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Restaurant chain Barbeque Nation eyes international expansion

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Restaurant chain has added 64 restaurants to its kitty over the last four years, crossing the 100th milestone recently, with a launch at Dimapur in Nagaland. Post creating a successful enterprise in India, the foodservice brand began operations overseas in 2016, with the launch of three outlets in Dubai. It is now focusing on a few other countries in the region.

Barbeque Nation eyes expansion in international waters
Barbeque Nation’s format of offering an elaborate menu at fixed price has positioned it well to capitalize on both, the robust growth trend of the CDR segment in India and the broader chain restaurant market within the Indian food and services industry

In an interview with Indiaretailing Bureau, , CEO, Barbeque Nation said, “We are very excited about Dubai market and are looking forward to open more restaurants there. We are looking at Southeast Asia, we are in very advanced stages of talk to open restaurant in Sri Lanka, we are exploring Bangladesh, Nepal, we have a restaurant under-construction in Malaysia and then we are also looking at America.”

From the launch of first outlet in 2006, to the 100th this year, Barbeque Nation has come a long way in offering an unmatched dining experience to its guests.

, Managing Director, Barbeque Nation Hospitality Ltd, said, “We have contributed significantly to defining and shaping the casual dining experience in the country with our unique proposition of, DIY live on-the-table-grill and have served over 24 million patrons over the last fur years.”

Resonating the same thoughts, Bhasin said, “When we started our first restaurant in Bandra in 2006, we were the pioneers to start the grill on the table and the first restaurant had an overwhelming response and then we started moving on to the bigger cities and the response there was also very welcoming and at a stage when we reached the mark of 50 there was a question that how do we grow the brand from here because we have already been in bigger metropolitan cities and we were moving out into the emerging markets and that is when we thought of getting into smaller cities like in Tier II and III.”

To operate into smaller cities the brand introduced a different operating model.The 150-seater restaurants in metropolitan cities span across 4,500 – 6,000 sq.ft and costs the brand somewhere around Rs 2.5 crore whereas smaller city model covers 3,000-4,000 sq.ft and costs the brand around Rs 1.9 crore.

Barbeque Nation, which gets around 17 percent bookings from its own app, always keeps on innovating be it on the technology front or in the terms of offerings to enhance the consumer experience.

“We have introduced seven to eight counters – vegetarian live counter, non-vegetarian live counter, live jalebi counter, live soup counter, daal counter – here at the new outlet at Ambience Mall, Gurugram. The colour scheme is more vibrant,” revealed Bhasin.

With constant innovation and a penchant for experimentation, we are now charting the next phase of growth in the brand’s journey.

IPO On The Cards

Barbeque Nation Hospitality has received markets regulator Securities and Exchange Board of India’s (Sebi) approval to raise an estimated Rs 700 crore through initial public offering (IPO).

The company had filed its draft papers with Sebi in August last year and obtained observations from the regulator on 5 January 2018, the latest update with markets watchdog showed. Sebi ‘observations’ are very important for any company to launch public offer.

Barbeque Nation Hospitality’s IPO comprises fresh issue of shares worth Rs 200 crore and an offer for sale of up to 6,179,000 equity shares, according to the draft red herring prospectus (DRHP). The offer includes a reservation of up to 1.5 lakh equity shares for the company’s employees.

According to Bhasin, “Proceeds from the issue will be utilised towards setting-up of new Barbeque Nation restaurants in India, repayment of loans, and general corporate purposes.”

According to merchant banking people in the know, the company is expected to raise Rs 700 crore through the IPO.

Earlier, the regulator had kept the processing of the company’s proposed IPO in abeyance pending regulatory action for past violations. IIFL Holdings, Edelweiss Financial Services, Jefferies India and SBI Capital Markets are the book running lead managers to the issue.

Outperforming CDR Segment

Barbeque Nation has witnessed strong growth of over 29 percent YoY, over the last 4 years. The brand attributes its exceptional business performance to factors including, constant menu innovation, food festivals, operational efficiencies at the backend and tapping the potential of metro, Tier I and select Tier II and III cities.

Barbeque Nation’s format of offering an elaborate menu at fixed price has positioned it well to capitalize on both, the robust growth trend of the CDR segment in India and the broader chain restaurant market within the Indian food and services industry. The brand has successfully established itself as a popular choice, not just for family dinners, but also corporate lunches, owing to strategic locations of outlets, fine ambience and competitive pricing.

The CDR segment typically witnesses low proportion of its total revenues comprising of weekday sales, since weekends offer greater opportunities for leisure and family time. In contrast, weekday sales have consistently formed a relatively higher proportion of Barbeque Nation’s total revenues at about 49 percent over the last 3 years.

Also, lunch covers form a higher portion of the brand’s revenues at about 45 percent, which is unique to the segment. The higher weekday sales and relatively larger lunch covers is helping the brand increase utilization and have an efficient food waste management system. The restaurant attracts diners in groups with an average size between 4 and 5, leading to a relatively higher average bill size. The brand is also witnessing an increase in reservations through the ‘Barbeque Nation App’, which has so far been downloaded by over 7,80,000 people. In fiscal 2017, about 17 percent of total reservations were made through the BBQ App and 58 percent of the guests made advanced reservations.

Casual Dining Segment in India

The casual dining market in India is evolving constantly, in particular, Tier II cities are developing as growth hubs for eating out. Increasing experimentation and spending capacity of consumers from these regions are making them a lucrative destination for the segment. While mega metros have the highest presence of CDR outlets at 44 percent, mini-metros enjoy a share of 34 percent, the remainder being accounted for by Tier I and II cities.

The chain CDR segment grew at a CAGR of 19 percent between fiscal 2013 and 2017, furthermore, with social and digital media playing a key role in consumer engagement, it is slated to take centre stage in defining brands and their propositions in future.