In a candid conversation with Food Service India magazine, CEO Anuvrat Pabrai and partners Kunal Pabrai and Nishant Pabrai of Pabrai’s Fresh & Naturelle Ice Creams express their views on how the east India market is responding to the positive strides, and how young foodpreneurs are cashing in on the opportunities by innovation and right strategies…
Which are the positive upsides to the foodservice market of East India? In your assessment, how has it evolved over the years in terms of growth and business opportunities?
Anuvrat Pabrai: The east India market has been a late starter in terms of the food service industry, despite the huge demand. I feel that the market has stupendous potential waiting to be addressed. Infact, there is ample scope for food entrepreneurs to cash in on the opportunity. Therefore, it is not surprising that multiple startups have blossomed in the city trying to carve out a niche for themselves. Some of them like Wow Momos & Pabrai’s Fresh & Naturelle Ice creams have expanded their reach across the nation; while others like Chai Break & Paris Café continue to draw an increasing army of fans by constantly innovating their products.
What is the sphere and scope of your foodservice operations and activities in East India? Which specific sector/segment of the foodservice market you cater to?
Kunal Pabrai: At present there are 11 Pabrai’s retail units in both standalone parlours and kiosk formats with eight in Kolkata , two in Siliguri and one in Bhubaneswar. In each of the cities, in addition to addressing the retail demand for premium ice creams, we also address the demand curve of top hotels, restaurants and caterers.
Which food retail formats do you occupy? How organised is this format of business and how much of this business format is in the organised market? Which are the factors that will encourage more players to embrace the organised market?
Nishant Pabrai: Currently, we have three retail formats: mini counter format, which is a shop in shop format of approx. 24-36 sq ft. Kiosk format, which we operate in malls and food courts of approx. 64-100 sq ft and parlour format which are standalone stores of 250-400 sq ft. Besides, each format has its own positives and negatives and comes with its own set of challenges and opportunities. All our mini counters and kiosks are part of food courts, hyper marts or malls.
Parlour formats are located on high streets and operate in standalone format. All formats are in organised sector and have to operate within the ambit of licensing and govt regulations. I feel that a more proactive approach by the government in educating new start-ups, providing training in various aspects like cleanliness, hygiene, personal grooming, and financial and accounting practices for successfully managing a start-up; all these can help in greater transformation of the sector.
Give us a brief description of your evolution and growth over the years?
Kunal Pabrai: We started off with a single parlour in Kolkata in 2008. Our first franchised unit was started in 2010. Since then we have grown to 25 outlets in 10 cities in India. We are available in Delhi, Ahmedabad, Bangalore, Chennai, Hyderabad, Mysore, Coimbatore, Siliguri, Bhubaneswar and Kolkata. Besides, we have another seven outlets in the pipeline and we hope to close this in financial year with 32 plus units across India. Our CAGR has been 50 per cent plus over a period of eight years, but we hope to settle to a more realistic 30-35 per cent CAGR in the next three to four years.
What is the business potential and opportunity for your format type?
Nishant Pabrai: At Pabrai’s we offer gourmet, premium, and natural ice creams, I feel we have immense potential and demand for our product and keeping this is mind we are expanding our reach across the country through the franchise route. It enables us to partner with like-minded individuals to be part of this growth opportunity. What sets us apart is our single minded pursuit of providing the best quality product. We feel new entrants to food business should focus on benchmarking themselves with the best in terms of quality of food and service.
Have you tried out any interesting/innovative concept for your format?
Anuvrat Pabrai: One of our most talked about innovations is creating cuisine specific ice cream flavours. This is mainly targeted towards the hotels and restaurants. So far we have created cuisine specific ice creams for Indian, Chinese, Italian, Japanese, Bengali, Thai and Vietnamese cuisines. Some of the flavours made by us have never been tried before and our customers have given us a very good response. I feel our growth and marketing is driven by our customers’ ‘word of mouth’. Our customers are loyal, and act as our brand ambassadors by praising our brand and our products to their friends, relatives and others. This cycle keeps on moving has been the reason for our growth and our strong connection with our customers.
Which are the latest consumption trends and developments influencing your business format and how are you positioned to make the best use of the opportunity?
Kunal Pabrai: Customised gift packing is the new trend – wherein attractive and customised gift packing is created for giving with marriage cards. Also our products are perfect gifting options for family and friends – both within the city and to other cities. Home delivery is a major part of our business, as normally no ice cream company delivers ice creams in a short span of time.
We have been working hard to cater to the needs of our by delivering their favourite flavour at their doorsteps. We are actively working on strengthening our home delivery platform and long distance packaging systems.
What is the input cost of your business? Which parts of your business operations incur the highest cost/expense and what are you doing to enhance business efficiency?
Nishant Pabrai: For setting up a unit parlour operation, approximately Rs.12-15 Lakh is required. Apart from the above, repetitive monthly expenses are predominantly rental, salaries, electricity and inventory. To enhance business operations, one of the key innovations is the personal training given by us to each new franchisee at the time of starting new counter. This is usually followed up by a revision training a month or so later. This helps ensure that franchisees have completely understood and are following the basic tenets of the franchise system. Apart from this regular refresher training is given at least two to three times a year to ensure franchisees keep adhering to our standards and SOP’s.
Tell us about the challenges of your business?
Anuvrat Pabrai: The biggest challenge we are facing is having franchisees follow our systems and standard operating processes. A lot of time and energy is spent on reinforcing the basics and pushing franchisees to keep relentless focus on the KPIs. In 90 percent cases we have seen that lack of understanding and implementation of Franchisors Standard operating process often lead to failure. Although there are various reasons for failure, but following the advice of the franchisor is a key to a successful chain.
One major challenge is the up-grading of new systems, designs and initiatives across the franchise chain. This can be a challenging area and needs operational clarity between franchisor and franchisee on how new developments will be handled, implemented and most importantly financed. We firmly believe that a great system, a great product and great service will always ensure brand loyalty and future growth.
What has been the impact of the entry and rise of global multinational foodservice chains in East India?
Kunal Pabrai: It is a matter of great pride when our customers rate us among the best in the world in terms of our product and taste. For us at Pabrai’s, the rise and presence of global food chains has only sought to help and inspire us to be greater and better. International gourmet food chains also help educate customers about the unique tastes and flavours of different regions. This helps us indirectly as international chains bring in newer tastes, newer flavours, newer experiences. It helps when a home grown ice cream chain is seen to already have those flavours in their repertoire.