The lockdown was harsher for a few businesses than others. For restaurateurs in the country, the situation was grave, thanks to high rentals and no cash flow. But some people persisted and survived. Impresario Entertainment and Hospitality Pvt. Ltd (IEHPL), one of India’s top five Food & Beverage companies, which owns and manages 57 restaurants in 16 cities across India, was one of them.
During the lockdown, the company launched its own home delivery services and online payment platform. On November 20, it opened Thane SOCIAL, an outlet designed keeping in mind social distancing and new hygiene and safety measures.Moreover, they have managed to get to 60 per cent revenues of pre-Covid times.
Riyaaz Amlani, CEO and MD of Impresario tells Forbes India how he and his team turned the tide.
Why did you open a new SOCIAL in the pandemic?
We had already started work on four SOCIAL outlets before the pandemic hit us. But the launches were delayed because of the lockdown. Also, we got busy fighting the financial crisis at hand. When consumer sentiment was back, we focused on home deliveries and in early October we restarted work on these projects.
For the new Thane outlet, we wanted a creative solution, which made people feel safe yet not compromise on the ‘restaurant’ experience. We wanted them to not think of the virus while they are there. After all, you are going to ‘hospitality’ and not a hospital. And because the outlet was in the fit-out stage, we had the ability to design it accordingly.
We created little cubicles and rooms where diners can dine-in yet see people around. Be social yet responsible.
Why did you launch your home delivery and online payment platform?
We wanted to build a relationship with our customers directly. That’s what hotels do. It’s all about people. With aggregators, we don’t know who our products are being delivered to. We have no control over end-to-end operations -- from the kitchen to the customer’s house. Hence, we built our platform.
I believe that in the future we will be able to shift the customer behaviour of ordering from aggregators to directly from our websites. Technology must facilitate human interaction rather than restrict it.
Our margins are better when people order from our platforms. There are no hefty commissions. Also, AOV (average order values) through our direct channels are 60 percent higher than through our aggregators.
I feel when you have a direct relationship with a customer, he or she feels safer. It’s a trust-based transaction, where there is no disappointment. With an aggregator, the tendency is to drive transaction at the cost of AOV. An aggregator is always luring you to order with discounts and schemes and customers come looking for discounts.
In the pandemic, what has really changed is that customers are not going for deals but disappointment-prevention orders. Safety and trust are the biggest factors. We understand that aggregators must create habit-forming activities, but we believe that that is a zero-sum game as neither the restaurant, aggregator or delivery boy ends up getting anything.
How would you evaluate your business in 2020?
The year 2020 was a watershed moment for restaurants in India. We almost perished and the F&B industry almost collapsed. We faced tremendous hardships. We were tested on finances, reason of our existence and our character. But we got together and have come out stronger and wiser from the crisis.
There were some fault lines in the business, which we have corrected. We have adopted technology and understood how it can enhance customers’ experience. The rental v/s sales issue has improved. For the longest time, we were paying first-world rentals in developing nation’s purchasing power. Those have been repaired.The year 2020 has been trial by fire, but we believe we have come out stronger.
What were your biggest challenges and achievements in 2020?
The biggest challenge was limited cash flow. We needed to preserve the value we had created over the years and manage that with the cash flow challenge and protect the most vulnerable, both staff and suppliers. What helped us is honesty, transparency and clear communication.
We were able to communicate with our people what the challenges were and everyone chipped in and everybody bore some pain. People took salary cuts, so we didn’t have to fire too many people. Suppliers extended credit lines and hearts and so did landlords.
When will the F&B business in India be back to pre-Covid days?
I would be very cautious to guess. Nevertheless, things are looking positive as consumer sentiment is back. People are coming out and they are feeling safe. The confidence in dining out is back. We have been seeing tremendous growth month on month. We are 60 per cent back to pre-Covid levels. However, as the efficacy and timelines of vaccination are not clear, some effects of the slowdown in the market due to the pandemic will flow over to the first and second quarter of next year. After that people will celebrate, it will be a big boom. The roaring ’20s came after the Great Depression. The worst is behind us. We are hoping that the second wave of Covid won’t happen to us.
Which industry trend took you by surprise?
I think customer confidence. While WFH (Work from Home) has changed some dynamics, people acutely felt the loss of socialising. We are very, very enthused that the demand for dining out is back. There is always delivery, but the future of dining will always be stronger and better and that will hold us in good stead.
Which is that one crucial lesson that you learnt this year?
This business is all about people and teamwork and passion can overcome any obstacle. Two months after the pandemic hit us, we could have been completely wiped out. But the courage and grit of people and the sacrifices they made saved us. Some of our staff didn’t go home for five months straight, camping inside the restaurants, pulling off 14-hour shifts to make up for those who were stuck at home.
I realised how important people and their contribution are in this business. Usually, leaders get all the glory. But I would compare restaurant workers to frontline heroes, as they were there in the kitchen cooking, feeding the police, migrants, health workers. I have newfound respect for men and women of the hospitality industry. They are the real heroes.
How would you evaluate your leadership this year
?I would give it a 5 on 10. This year, the leadership has come from the bottom. The ideas, suggestions and fortitude came from there and that gave me strength. This war was won and lost in the trenches. This business is truly all about people and I will carry that lesson with me for the rest of my life.
What will be the five big restaurant trends next year?
I do believe that trust and confidence in a brand will play a big role. The practice of trying out different things for a discount will be altered. We will see a lot more customer loyalty.
Food wise, health will play a big role.Fundamentals of business -- good food, good service, good storytelling -- will be the winners and other gimmicks will fade away.
Finance wise, 2021 will be the year of recovery and revival.
The F&B business will go back to pre-Covid levels in the first quarter of 2022.