Young Turks: Talent, costs & infra top at Zomato meet

The Indian F&B (food and beverage) industry is estimated to touch USD 330 billion by 2013. Home-grown brands and foreign fast-food giants are moving in fast to bite into this growing market.

Investors are pumping in money and some promoters are taking the IPO route to fund expansion. Specialty-restaurant-owner food brand Mainland China is set to raise Rs 182 crore from the market. So the F&B industry is poised to be India's next sunrise sector and provided perfect timing for the setting up of Zomato, India largest online food and lifestyle guide.
Young Turks Deepindar Goyal and Pankaj Chadda, the brains behind Zomato are excited. At the first Zomato Indian Restaurant Summit 2012., restaurant-owners,VCs and foodies came together on an upbeat mood and explained to CNBC-TV18 their views on the key challenges of hiring and retaining of talent, and maintaining margins in a fiercely competitive market. Also watch the accompanying video Deepindar Goyal, Zomato India: The biggest problem is hiring and training. Though that's the problem faced across the board, the restaurant industry requires people to be trained with a specific set of skills and then actually retaining them, that’s one of the biggest topics.
Designing the menu is another big topic and if you get that wrong, it actually spells doom for a restaurant. There are other things such as marketing and financing, so we are planning to touch each of these topics over the course of the day. But the industry is clearly witnessing growth pangs and the poor availability of quality staff and retention are the big spoilers. Sohrab Sitarm, owner, Tabula Rasa: The biggest challenges the industry faces is finding the right people followed by retaining the right person. However finding the right person tops the list because there are not too many hotel management institutes which can nurture talent, they are very few. So only a few get picked up by probably either the Taj or the Oberoi's. Talent isn't the only concern the F&B industry faces. High rentals and a poor supply chain are also impacting plans. Manu Mohindra, MD, Under One Roof Hotel Consultants: Infrastructure is giving this industry a backseat. For example, for a supplier truck to travel 250 kms in the US, it takes one-and-a-half hours, the same distance in India takes seven to eight hours.
Cold chains and Wal-Mart don't exist thanks to our politicians. Cold chains would help the industry develop faster and maintain high growth. A tendency to discount and give out deals is also hurting the industry with margins coming under pressure. Last year saw over a million deals and bulk discounts being bought by consumers in India. Abhimanyu Rana, co-founder, Route 04: One loses brand value because of discounting not because your brand's perceived value goes down, but because of new customers who come in for the discounts and naturally not our target audience. Kabir Advani, partner, Bercos: We at Bercos would not recommend discounts as an offer. We would probably do it to build brand loyalty and reward loyal customers. They could be limited period offers on our home delivery menus to make people order more often but it would not be a regular discount. Consistent food and service quality is also imperative as brands expand operations. For brands looking to grow by the franchise route, maintaining the same quality standards across outlets is a big challenge. Ashish Kapur, MD, Moods Hospitality: We don't have standard suppliers of tomatoes or onions or other ingredients and this impacts the end product. So I think that's an ever-going challenge which we are trying to, as food retailers, overcome. The second aspect as always is cost. So if you look at real estate and labour costs, they're very high and that's another challenge. Food retailers must also overcome the temptation to spread themselves too fast especially through the franchise route. Zorawar Kalra, Founder, Punjab Grill & SFI: Franchising is popular but I would rather open my own restaurants especially when funding is not an issue. So if there is funding, then open your own restaurant, especially if the location is fantastic in certain areas where you want to grow faster. But honestly its better to wait for franchising.