F&B Speciality Cuisines

What is common between Turkish, French and Japanese cuisine? These cuisines are not very familiar to most Indians and even fewer would have actually eaten them. However, with Indians increasingly travelling overseas and also more ‘experimental’, the neighbourhood Chinese takeaway outlet or Italian themed restaurant is not good enough; for a business meeting or a weekend visit with the family.

Restaurateurs have also sensed a business opportunity in this niche market, and are offering these ‘exotic’ cuisines, largely in the key metro cities. For instance, Sakae Sushi, a Japanese specialty restaurant recently commenced operations at Ambience Mall, Gurgaon. Lilian Foo, EVP of Sakae Sushi restaurants, said; “Japanese cuisine is fast gaining popularity in India, and it is not just limited to outlets in five-star hotels only.” They are not alone, Simply Fondue, which recently commenced operations and it offers Swiss cuisine at its outlet at Nehru Place, New Delhi.

Apart from offering ‘authentic’ cuisine from the country of their origin, the layout of these restaurants reflects their traditions and heritage. The cost of setting up these speciality restaurants can vary between Rs 50 lakh to several crore (excluding real estate and allied costs).

The domestic food service market is estimated at Rs 68, 000 crore annually and these speciality restaurants constitute less than one per cent, point out experts. Also, the risks in this segment of the food service industry are rather high, with only one in three actually breaking even, and even a smaller proportion that earn a profit.   

And, that’s largely depended on whether these restaurants have been able to ensure their relevance with their target audience here. For instance, 5 All Day, a European-cum-Mediterranean cuisine restaurant in south Mumbai, shut its operations in less than six months, and they are not alone.

“Lebanese, Mexican and Oriental cuisines are creating a strong foothold here. The rest of the ‘emerging’ cuisines have a rather thin share in this market,” says Benu Sehgal, VP of DLF Malls Saket. This popular south Delhi mall currently has several speciality restaurants operating at its premises, given large foreign tourists visitors to its mall, coupled with affluent residents in its vicinity.

QSR or Fine dining

Selecting the format of a speciality restaurant is a rather tricky decision and it involves extensive research on consumer behaviour, amount of capital expenditure planned and the target audience, amongst other factors. According to the results of a survey amongst 10, 000 respondents by Retailer, it highlighted the following trends:

     QSRs are ideal for an affordable and quick meals

     Fine dining targets SEC A and higher income families, and senior executives

Ala Turk which offers Turkish food and Arab-centric Zaitoon have selected QSR, given that a majority of their consumers spend Rs 150 – 200 for a meal.  In contrast, French- themed La Crepe Rit and Yeti which offer Himalayan cuisine have selected fining dining. Consumers typically spend more than Rs 1,000 per head for a meal at such restaurants. Mandeep Singh Anand, Proprietor of La Crepe Rit, said, “We are targeting high-end consumers and our restaurant layout, menu offerings and allied features reflects these factors.”

Also, these speciality  restaurants are increasingly located in well established malls, like DLF Place, Saket, South Delhi, and Phoenix mall, Lower Parel, Mumbai. And, that’s because a large number of affluent consumers who are the target audience for these restaurants, also visit these malls. In addition, at DLF Place, they may charge higher monthly rentals from these speciality restaurants, but often take a much smaller share in the restaurant’s revenues, which is viewed as a viable business model to operate on. Franchising, too, has been well established in a range of sectors, but it is widely viewed as still too early for this segment of the food service industry.

Social media strategy

Specialty restaurants, in a majority of cases, do not have a budget for advertising and allied promotional activities. Instead, they rely heavily on word-of-mouth recommendations and participation in social media, including Zomato, Justeat.in and Food Panda. In addition, food festivals, organised by these restaurants and their respective embassies, have also emerged as a popular marketing strategy.

For instance, New Delhi-based French restaurant Chez Nini updates its Facebook page with changes in their menu and promotional activities, such as a complementary glass of wine for women for the recent Mother’s day. They are not alone.

Poco Loco, a Spanish specialty restaurant, at Bandra, Mumbai, on its website and Facebook page highlights various discounts on key Spanish holidays, coupled with food and wine tasting festivals.

Return on Investment

And, despite the efforts to differentiate themselves from restaurants that offer conventional Indian cuisine, the ROI for these speciality restaurants may at best be in single digits or even absent. That’s once again related to whether an overseas cuisine has been able to successfully carve a niche amongst its target audience here.

Sonia Mohindra, a reputed food and beverage consultant, said, “It takes times for these restaurants to establish themselves, and ROI and profits, can be several years away.”

Nevertheless, Ala Turk is confident of its growth prospects and is focussing on expanding beyond NCR, to Goa and Kashmir, given a large number of tourists in both these locations. “We provide dining options for the middle and upper middle class families, and our cuisine has quickly become popular with patrons here,” said Sercan Unsal, Country Head of Ala Turka chain of restaurants. Clearly, this segment of the restaurant industry has seen several players enter recently, but it remains to be seen how many can actually sustain their operations over the next few years.