Amazon founder Jeff Bezos made headlines in June 2016, when he announced the e-commerce giant would invest $3 billion into India, citing the region’s “huge potential.” That this came on the heels of the company’s 2014, $2 billion infusion, was big news. While Apple’s Tim Cook once said India is where China was “maybe seven to ten years ago,” Bezos sees something else: an entirely different market, one with a lot of untapped potential that’s growing at a rapid pace.
Bezos isn’t the only one to notice that India presents a significant opportunity. With so many changes taking place in both the industry and the region at large, restaurant chains that can utilize what has been learned and developed in the more competitive and mature foodservice industry of the Western world will find themselves at a considerable advantage.
More Indians are slowly warming up to the idea of eating in restaurants, and not just for special occasions. Thanks to growing wages, urbanization and technology’s influence on consumption habits, foodservice sales in this country of USD 1.3 billion are growing at about 10% annually (making it one of the fastest-growing in the world). This growth is double the rate expected for the much more mature U.S. restaurant industry, and with a population quadruple the size. All told, between 2013 and 2021, the Indian restaurant market is projected to double.
For private equity firms and global restaurant brands, India represents huge upside potential, especially as major Middle East markets, which are undergoing rapid growth now, approach saturation levels in the years to come. And as the competition in India heats up, home-grown Indian operators will need to raise their game if they want to stay in the race.
Many separate forces are at work in creating huge potential for restaurants in India. Its economy is among the fastest growing in the developing world; the International Monetary Fund projects the country’s annual GDP will increase by 7.4% through 2017 and 2018 — more than double the world average.
India is also one of the largest consumer markets globally, and one of the youngest with more than 45% of the population under 25 years old. For teens and young adults, eating out is a popular form of socializing, contributing to the growth of multiple segments within the expanding market.
Disposable income is on the rise; the educated middle class is growing; and as the country grows more industrialized and cements its reputation as an IT hub, per capita income stands to grow as well. According to data from the Economist Intelligence Unit, personal disposable income should grow about 10.5% annually through 2020.
India’s traditional close-knit extended families are less common; as younger family members move away for education and jobs, they are setting up smaller households, making dining out more attractive. More women are joining the workforce as well, especially in urban areas, leaving less time for home cooking and creating more demand for dining out/takeout options. We’ve seen similar spending trends in the U.S. though it’s worth noting that this will occur on an accelerated time frame in India (as Western systems have already been developed, they now only need to be implemented in other parts of the world, like India).
Mobile usage, satellite TV and greater access to the Internet is connecting more Indians with the world outside India and internally. Indians have very strong food traditions, and social media has offered another platform to compare notes on food trends and hot new restaurants.
Travel within and to India is on the rise. According to India’s Ministry of Tourism, in 2015 the country welcomed 8 million visitors, a figure that is expected to nearly double by 2025. This isn’t quite as high as other burgeoning parts of the globe (Dubai saw 14.2 million tourists in 2015), but significant nonetheless.
The government’s Make in India campaign, launched in 2015, is designed to create 100 million manufacturing jobs by 2022 through incentives for manufacturers. If it succeeds even partially, it could mean more discretionary income for more Indians.
DIVIDING A VERY LARGE PIE
In India, full-service restaurants command the largest market share, at 57% of sales. The next biggest category is QSR, at about 16%.
Considering the country’s giant patchwork of cultures and cuisines, it’s probably not surprising that about two-thirds of the restaurant units are loosely structured, small, independent eateries—referred to as “unorganized”—that often double as retail food stores. Only about two% of the total inventory of restaurants is branded—less than a tenth of what’s seen in other countries with a more established foodservice industry.
But that’s changing. As international, national, and regional players move into the market the momentum is shifting toward more chain-affiliated and standardized operations. A value-seeking mentality (to be expected, with median household income around USD 4,000 in 2015), marketing, greater mobility, and social media will all fuel more demand for QSRs.
Within fast food, chains are outperforming smaller operators in India. Chain-affiliated QSRs ring up higher sales per outlet than independents, with chain transactions averaging USD 2.29 vs. USD 0.90 at independents. Many home-grown operators will need to modernize and standardize their operations if they want to stay competitive as the market heats up.
More than 60 foreign restaurant brands operate in India. Indian-based brands include Natural, Dosa Plaza, Jumbo King and Cocoberry; major U.S. players include McDonald’s, KFC, Subway, Domino’s, Pizza Hut, Dunkin’ Donuts and Starbucks. Jubilant Foodworks, reportedly India’s largest and fastest growing foodservice operator, has more than 1,100 Domino’s in 260 cities and nearly 70 Dunkin’ stores.
Geographically, the prime opportunities are in the urban centers, where higher wages are attracting more Indians. By 2020, it’s estimated that 36% of India’s population will be urban dwellers, up from 32% currently.
MANY OPPORTUNITIES, BUT WITH CAVEATS
Mumbai via Vidur Malhotra/Flickr
In the World Bank’s 2017 Doing Business rankings – which compare the climate of emerging economies — India scored very low in a number of categories, from starting a business to construction permits, registering property, taxes, resolving insolvency and enforcing contracts. Not surprisingly, given that government bureaucracy is the norm, corruption has long been a characteristic of Indian society.
Despite that, private equity investors see the upside potential of this huge market (similarly, PE deals are already making their mark throughout the Middle East restaurant industry). Between 2011 and August 2016, they made some 80 deals totaling more than USD 640 million for Indian restaurant development.
International brands operating in the region are still learning the cultural and culinary nuances of doing business in India (many of which are similar to the challenges facing restaurant operators in the Middle East). McDonald’s, for example, reportedly adjusted 70% of its menu to include items like the Veg Maharaja Mac, a plant-based version of the popular Big Mac. Dunkin’ Donuts broadened its scope beyond the signature donuts and coffee to include sandwiches, and created more of an all-day menu—because Indians don’t eat donuts for breakfast. Nando’s, which opened its first three Indian franchise units, closing them two years later, returned in 2012, revising its QSR model to a larger footprint with table service and introducing vegetarian versions for 40% of its menu items. Customers of the original locations considered the price points more in line with FSR than QSR.
COMPETITIVENESS REQUIRES CREATIVITY
Labor is cheap in India, but the labor force is also largely unskilled, so automated processes and simple-to-prepare QSR-style menus can help ensure quality and a consistent product. Real estate is relatively expensive in India, and with an emerging economy that situation is only likely to escalate. So creative strategies, such as operating kitchens in lower-rent districts, are needed to stay competitive.
The tax code, which has been overly complicated, could be simplified this year with the planned implementation of a simplified national Goods and Services Tax (GST) that would replace individual state taxes. If that happens, it will streamline transportation and reduce some logistical costs of doing business. And the inadequate transportation infrastructure—and legendary traffic jams—can present interesting logistical challenges that require innovative solutions, especially if fresh food is involved.
Just because something works in one part of the world doesn’t necessarily bode well for success elsewhere. Regional operators who can face the above challenges head on, and address them appropriately — by utilizing an in-depth knowledge of the country’s unique challenges from those within or outside of the organization — will boost the odds of improving company performance. Overall, with the right approach and understanding of the market, the potential for return on investment in India remains huge.
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ABOUT AARON ALLEN & ASSOCIATES:
Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, commercial due diligence for emerging restaurant chains and prestigious private equity firms. Aaron has personally lead boots-on-the-ground assignments in 68 countries. Collectively, his clients around the globe generate over $100 billion annually and span six continents and more than 100 countries.
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Kitchen Organization in Full-Service Restaurants: Reducing Heat and Stress
in Cooking, Design, Restaurants, Uncategorized, Winter 2017
January 27th, 2017
By Peter Szende and Justin Cipriano
The restaurant industry is a dynamic ever changing business. The concepts change every day, the trends come and go but at the industries core it is about giving the guest an experience within each of the restaurants respected segmentation. Specifically, in how is an experience delivered to the guest. By breaking down the dynamics of a restaurant to front of house (FOH) versus back of house (BOH) we can isolate aspects that cater to delivering an experience to the guest. The FOH is everything the guest sees and interacts within the guest experience. Industry observers comprehensibly concentrating on front of house management issues, service delivery analyses largely disregard back-of-the house challenges.
The real brain to any restaurant operation and the organization of the kitchen. How the kitchen is organized directly correlates to how the guest receives an experience. The organization of a kitchen is critical in how the food is prepared; which relies on which segment a full-service restaurant concept falls roughly in casual, upscale and fine dining. Each segment offers unique insight in how the kitchen organization reiterating that this is one of the most important factors in delivering the service expected within the segments. Understanding the fundamentals of kitchen design is a complex endeavor. Therefore we decided to investigate and answer a few simple questions. What’s happening when a ticket arrives to the kitchen? How kitchen work is orchestrate and flow is managed? To fully grasp the importance and scope of kitchen design concepts we interviewed restaurant designers and experienced chefs in Boston.
The Kitchen Designer’s Perspective
Our investigation started at TriMark United East; that is the largest distributor in the Northeast offering commercial kitchen equipment and supplies to local restaurants and national chains.
According to kitchen designers when restaurateur shows up with the menu and advice on any standard list of equipment. Regardless of their segment from a design standpoint, every restaurant has a prep area, a dish room, dry storage, walk-in cooler or reach-in coolers, and potentially a walk-in freezer. In addition, a main cooking line, a chef’s line. At the same time every restaurant concept is different and has different style of configuration. A classic diner has a very basic structure; you are cooking off griddles often without any pans. Whereas in a fine dining establishment you may use a utility distribution system which gives a lot of flexibility to facilitate menu changes. This system allows chefs to take pieces of equipment out that hinders productivity and exchange it for a more practical modular and flexible pieces.
Fundamentally, they would need to understand the flow of the back of the house. Restaurant designers need to know where the receiving door, where all the products coming in, and where is the front door etc. Designers use many tools to coordinate the kitchen organization and negative space. A common tool used is the bubble diagram. This diagram conveys conceptual information about building spaces, their functionality, relationships and flow patterns.
Kitchen design – costing guidelines
- Basic Kitchen Equipment for 100 seats fast food restaurant ranges between $135,000-$150,000.
- Basic Kitchen Equipment for 150 seats full service restaurant ranges between $185,000 – $225,000.
Many other exploratory questions are considered such as; is the restaurant open for lunch and dinner? If the restaurant is only open for dinner, the entire kitchen can be used as a preparation area. Other considerations include is there a private dining space or event space? A large private dining area cannot be executed of the traditional line while serving the dining room. However with proper planning small scale events up to 12-14 people can be served off the line. Proper kitchen design helps management to keep labor within budgetary guidelines.
Trends in technology allow designers to make decisions based on food service safety requirement and offer process solutions that lends efficiency to the system.
Boston Area Kitchen with Great Design – The Designers’ Pick
According to TriMark United East experts there are many great kitchens in Boston. The best ones are probably hotel kitchens, such as the Henrietta’s table at the Charles Hotel in Cambridge. No other restaurant is able to serve breakfast faster than them and the quality is outstanding.
Kitchen flow patterns
Our interviewees differentiated between two basic types of food flow patterns.
Typically used by high volume operations. The items are prepared and finished by the line cooks, then are handed over to the expediter. All cooking lines flow centrally through to the expediter. The expediter will check the finished product and the food will go out for service.
It is a slower way of production used typically in fine dining establishments. Different parts of the dish are distributed among the line chefs and prepared separately. Then each of the components of the dish are assembled and finished by expediter.
History of the European Line
In the late 19th century, a renowned French chef Escoffier understood the value in creating a kitchen that moved efficiently and with military like precision. He effectively created a brand new kitchen system called the French Brigade. Below is the classic French break down of the brigade system.
Diagram 1. Key Culinary Positions in a Traditional French Brigade
|MANAGEMENT||Chef exécutif||Executive chef. Responsible for all kitchen/culinary operations.|
|Chef de cuisine||Runs the kitchen of a restaurant.|
|Sous chef(s)||Chef(s) second in command|
|COORDINATION BETWEEN THE KITCHEN AND THE DINING ROOM||Aboyeur||Announcer or expediter. Accepts orders from the dining room and relays them to the various station chefs. Checks each plate before it leaves the kitchen.|
|EXECUTION||Chefs de partie||Station Chefs (number of stations vary)|
|Saucier||Sauté and sauce station chef.|
|Rôtisseur||Roast station chef. Responsible for roasted and braised items. An additional ‘grillardin’ may be assigned for grilled and broiled items only.|
|Poissonier||Fish station chef. Responsible for all fish and shellfish items.|
|Entremétier||Hot vegetable chef (hot appetizers, vegetables dishes and often soups.) An additional ‘potager’ (soup cook) may be assigned to prepare stocks and soups only.|
|Garde manger||Pantry chef (Responsible for cold pantry items. The pantry chef may also oversee the ‘boucher,’ (butcher) who is responsible for meat, fish and fish fabrication.|
|Tournant||Relief cook. Fills in at any position where she or he is needed.|
The diagram above shows how Escoffier designed his kitchens traditionally. We’ll see the application of his method in a few present-day restaurants.
The Suite Style Kitchen
Kitchen designers pointed out that many chefs trend towards the Suite Style Kitchen. The kitchen includes all the components of a traditional European line ergonomically centralized equipment layout.
Who is orchestrating the kitchen?
To achieve maximum kitchen efficiency an internal decision on how to manage the process flow has to be made. Experts typically encounter three basic solutions. The chef may holds the tickets as they are coming in and calls out menu items to the line cooks and there no tickets in front of the cooks. The Chef is orchestrating everything. Another alternative is when the line cooks receives the tickets and the chef/expediter calls out the table numbers and cooks have to organize themselves. Many streamlined operations now use a no expediter, were line cooks entirely rely on ordering information from the point of sale system.
We had a chance to discuss with chefs running different types of operations; none of which was using an American Line.
The Chef’s Perspective
We had a chance to discuss with chefs running different types of operations; none of which was using an American Line.
Champions Sports Bar, Boston, MA
Restaurant Segment: Casual Dining
Within the many options of the restaurant industry the most popular segment is casual. These restaurants are serving simple fare and the key focus is achieving high volume. The menu has few customizable options which allows the restaurant to turn orders quickly and efficiently. The Champion’s sports bar located at the Marriott Copley Place in Boston is serving hundreds of people on regular day, due to its location in a strip mall and in the heart of the city. Champions really does well during specialty sport nights such as the super bowl where it may serve thousands of covers. Champions uses a modified European Line The back line has everything that will needed for hot preparations, for example ranges, salamanders/broilers and other equipment. Parallel to the hot area another line is designated for preparation and assembly of cold items. The operation is orchestrated by the chef on duty, however the tickets are rung in by the service staff and are printed directly at each cooking station. Food is prepared, dropped on an island pass and checked by the chef before it goes out to the dining room. The island pass is located in the back of house between the kitchen and the service stations.
Champions – The second line is designated for preparation and assembly of cold items.
Brasserie Jo, Boston, MA
Restaurant Segment: Upscale Casual
According to the executive chef; Brasserie Joe’s is an upscale casual restaurant serving French cuisine in a traditional Brasserie setting. Similarly to Champion’s, the European line is adjusted to their upscale casual concept. In a 199 seat restaurant, busy Saturday night can be hectic. When the tickets comes in the Chef on duty will call out verbal instructions to the line chefs and effectively pacing food production and service.
Upon our visit we overheard the chef expediting orders as follows “Picking-up two Brasserie Steaks, Duck Confit, Roast Salmon.” It is also up to the line chefs to communicate amongst each other. Based on the tables menu choices, the person who is e.g. in charge of cooking a salmon knows it takes only a minute to get the dish ready, and coordinates the times for synchronized service.
Food is prepared at different stations such as Grill (all grilled items and duck confit) and Sauté (For example: Chicken, short ribs, fish). Prepared food is then dropped on an island pass and checked by the chef before it goes out to the dining room.
Brasserie Joe – The island pass is located in the middle of the kitchen (Hidden by pole).
Le Grand Véfour – Paris, France
Restaurant Segment: Fine Dining
Le Grand Véfour is a legendary Michelin starred restaurant in France, which uses the traditional European Line. The entire French Brigade is working as a team to create and produce a dish. This means that one person will most work on one aspect of the dish and not the dish in its entirety. An advantage is that the stations chefs are experts within their own area. The contrasting disadvantage is that the chef working on the parts is unable to see the product finished and understand how the components of the dish work together to create a dish. The executive chef acts as a real “Maestro of the orchestra”.
Le Grand Véfour – Stations (above) are designed to produce towards the pass (Photo credit: Peter Ungár)
Le Grand Véfour – The ‘Maestro’ stands behind the pass (Photo credit: Peter Ungár)
Tasting Counter, Somerville, MA
Restaurant Segment: Fine Dining
Tasting Counter offers a multi-sensory dining experience. The concept is to bring the guests as close to the origin of the food items as possible. This is accomplished by the sourcing and the preparation. Tasting Counter distinguishes itself by the reservation system. Guest purchase a ticket that entitles them to experience a surprise tasting menu. At dinner service guests may arrive in two seatings. Although guest arrivals and departures are slightly staggered, the bulk of the courses are presented simultaneously. Instead of traditional station assignments chef’s responsibilities are broken down into specific tasks during the service time. E.g. Mise-en-place, cooking, finishing, service and guest interactions.
Tasting Counter – Guests experience the tasting menu in a communal setting (Photo credit: Peter Ungár)
Tasting Counter – The kitchen is not organized by stations but rather around specific tasks (Photo credit: Peter Ungár)
Dr. Peter Szende has over 25 years of management experience in the hospitality industry in both Europe and North America. He joined the Boston University School of Hospitality Administration as an Assistant Professor in 2003. He was promoted to Associate Professor of the Practice in 2010. Currently, he serves as Associate Dean of Academic Affairs.
Justin Cipriano is a junior at Boston University School of Hospitality Administration. His studies and areas of interest include real estate finance and development as well food and beverage management.
The authors of this article would like to acknowledge the following colleagues for their support and assistance in this project:
Joe Thibert-President, Brandon Child, Alan J. Goldberg, Marc Thoener (TriMark United East)
Liz Perez – Executive Sous Chef (Boston Marriott Copley Place )
Nicholas Calias – Executive Chef/Director of F&B Operations (The Colonnade Hotel & Brasserie Jo)
Peter Ungár – Chef/Owner (Tasting Counter)
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