain in a long run,” said Biju Thomas, CFO, Adiga’s.

Commenting on the same, Digvijay Singh, COO, Indian Angel Network pointed, “The innovation part in restaurant business also has to be taken care of.  Restaurant owners need to come up with innovative ideas of their dishes, the way they deliver overall experience to the guest. Restaurant has a shelf life of 3-4 years and that’s where struggle for equity come in.”

No matter how innovative the concept is if you are not passionate about it and your model is not sustainable, you are not going to survive. And, for investor sustainability is the key to invest in a brand.