Family-run restaurants look to malls for growth


March 3, 2008

Spread of organized retail has brought both expansion opportunities and growth pangs for stand-alone eateries

Saumya Roy, Mumbai – MINT, 3 March 2008

There’s nothing even remotely North American about Tushar Jaiswal’s Red Indian pizza – replete with paneer, red peppers, onions and capsicum toppings. But it’s held its own against exotic offerings from large pizza chains in Vadodara.

 Jaiswal’s Pizza Inn vegetarian pizza chain has grown to three restaurants over the last six years, even as some overseas brands have had a hard time keeping their only outlet going in the city. Jaiswal’s Indianized pizza chain is now set to make a debut in other cities – in malls that are cropping in various parts of India.

Kshitij, a chain of 11 malls being developed through a $80 million (Rs319 crore) domestic fund raised by Kshitij Investment Advisory Co. Ltd, part of the Future Group, has hired a food and beverage chef to help stand-alone restaurants expand into malls and groom them to become a popular chain of food outlets that offer standardized food and a similar experience wherever they might be. And Jaiswal’s Pizza Inn is its first assignment.

Dhiren Kanwar, a chef who left his catering business to start Kshitij’s food division, has signed on Pizza Inn, along with several large food chains, for its malls in Vadodara, Ahmedabad and probably Pune and Jaipur. Kanwar who says his division was set up after consumer research showed that people would come into malls as much to eat as to shop and “wanted something different” will seek to bring a different flavour by signing on more such local brands and run something of a finishing school to help grow them.

The growth of organized retail has brought both expansion opportunities and growth pangs for India’s traditional, stand-alone, family-owned restaurants. They have emerged as magnets in malls where as many as 80% visitors to a mall may go to food courts compared with about 65% who visit hypermarkets and 50-55% who go to department stores, according to estimates by the Retailers Association of India, an industry body. And with as many as 320 malls coming up across India by 2010, according to an estimate by real estate consulting firm Jones Lang LaSalle Meghraj, developers are strengthening food offerings to create differentiation for their malls.

Developers are also seeking to reach stand-alone speciality restaurants in new locations to fill the growing need for varied eating experiences.

Kanwar, who has been surveying eating out options nationwide says many cities are usually less vegetarian than expected and there is demand, but no chains for chaat or thali, a reference to snacks and a complete meal on a plate, respectively.

Insights such as this have encouraged developers to fill these gaps in formal and informal ways. At Mumbai’s Inorbit mall, the management realized that the mainly vegetarian area (the mall is located in Malad) would need the services of a vegetarian who understood such palates and worked with a first-time operator to design and operate her eatery.

Jaiswal says his restaurant could start serving meat as he moves into markets outside Gujarat, where the population largely consists of vegetarians. Jaiswal, who left the family’s construction business to start his pizza chain after a trip to the US, has adopted American inspired management systems, equipment, ovens, and look and feel and coupled with the Indian taste, encouraging Kanwar to sign him on.

Now Kanwar will train Pizza Inn’s staff on how to deal with the typically large number of customers at malls, maintaining quality standards, design a kitchen intended to be open for customers to see, design seating and train staff on food safety and hygiene.

“Many of these restaurants know about the local market tastes and have pruned their menu to fit what customers want,” says Kanwar, who has been scouting for restaurants across dozens of cities over the last six months. “What they need help with is polishing their branding, service and presentation.”

But that polish may also draw away from the distinct character that makes these stand alone restaurants popular, says Devangshu Dutta, chief executive of New Delhi- based retail consulting company Third Eyesight.

“Restaurants are typically single entrepreneur ventures where it is hard to replicate the same thing across locations. But scaling up is also akin to dumbing down. To scale, you have to make things process-oriented and person-independent. In this process, something good will go, along with some learning of standard operating procedures.”

Kanwar will have to maintain this balance as he signs on more brands and prepares them to become professionally-managed chains. He will ask restaurants to have manuals specifying how long each cooking process will take, call brand designers and architects to design the look and feel of the restaurants, and help them tweak menus.

Jaiswal whose maiden mall restaurant will open at Kshitj’s first mall to open in Vadodara in March, will send design plans for approval to Kanwar.

All of this will help him grow and compete with large pizza chains elsewhere too, says Jaiswal, who now works out of an office above the restaurant supervising 200 employees- an increase from the 35 he started with.

Some of his time goes into ideating on what his first meat pizza should be.