Indian Food, Foreign Palate

In 1951, Aajibai Banarase, an old, illiterate woman, set up an Indian eatery in the UK. Five decades later, Indian food chains have begun leveraging the success of small-timers such as Banarase in popularising Indian cuisine, by planning aggressive forays into foreign markets.
“Our motto for the year is ‘foreign focus’,” says Neeraj Jain, CEO, Pulse Foods in Delhi, which set up its first restaurant in London in 2006. It plans at least 46 restaurants worldwide by end-2007. Foreign ventures still have greater appeal although the chain expects a turnover of Rs 4 crore this year.
A large part of the success of Indian food chains is based on their ability to look beyond expatriate Indians and attract local clientele. Jain says 90 per cent of Pulse’s revenues come from foreign natives, hungry for a taste of India. In fact, Jain says Indian food has gone so mainstream that Pulse is even setting up outlets in local kiosks and food courts. “We are targeting a turnover of about Rs 20 crore in the first year of operations,” says Jain, who has two restaurants in Oman and will soon open Pulse’s first American eatery in Chicago.
The growing appetite for Indian “curry” will certainly attract entrepreneurs, says Rajesh Mishra, president, Federation of Hotel and Restaurant Association of India, in Delhi. “Some Nepali food chain selling Indian food in the US earns about $50,000 per month per restaurant,” he says. “This is a huge market. Clearly, the numbers are driving these chains.”
Indeed, new players, such as Mumbai-based restaurateur Sanjeev Kapoor, who opened 17 Khana Khazhana restaurants in New York, are growing. And there is room for more, as “increased competition will only help growth”, says P.R. Shiva Kumar, a partner with Saravana Bhavan, a Chennai-based food chain with 18 overseas eateries.
Of course, expanding abroad is not easy. Though the domestic food chain business is quite large at about Rs 30,000 crore, it is not sophisticated. Abroad, the food chain industry is as many as two to three times bigger than India’s, but entry barriers are also much hig-her. Jain says his company took three years to get its plans going because it lacked the supply chain and logistics needed to run a western-style food chain. To combat that, Jain tied up with British logistics firm, Norish, which will now manage the process through which frozen and semi-cooked foods from India are sent to a central warehouse in the UK before being taken to Pulse restaurants.
But the complexity and costs of carrying out such moves are well worth it. “The business is highly profitable,” says Shiva Kumar, whose company has 27 restaurants in India, but gets 40 per cent of its profits from its 18 overseas restaurants. Hence, a reverse trend seems to be developing. Previously, it was fast-food outlets such as McDonald’s, Domino’s, Starbucks and Barista that came to India and raised concerns, in some quarters, about the dollars they would repatriate. But now it is Indian food companies that are knocking on foreign doors and earning big bucks there; a nice example of globalisation working.