Editor’s Note: This is a revised version of a previous article. It retains the central point we wanted to make and eliminates the secondary points from the previous version. Hopefully, the version below is more focused and to our point.
Fast food is simple, isn’t it? When we go to any fast food place, we order, eat or carry out without giving the slightest thought to the engineering, machinery and technology that goes into making it work. And what is the “it” that has to be engineered? It is the process technology to make food preparation simple and to build processes that ensure the same taste & quality regardless of where in the world the food is made. It is human resource training and management technology that teaches employees to treat customers the same way. All this goes under what is called the comfort of the same look and feel.
The organizations that have mastered this technology build successful global brands. And the society that enables such organizations to succeed becomes a globally envied society.
All these thoughts came to us when we read two NYT India Ink articles this week. The first is a cute article about a quaint little Delhi store by Aayush Soni :
- “In 1963, the year Steakhouse opened, neighborhood kirana stores, as they were called then and now, provided for such daily needs as tea, coffee, cereal, butter, milk and toiletries, and often were manned by a middle-aged gentleman and sometimes his other family members, who were, more often than not, refugees from across the border.”
- “These days, extra virgin olive oil, Italian noodles and Darjeeling tea all jostle for space on Steakhouse’s floor-to-ceiling shelves. At one end of the store, assistants clad in blue uniforms pull out slabs of honey-glazed ham, bacon, sausages, salami and slice it for customers, both Indian and foreign, who listen to soothing jazz music playing in the background while waiting”
The key lesson of this article can be derived from the paragraph below:
“The question of who will take over the store
to cater to the next generation’s tastes is unresolved. Mr. Singh’s
three daughters are married and haven’t showed much inclination to enter
the family business. Mr. Shankar’s only daughter is settled in the
United States. “We’ll just run it as long as we can,” Mr. Shankar said.”
This is the story of many cute quaint stores all over India. Founders of such stores rarely have the vision to replicate and franchise their idea across the span of India. If “Steakhouse” can generate 25 million Rs. of revenue in Delhi, how much can a chain of “Steakhouses” generate? And won’t such a chain live on to next generations with smart professional management?
Contrast this Delhi store with another cute & quaint family-run store. In 1974, Mafat Patel, his brother Tulsi Patel & sister-in-law Aruna Patel opened an Indian grocery store in America which they called Patel Brothers. Unlike the founders of Steakhouse of Delhi, the Patel family did not remain content with just one store. Today, they have 47 stores located in the eastern and central USA.
And they have done in the right way. Every Patel Brothers store has the same look and feel; it serves the same or similar quality products at a fair price. This is Indian-American vision and implementation at its best, a successful mix of Indian store owner tradition and American operational technology.
Why can’t Indian society do this? There are many food concepts in India that are screaming for such franchising based expansion. Back in the 1960s, Udipi food went national – superb, clean, wholesome food that came out of the town of Udipi in the state of Karnatak located on the southwestern shores of India. They say the food has its origins in the Math established by Madhav-Acharya (1199-1278 CE), one of the four great Acharya of Indian metaphysical thought. Today, there is hardly an Indian that hasn’t eaten a Masala Dosa or Idli-Sambar. Even Wikipedia calls Udipi food as world-renowned cuisine.
This food is ideal for franchising. It is simple, easy to make and can be eaten either as a snack or a meal. But no one in India has thought of franchising it.
Take the classic Mumbai snacks called Bhel Puri, Pani Puri or Dahi Batata Puri. These are just begging for franchising. Our own favorite Mumbai food is the classic Dahi Misal, am incredibly tasty and healthy dish. Our usual lunch in Mumbai is Dahi Misal, Pav or Iranian bread with Pivush, a heavenly frozen Shrikhand-based drink. A tasty and filling lunch for Rs. 90 or $1.50.
This food is not unknown to European companies. See, for example, the You-Tube recipe for making Dahi Misal from Family Nestle Kitchen.
Can you imagine a franchised chain with clean bright restaurants offering Idli, Masala Dosa, Bhel Puri, Dahi Misal of the same quality at a fair price all over India? People would throng to such fast food chains, wouldn’t they?
The fault is not of the Indian consumer. As Neha Thirani Bagri of NYT-India Ink pointed out in her article A Growing Taste for U.S. Fast Food in India, Indians are gravitating to fast food restaurants for convenience, fair prices & decent food. But this fast food is mostly American. As Neha writes:
- “India has long had a reputation as being unfriendly to foreign businesses, but when it comes to fast food, international chains are being warmly welcomed by a young, upwardly mobile population.”
She also writes:
- “In the nearly two decades since international fast food chains like McDonald’s first entered the Indian market, the customer profile and demographic for fast food restaurants in India has dramatically changed.”
- “As India has one of the youngest populations in the world, with nearly 65 percent of the population under 35 years of age, more young professionals are eating fast food in urban India. In Mumbai, nearly 40 percent of the people eating out are young adults, Mr. Jatia said.”
Ms. Bagri’s article is entirely about importing American food ideas into India, a very small portion of the Indian food space. These American fast food operations are run by Indian organizations and Ms. Bagri interviewed the CEOs of these Indian organizations. We wish she had asked these Indian CEOs about their ideas for Indian fast food restaurants that sell fast Indian food like Idli, Masala Dosa, Bhel Puri, Dahi Misal and other delicacies.
Unfortunately, Ms. Bagri did not. But that is a central question to us. The reality is fast food in India is growing because these chains deliver a bright clean store with food of reasonable quality. So Indians can meet there, chat, spend time with family & friends without the formality and cost of a high quality restaurant. But we have never heard any one in India rave about the greatness of food served by McDonald’s or Burger King. So why don’t Indian organizations build their own branded fast food chains that serve Indian food & snacks? Is it the Bollywood syndrome?
Look at Bollywood films. Indian producers and investors are much more comfortable in financing films whose central theme has been successful before. That is why so many Bollywood films are “adaptations” of films from other parts of India or from Hollywood. According to a famous Bollywood director, the key producer demand is for a “new story that has been successful before“. May be that is how Indian licensees of US chains think – that it is much safer to import an American fast food idea than build their own.
Will this change tomorrow? After all, the growth of these chains is also delivering the franchising technology and implementation experience to Indian businesses that license the brands. We hope that one day these Indian businesses will use what they have learned to launch similar clean, efficient chains to serve Indian food. If they do, they would be able to take their Indian brands into America and the rest of the world.
All this requires controlled risk taking and a desire to take your brands to new heights & lands. Indian businesses don’t have that today. Heck our Indian writer friends at NYT India Ink can’t even think about it.
Send your feedback to firstname.lastname@example.org Or @MacroViewpoints on Twitter