With health on every consumer’s mind, the all-veg, fat-free gelato is giving the traditional ice-cream a run for its money. Akshay Batra, COO, Gelato Vinto, reveals the secret recipe of the brand’s success, and shares the company’s country-wide expansion agenda through franchise, and their aggressive plans on the institutional front this fiscal, with Tripti Bisht.
When and how did the journey of Gelato Vinto begin?
A frequent traveller to Italy and a gourmand, Vijay Arora, Managing Director, Gelato Vinto India, gave Delhi its first superior taste of frozen dessert in the form of gelato (derived from the Latin word gelatus, meaning frozen) with the opening of his first gelateria or gelato parlour at M Block Market, GK, New Delhi, in 2005. Italian technicians and machinery were especially flown down to India. To begin with, 96 flavours were offered at the outlet.
Started with a seed capital of Rs 3 to Rs 4 crore, the concept did very well in the first year but became stagnant for the next two years. In 2007, the company opened a trial outlet in Delhi’s MGF Metropolitan mall for a week to check if the concept would succeed in malls. About 50,000 to 1 lakh customers per day were attended to during the week, establishing the fact that malls and not high streets were the future of the business. Subsequently, an outlet was opened on the ground floor of Select CityWalk. In 2010, we ventured into franchising, and almost doubled our presence by stepping out of Delhi-NCR to explore new states such as Punjab and UP. Since 2010, the store count has quadrupled.
Please tell us about your various store formats.
For a flagship store, the area should be at least 140 sqft. A shop-in-shop requires only a display cabinet so it can be as small as 24 to 25 sqft. Store size also depends on the mall. For an ideal kiosk, 50 sqft is the right size with a 10-ft frontage. Also, ground floor stores always do better than those in food court. Around 65 percent of our stores are on the ground floor. The product mix varies with the location and the profile of its visitors. The sales team at each store knows best which products are moving fast, so as per their experience and demand forecast they place a 24-hour advance order for the gelato bins at our centralised kitchen. For outstation stores, we supply once in 15 or 20 days, so the orders are a huge 200 kg at least.
How do you come up with new flavours?
All our products are vegetarian. We do a lot of R&D, samplings and trials before launching a new product at our top stores by positioning them as the ‘Flavour of the Week’. If the response is overwhelming, we convert them into a permanent flavour. Chocolate Fudge Cake and Fudge Scotch Caramel Cake have emerged as our top sellers. We created a dessert first, and then a gelato of the same taste followed. Flavours that are not popular are taken off the shelf. Customer feedback and suggestions also lead to creation of new flavours. Most of the flavours are common across outlets; only four to six keep changing. We also offer customised flavours such as Kulfi Gelato and Saffron Pista Gelato; and special flavours keeping in mind regional preferences, for instance, we created Paan Gelato for Kanpur in UP; Rose flavour for MP; Mango Swirl and Mango Bite for Maharashtra; and dry fruit-based flavours such as hazel nut crunch and almond for Punjab.
What is your pricing strategy?
A particular flavour’s price will depend upon its ingredients and their cost. Mangoes come from Ratnagiri in Mumbai or from INA market. Our garnishing sauce is sourced from Italy. We also buy top quality fruits from Azadpur. The price range falls between Rs 49 (80ml) and Rs 176 (160ml). Prices are pretty similar even for customised flavours. We sell by the kilogram, while industrial ice-cream is sold by the gallon. Our cost of production is very high as compared to industrial products as we do not use artificial colours or preservatives. Once we explain the reason behind our pricing (which customers see as somewhat high), they are satisfied.
What are the main challenges in this business?
Having the best of location is a key challenge. Staff and quality management are other crucial aspects. Our production team comprises of about 30-35 employees including the helpers. At our regional office, we have about 8-10 people.
We conduct random checks for quality every morning, and surprise visits to the stores on a weekly basis to check on the hygiene, for which we have a full-time quality team in place. We have applied for FSSI certification, and have food safety and management systems in place, which are monitored through quality audit sheets. We also have quality mechanisms in place where we send our products to authorised labs for microbiological and nutritional value checks.
Other concerns are wastage, and the product’s short shelf-life. We sell 20,000 to 30,000 kg of gelato in a month so about 800-900 kg is produced per day. The biggest difference between industrial ice-cream and gelato is that the latter has a very short shelf-life. Wastage comes from products that are not fast moving and consumed by only a niche market. Our monthly wastage figure is 2-3 percent, but considering the nature of the business, we are prepared for it.
What are your future plans?
Our main focus will be on franchises so that we can concentrate on production. The franchisee investment could vary between Rs 6 to Rs 14 lakh depending on the location and use of Italian (Rs 4.5 to Rs 5 lakh) or Indian cabinets (Rs 40,000).