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Orange Tomato A Multi-Brand Restaurant Chain

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Shibu Thomas, a household name in the hospitality industry, marked his entry with the launch of the Ice and Spice Café and Cafe Bean Stalk several years ago. He is also the man who undertook the franchise for FTV Paris’ F Bar and Club Nero. Gilbert Soman, on the other hand, was involved in co-managing his family’s chemical business. He later gained significant experience in franchising with some of the renowned international apparel and footwear brands across India before teaming up  with Thomas to start the very first open-format Oval Bar at , Bangalore. Suhani Mehta, an accomplished PR professional and senior manager in the pharma and finance space, was also a passionate food connoisseur. It was this love for the food industry that made her take the giant leap to join the two directors to form the Orange Tomato.


Bangalore then had the right mix of people and floating population of IT and BPO sectors. Areas like ITPL and Sarjapur Road saw the influx of a whole new kind of crowd. Since these locations were self-sufficient, people did not feel the need to step out for movies or shopping.

Around this time, Thomas noticed that restaurants were mushrooming everywhere. He candidly shares: “It sounds very easy to open a restaurant. If you have just a single unit and your staff suddenly quits, you are left high and dry. So it is a big challenge, considering the growing number of restaurants in Bangalore. I come across many people every day; I see them opening or shutting down their units. Basically, it is just changing of hands; the management gets taken over by somebody else. I always tell people that there is no bible for success in running a restaurant. Even the top guys in the industry have tasted failure. Apart from a few elements, such as the location, there is absolutely no formula to make it take off.”

Oval Bar, Binge, Shitake, Twenty.21 and Yoghurt Hub
The Oval Bar, situated next to Mantri Mall’s food court, is an open-format bar. Apart from the range of beverages it has on offer, it also serves a wide assortment of finger foods. Thomas had to weave a finger food menu due to the mall’s strict regulations on cooking gas installations, which is allowed only within a particular parameter of the public space.

“So the bar actually survives on induction cooking with crispy fried finger foods on its menu. Initially, it was a great challenge indeed,” recalls Thomas. “Once you have set up something, people know that you are in the industry and you are in a mall with more footfalls; the word then just spreads around. I remember when Mantri was building its mall. Then, in Koramangala was the one that enjoyed all the limelight. However, Mantri would keep a close eye on Forum to see the kind of crowd it was pulling in. That is how the connection starts off,” states Thomas.

The Oval Bar did receive a good response initially. Even though the team had set different targets, they were down by 60 percent in the very first year. The figures picked up gradually.

Soon after the Oval Bar, Shitake restaurant was launched at the , Bellandur. “Initially, we had the concept of a sports bar in mind but Mehta suggested having a restaurant with a parallel bar. This way we could split the 5,000 sq. ft. area. Today, we are so glad to have listened to her,” says Thomas promptly.

But it was not easy to expand Shitake. The idea of centralised kitchens did not work out as the first restaurant that started in Bellandur was 10–15 km away from the next one.

“A centralised kitchen doesn’t work practically,” explains Thomas. “We could have a centralised place to store our vegetables, which we plan to start after we cross 10–12 restaurants. We do have plenty of food stuff, which is not part of Orange Tomato but we might club everything together and sell it,” he adds.

According to Mehta, Orange Tomato was created to be very unique in its offerings. The Shitake restaurant offers a very different oriental experience. The grand figure of the Buddha, placed in the centre of the restaurant, lends an aesthetic appeal to the interiors and transports one into an oriental space. The restaurant offers a large variety of Japanese, Korean, Malay and Burmese food.

Twenty.21 offers only European cuisine. It has options for Lebanese, Italian, Spanish and other European food all under one roof. “What happens very often is that a customer prefers a soup along with pasta instead of opting for a full Spanish main course. Keeping this in mind, we have arranged for a blend of different things, while keeping it still very modern. We also have an all day breakfast menu,” informs Mehta.

The Binge restaurant offers a wide variety of cuisines, which include North Indian, Continental and Chinese. The Yoghurt Hub, on the other hand, is a unique kiosk, offering fresh yoghurt in fruit, chocolate flavours and smoothies. The first hub was launched at the UB City Mall, Bangalore.

“It had been a while since Shitake was opened and by then, we were well grounded. After the opening of a second Shitake, we knew exactly what we were doing and where we planned to be. It was the first time we had created such a menu for Twenty.21. We hired a chef who has been working around this kind of cuisine for many years now,” she reveals.


Speaking on similar lines, Thomas adds: “The staff goes through rigorous training. The chef also trains the staff on understanding, presentation and tasting sessions before the restaurant even takes off.”

Most of the suppliers based in Bangalore are able to get stocks from across the globe. Pork and ribs are now readily available. “The days are gone when one would go to the market early in the morning to pick up stuff. Today, everything is delivered to your doorstep. There are some people who are extremely picky and would still choose to pick their own stuff, but not many people do that now,” Thomas notes.

Breaking Even
According to Thomas, barring the liquor license, the initial investment could amount close to a whopping Rs 90 lakh. A lot depends on how lavish one wants the interiors to be. Rental deposits also come into the picture besides investing on kitchen equipment.  “In terms of the investment that we have made, we managed to cover it up in 14 months. Setting up a regular lounge bar means shelling out at least a crore, but we managed this under Rs 19 lakh,” Thomas states categorically.

Customer Attitude
All brands follow the same format of around 3,000 sq.ft. area in a mall, but cater to different audiences. Says Mehta: “All our restaurants have a different target audience; not in terms of price but in terms of age profile. A place like Bellandur would attract a lot of families and ITPL workers, while Forum Value Mall has a mix of young people – anyone between the age group of 25 and 60 years.”

International cuisines have found good acceptance in the Indian market. People are more open to experimentation with different kinds of food. They now demand for the kind of food they want at live kitchen counters. Thomas throws more light on this changing trend. “Live demos are in. People are always on the look-out for something different and appear to be tired of the regular stereotyped Indian stuff. There is an increasing demand for Lebanese food, but if I had to have an exclusive Lebanese restaurant in Bangalore, it would definitely not work out. In terms of rental in a mall and for people to come there every day to dine, it is not going to work out,” he says.

According to Mehta, what people want is a good blend of healthy food and something that is as per their liking. The buffets do well, especially at ITPL, where the crowd just goes for a quick fix and wants a lot of variety. Both the restaurants have a buffet system, something that the IT crowd eagerly looks forward to.

The Oval Bar, which is located in old Bangalore, does not have a broad minded crowd coming in. Initially, the open bar concept was a big challenge as people were very hesitant to walk into the bar for lack of privacy.

Challenges
Labour continues to remain a major challenge. Trained staff, who reach a certain level, usually jump to other places. Thomas, who is well aware of the repercussions of such events, gives it his all to keep his staff happy and motivated. “We give all our units an accommodation, which is something that most restaurants do. We accommodate at least six people in a house at each of our units. Whenever there is good business in terms of targets achieved, we give them a separate amount, which is a percentage out of the sale. That’s what keeps them going; otherwise they will not be motivated enough,” maintains he.

The constant mushrooming of malls in Bangalore is another cause for worry for him. He finds the costs riding up through his nose with rent and marketing charges.

Liqour licenses are another big challenge. Shibu points out that in the last 20 years, the Karnataka state government has never issued any liqour license. “If you have a license and want to sell out your restaurant because it is not earning you sufficient revenues, you can still get as much as you quote. The present rate is ` 1 crore.”

Thomas had to resort to renting out a license, which is possible for a short period of time on contract basis. The food and corporation license also comes at a price. Other related licenses are not very expensive but involve heavy bribery.

Technically, according to the law, liquor can be sold in an open place. Thomas says that different states have different sets of rules. For instance, in Chennai, one would require at least a minimum of 20 rooms to serve alcohol. He says: “The liquor license in Mysore is more expensive than what it is in Bangalore, as there are not many licenses and only a few people actually have them.”

The license in Hyderabad per year is ` 27 lakh. Brands located within one building can share the same license. “It is as good as keeping a lakh of rupees a day,” he states. “The restaurant license comes under the form of CL9, while CL7 is for licenses with rooms. So, there are many divisions. Those are not so expensive and would probably be half the price. Mumbai licenses are very cheap and would not cost you even `10 lakh rupees,” he concludes.

According to Mehta, “When you start with a restaurant, all these challenges come your way but if you are focused and know where you are going, then I think it is just about managing everything. If we didn’t have the passion for it, we wouldn’t have started it in the first place. I think in any business, you need to have tonnes of capital for each aspect and we take it up one step at a time.”

Being in a mall also has its benefits and pitfalls.  “If I were on any of these high-streets, I would’ve been hounded by cops, but in a mall nobody walks in. The problem with malls is that they close by 10 pm. All the stores switch off their lights by then. There are a whole lot of cars inside as people are also there to catch up on movies. If anyone who is passing by would want to stop by for dinner or drinks, they would only see that the mall is closed unless they are told that certain places are open till about midnight. So, that is a small problem. But in terms of timings, I think that is the best place to be in,” Thomas says.

He noticed that malls have a lot of hidden costs, which people do not realise while signing up as they do not go through all the piles of papers. Rentals are very high and water bought for ` 1 is sold at ` 5 in a mall, where there never is enough water. Arranging for tankers only adds up to the expenses.
Orange Tomato relies on social media and radio advertising. Mehta keeps track of the marketing expenditure and special offers. She has devised special offers like giving away coupons for Shitake along with movie tickets. “A certain amount for tickets that are bought can get coupons for Shitake. These are small offers that we have tailored. There are other offers where, if anyone who has visited Shitake and Twenty.21 goes to give a previous bill, will get a 10 percent off. You could even gift your bill to a friend and still get the 10 percent discount. We have a Monday Blues coupon, which can be redeemed on any Monday if you eat at any of the Shitake or Twenty.21 restaurants. So our strategies are thought out in a way as to make them very cost-effective.”

Events are also organised at the malls, where balloon sculptors give away cash vouchers to attract a family crowds. “A lot of our marketing is very different; it is not in terms of advertising and newspapers, which is something we would probably do at a later stage,” adds Mehta.

The Road Ahead
Shitake has so far received several inquiries for franchising in Hyderabad, something that Mehta is happy about. “We would be open to it. But the franchise would have to meet all our requirements in terms of space, their share in the deal, the kind of cuisine to be offered, and so on,” she remarks.

She also proposes that the staff would be trained by Orange Tomato and sent over to the new branch. This will help maintain consistency in the cuisines.

Speaking about his future plans and his take on the road ahead, Thomas says: “We would like to continue at the same pace as the economy is also on a slowdown. We would not like to take unnecessary risks. Mehta is the one who knows where to pull the reins. We are a little bit on the aggressive side but she’s grounded”.
As of now, Orange Tomato is looking at further expansion in Pune, Hyderabad and Chennai.