August is a special month for Riyaaz Amlani. His F&B company Impresario Handmade Restaurants - which is backed by private equity firm L. Catterton, and includes restaurants like SOCIAL and Smoke House Deli - has completed 20 years this month.
CEO and MD Amlani says the pandemic did take a toll on the company, but there is also the expected growth of FY23 closing at INR 600 crore, a 35 percent jump from FY22 to look forward to.
In a candid chat, the entrepreneur spoke about the evolution of the food industry and their expansion plans. Edited excerpts:
In what ways has the food and beverage industry evolved in these 20 years?
When we started off 20 years ago, there was very little in terms of options and choice. In terms of evolution, what has happened in the west over 50-60 years has happened in India in 20 years. From having no options to having fine-dining restaurants outside five stars, then casual dining which came about 10-12 years ago, the café-bar culture which has also started happening. Earlier, there were just five stars and Udipi restaurants and maybe 3-4 restaurants which we would frequent. Also, it’s evolved from a time when India was going out once or twice a year to mark special occasions, to now going out 14-15 times for a meal in urban areas.
From needing a lot of money to set up a restaurant to now starting a website and opening a kitchen from your house, it has all become quite democratised and decentralised. There are so many newer ideas coming all the time. The last 20 years have been extremely eventful. We have gone through two-three different stages of evolution in the last 20 years.
The F&B industry was hit hard during the pandemic. What has been the biggest challenge for you in these two years, and some of the positives and negatives that have come out of it?
The pandemic was a very tough time for the restaurant industry. We pretty much had to figure out everything on our own and it is our people who carried us and not vice versa. They made sure that the fires were burning in the kitchens. They were staying in restaurants for months on end, not going home, looking after the restaurant, making sure there was some kind of revenue.
Our resilience has been shaped over the years as well. The restaurant industry has gone through its share of ups and downs. We’ve had a lot of net practice before the Covid test match, and I think it showed how resolute the industry is. It has made us stronger, more efficient and more tech-savvy. It made us look around for different ways of survival, and I think we have come out leaner, meaner and stronger from the Covid period.
There has been a lot of good that has come out of it. A number of really unique restaurants have come up in various parts of India and they are no longer restricted to Mumbai and Delhi. There are fantastic dining options all across and that’s something to be celebrated. There is region-specific cuisine as well as very specific international cuisine. There is healthy food on one side and complete decadence on the other. India is eating out 12 times a month, whereas in Singapore, people eat out 65 times a month. So we still have that headroom for growth which is very exciting.
In terms of the negatives, I think a lot of me-too restaurants have come up, where people just open up a restaurant for the sake of opening one and don’t really have anything original or authentic to offer.
Have you managed to tide over the losses during the pandemic?
In 2021 we were completely shut for a good part of six months and only partially allowed to open for the rest, so we suffered a lot. However, we have become a lot more efficient. We have managed to bring down a lot of our operating costs and coming out of pandemic has been great. Compared to the previous year’s first quarter, we are 10 percent over and above this year, so it’s a very strong recovery.
During these two years, you also started focusing a lot on the cloud kitchen model. With people stepping out again, is that going to take a backseat?
Delivery as a business is not competing with dining out. It’s competing with home-cooked meals. It is a different avenue and we are focused on both. Delivery had its biggest moment during the pandemic. Having said that, I think delivery will continue to grow as a business model and we are going to take it as seriously as we take dining out.
SOCIAL is one of the brands which has a pan-India appeal. What are the plans ahead with that, especially when it comes to tier II cities?
SOCIAL as a brand has a real resonance with customers in terms of frequency and model and ROI better than any other QSRs. I think it has real relevance for the Indian audience. If you think about how a café or a social space for India should be, I think SOCIAL has really been able to capture that.
Lines are blurring between tier I and tier II cities. When it comes to aspiration and disposable income, I think tier 2 cities are better placed now. Earlier the India business story was only about the metros and mini metros. Now the real India business story is about the new cities. We intend to add another 12-15 outlets of SOCIAL every year, penetrating existing cities and entering new ones. We intend to take the count to 100 by the next five years.
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