Growth and Expansion of Ethnic restaurants: Insights from India


Published on

Ethnic restaurants across the world help save tradition and heritage of a geography or a community by serving authentic high quality food related to the same. In this paper we present the growth and expansion strategies of some Indian ethnic restaurants to understand their challenges, how they grew, what branding strategies did they adopt and market expansion strategies.

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Growth and Expansion of Ethnic restaurants: Insights from India

  1. 1. Browne & MohanGrowth & Expansions strategies of Ethnic Restaurants: Insights from India All photographs used in the presentation are owned by their respective copyright holders. © Browne & Mohan, 2013, Limited use
  2. 2. Ethnic Restaurant What do Anjappar Restaurants, Sree Anna Poorna, Haldiram, Murugan Idli shop, Coconut Groove, Saravana Bhavan have in common. They are fine examples of ethnic food restaurants serving cuisine and experience typical to a geographic region or a community. Ethnic restaurants, include QSR like Karim Hotel in New Delhi that has been dishing out popular mughalai dishes for over 120 years or Halli Thindi serve authentic grandma’s Karnataka vegetarian dishes to the cosmopolitan Bangalorean. Ethnic restaurants also come in fine dine format. Gajalee serves non-vegetarian Malvani food to the voracious Mumbaikar, or Vishalla at Ahmedabad that has perfectly blended the rustic settings of rural Gujarat village with buds tickling Kathiawadi and other ethnic exotica. © Browne & Mohan, 2013 Limited use only
  3. 3. Ethnic Restaurant Markets According to National Restaurant Association of India (NRAI) estimates the market size of restaurants is approximately $8.2 Billion. Ethnic restaurants, include QSR and fine dining options. Ethnic restuarants like Halli Thindi serve authentic grandma’s Karnataka vegetarian dishes to Bangalorean or Gajalee serving non-vegetarian Malvani food to the voracious Mumbaikar, with a market size of $0.83 Billion are growing at 6% YoY. What is unique about them?. First, they can be built for any size. An ethnic Oggarini-Meneshinakai (an ethnic combo of Northern Karnataka with an estimated market size of 13.2 Million) can be started with as low as $15,000 in Bangalore, and break even within 2 months. Other formats may require investments between $25,000 to $50,000 for an independent restaurant. They have lowest exit rates amongst all other restaurants opened in the region (6% in high streets and 11% in dense residential areas, while the average is 18% in high streets and 21% in residential areas for other formats) Prior experience, and affinity with the cuisine acts as a market pull. © Browne & Mohan, 2013 Limited use only
  4. 4. Factors underlying their Growth30% 25%25%20% 15% 14%15% 13% 12% 11% 10%10%5%0% © Browne & Mohan, 2013 Limited use only
  5. 5. Factors underlying their Growth Contd…1. Keeping simple dish, do not complicate the look and feel. Controlling for variety helps in managing costs better and albeit increases the focus of the restaurant.2. Keep menu easy to understand. Let customers enjoy the quick glance and decide what to order.3. While being ethnic in product is important, overdoing the “Culture” in décor is a big NO. Do not go overboard with the accessories either. Keep the functional aspect in mind while choosing the décor and cutleries.4. Bond with the ethnic community and use the communities to spread the +WOM about the restaurant.5. Use every opportunity to be branded. Haldiram brings out special menu for Chauth, Narathra’s etc.6. Expanding into related areas like outdoor catering is important to connect with new customers and expand revenue stream.7. Contributions to community are important to reinforce the sense of belonging. © Browne & Mohan, 2013 Limited use only
  6. 6. Major influencers in selection of ethnic restaurant 35% 32% 30% 29% 26% 25% 20% 15% 13% 10% 5% 0% Bachelors Married Men Married women Children Bachelors are majors influencers of a particular ethnic restaurant followed by married women. While there is no significant difference in selection for break fast and lunch, married women are likely to influence 3 times more than men in the selection of the restaurant. © Browne & Mohan, 2013 Limited use only
  7. 7. Major sources of information about ethnic restaurant 25% 22% 20% 15% 15% 14% 14% 13% 12% 10% 10% 5% 0% Reviews newspaper Online sites Radio Family & Office social articles friends media Family and friends are the major sources of information, followed by office, Radio and social media. © Browne & Mohan, 2013 Limited use only
  8. 8. Major themes that appeal in branding 20% 18% 18% 17% 16% 15% 14% 14% 13% 12% 12% 11% 10% 8% 6% 4% 2% 0% The most popular themes that appeal in branding of ethnic restaurants is tradition. Anjappar built it cult branding by reinforcing the traditional Chettinadu culture. Annapporna has built its reputation as the place to have lunch at Coimbatore by serving “traditional sadhya with 37 dishes for an affordable cost. © Browne & Mohan, 2013 Limited use only
  9. 9. Major challenges Ethnic restaurants face.. 40% 35% 35% 30% 29% 25% 20% 16% 15% 11% 9% 10% 5% 0% Government Labor attrition Family dynamics Competition Others permissions Government permissions and regulations are cumbersome. Many a times, even after permission from the appropriate authorities, many a successful restaurants had to close down or move to newer establishments due to frivolous complaints. Labor is a major problem for restaurants of all sizes. With MGNREGA and other acts guaranteeing wages, the availability of rural workforce which is the backbone of the industry has become limited. Unscrupulous practices of labor agents who take advances for the labor services and scoot later with the team is posing a major issue for ethnic restaurants Family dynamics including founders death, division also affects the continuity of the business. © Browne & Mohan, 2013 Limited use only
  10. 10. Expansion strategies of Ethnic restaurantsExpansion of ethnic restaurants happened with “home-base” and spreading closely around it inmultiple phases as presented below.1. All ethnic restaurants start with exploring newer locations within their base city. This expansion helps them to understand how to standardize, make decisions about centralized cooking and serving and rudimentary branding efforts.2. Armed with expansion experience within a city, Ethnic restaurants explore the near by cities with similar diaspora. For examples, for most Chennai and Coimbatore based restaurants the first city to explore is Bangalore because of high number of tamilains in the city.3. Chains explore the pan-national expansion, mostly through franchises to expand into cities like Delhi and Mumbai.4. International expansion happens through branches, JV and franchises. Their geographic market selection indicates choosing markets where people like to learn about international cuisine and large presence of close related diaspora.5. Ethnic vegetarian restaurants choose Middle East, Canada, U S, Malaysian Cities and Singapore based on number of Indian, Sri Lankan, and Malaysian households.6. Ethnic non-vegetarian restaurants chose the markets based on India, Pakistan, Afghan populations. © Browne & Mohan, 2013 Limited use only
  11. 11. Thank YouFor any queries, please contact :Srinivas Sawkar157/A, II floor, 10th A MainJayanagar, 1st BlockBangalore. 560011PH: 91-80-2656 5164, © Browne & Mohan, 2013 Limited use only 57