We have no organised player to distribute perishables: Director healthy QSR chain,...

We have no organised player to distribute perishables: Director healthy QSR chain, Paninaro

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Director of Aspher Food Private Ltd, Aditya Parikh, talks to FoodService India magazine about how the Indian food service industry is witnessing a shift in consumer preferences from junk food to healthy snacking and how Paninaro, his healthy food QSR chain, has captured the taste-buds of Mumbaikars.

We have no organised player to distribute perishables
According to Aditya Parikh, the younger generation is already extremely conscious about their diet and it’s only a matter of time before healthy QSR segment starts rivaling current mainstream categories

Tell us about your brand’s progress in the first year of your operation in India. How many outlets have you been able to add in this period and how many more do you plan to add in the near future?

Paninaro was originally conceptualised as a chain of food trucks which would be at one location for lunch and another for dinner. We launched our first food truck at Peninsula Corporate Park, Lower Parel in October 2010. Within six months, we realised there were too many barriers and downsides and started our first brick-and-mortar store, also at Peninsula Corporate Park. Since then we’ve grown to 11 outlets and are looking to grow to 20 to 25 within the city before expanding to Pune.

Some the leading foreign QSR brands have been witnessing slowing same-store sales growth over the past few quarters. What opportunities do you see?

While the QSR segment and the larger food industry are definitely facing headwinds and going through a tough period with rapidly rising costs and stickiness in pricing, I’m pretty optimistic about the future. With an increasing number of households opting to eat out or order, the opportunity for QSRs is tremendous. As with every industry, there is some degree of cyclicality to the foodservice industry but these challenges have to be taken in stride.

Is it right to say that the food service business is not affected by the turns and tides of the economy as people will need to eat even in times of an economic slowdown?

As I said, every industry has some degree of cyclicality, some more than others and the food industry is no different. Sure, people always need to eat but they are going to cut down on eating out if they find it more economical to eat at home and money is the decision making factor. How do you assess the market potential for the healthy food category in India.

How do you see it performing in the context of the growing fad for pizza and other fast foods. For QSRs, which new trends and influences will shape the growth of this category going ahead?

I obviously have a biased view on the healthy QSR segment as we have heavily invested in it! We’ve been growing at a compounded annual growth rate of 27 per cent over the last four years so it’s safe to say I am quite bullish on it versus other categories. The younger generation is already extremely conscious about their diet and exercise and it’s only a matter of time for the healthy QSR segment to rival current mainstream categories.

Tell us about your menu offerings.

Our menu offers a mix vegetarian and non-vegetarian options, both of which are quite sought after. International QSR chains operating in India usually have third party vendors from where they source the ingredients.

How do you ensure that the vendors meet the quality parameters and benchmarks?

This is probably one of the most difficult aspects of the food industry in India – suppliers’ cold chain management. With perhaps one or two exceptions, we have virtually no organised players who distribute perishable products. Procuring ingredients from third party vendors just shifts the burden away from the company. But without the necessary infrastructure, the quality of ingredients is still the same! We have partially skirted the issue by procuring our perishables directly from the farms. But as we grow, we will also need to make significant investments in infrastructure to ensure better cold chain management.

How much of online sales are you doing currently and how do you see this segment growing for you?

We currently get about 5 per cent of our sales through our website and online portals but are looking to grow this to about 15-20 per cent . Since our business model is quite different, we expect subscriptions to be the primary growth driver.

In terms of your investment and expansion plans, what are your short-term and long-term goals for the Indian market?

Our philosophy is to grow in concentric circles so that economies of scale can be fully exploited. After reaching our target of 20-25 outlets in Mumbai, we’re looking to expand to Pune and Bangalore thereafter. Beyond that, your guess is as good as mine!