Riyaaz Amlani, CEO and MD of Impresario Handmade Restaurants, at Carter Road Social; Image: Neha Mithbawker
****What has seen Amlani not just through the pandemic, but also a 20-year rollercoaster in the thin-margin, risky F&B industry is his pliability and his ability to read situations well. He was entrepreneurially-wired since a kid—“I once got thrown out of school for trying to sell marbles to kids”—and started off at 16, selling shoes from a 100 sq ft shop in central Mumbai’s Sion. He shut it after six years, almost as a knee-jerk reaction after haggling with a customer for an hour over a 50 paise discount. He went off to the US and returned with a degree in entertainment management. While setting up a go-karting track for the Hiranandani group in Powai, he noticed that irrespective of whether visitors rode the cars, everyone grabbed the stale sandwiches and the machine-made coffee at the F&B console. “It told me food is central to human interactions,” he says. In almost a Eureka moment, he gathered two of his friends (one of them, Kiran Salaskar, is part of the promoter group of Impresario) and started Mocha on the porch of Berry’s, a restaurant that his father used to run. Mocha began to serve 32 varieties of coffee and sheesha, a novelty factor that drew diners in hordes. “We did so well that my father asked us to run the entire restaurant,” he laughs. Mocha, a 40-cover restaurant doing 300 covers in rotation, introduced Mumbai to the concept of all-day dining, a paradigm shift from lunch-and-dinner-only restaurants. “At that point, you could do that only at 5-stars or Udupi restaurants,” says Amlani. But its average per cheque (APC) was low at Rs 150 and, in 2008, when the then Mumbai mayor started a campaign against hookahs, Mocha began to lose its mojo.It was around the same time Amlani was offered a beachfront property in Chowpatty, but he figured that with the sun beating down on the west-facing property during the day, he could only have a limited window in the evening to make hay. The only way to monetise the property would be through a fine-dining restaurant that would bring in high APCs. In 2008, Amlani onboarded his first external investor, Deepak Shahdadpuri, who then led Beacon India Private Equity Fund, to build Impresario beyond Mocha. “I was introduced to Riyaaz by Rajeev Samant, the founder and CEO of Sula, who wanted me to meet some of the people who were shaping dining out in India,” says Shahdadpuri, now the managing director of DSG Consumer Partners. “Back then, I was looking to back homegrown consumer brands over the long term. My style of investing wasn’t so much about a brand but people who could feel the pulse of the consumers. Riyaaz had it down to a pat.”When he started, Amlani didn’t even have a name for the restaurant, later christened Salt Water Grill, but had meticulously planned what it would offer. The idea was to extricate fine dining from 5-star exclusivity and offer its classy service outside it. “Riyaaz was geeky about the service the restaurant would offer—right from the person who opens the door for you to the one who serves you,” says Shahdadpuri. But while Salt Water Grill offered an APC of Rs 1,500, in its weekend-intensive, dinner-focussed business, it could barely afford one-fifth of the table rotation that Mocha could. To get around the “inefficient” template, he chiselled it down to a cafe version, Salt Water Cafe, and then, in 2011, launched another upmarket cafe-style product with Smoke House Deli. At the cafes, Amlani noticed a lot of office-goers, who would pop in for meetings, but would linger on. “There was always a customer who wanted to work from the cafe. That spawned the idea for Social, a Mocha 2.0 if you may, where millennials wouldn’t just hang out but also could work from,” says Amlani. When Amlani proposed the idea of Social to his board, which included Shahdadpuri, there was vehement opposition. “I told him it won’t work. India just wasn’t ready for it,” says Shahdadpuri. “He insisted this was a product that will survive for the next 10 years, and was one for the masses in new India.”
****With Social, Impresario found the sweet spot that had been amiss in both Mocha and Salt Water. “Our APCs were Rs 900-plus, way higher than Mocha, and we had 5x table turnarounds than Saltwater,” says Amlani. It also offers the biggest returns on investment for Impresario, bringing in 70 percent of the business for the group, and breaks even in 18 months—“QSRs usually take four and a half years,” says Amlani. Smoke House Deli is the next-best performer with 20 percent of the business and a breakeven period of two and a half years. “Social was a brand just right for the time,” says Anoothi Vishal, culinary analyst, historian and author of Business On A Platter. “I remember meeting techies at Social, who would usually want to be seen at expensive bars. It was cool to go to Social even though the prices were inexpensive.”Vishal also ascribes Amlani’s success to putting his personal ambition as a restaurateur on the backburner. She recalls the Smoke House Room, a fine-dining project that Amlani set up in Delhi in 2011, which, she says had excellent food, but was too formal and expensive. “Delhi didn’t accept it and he lost Rs 12 crore on the project and shut it,” she says. “Unlike other entrepreneurs, he didn’t fall into the trap of continuing with it despite not making money.” With it, Amlani also learnt from his mistake of straddling two boats. In the wafer-thin margins that the F&B industry offers, one can be either a limited super concept model, like Olive, or one that chases the economics of scale. “Restaurateurs slip up because they get mixed up between the two models, trying to force something that is not inherently scalable to scale,” adds Vishal. Amlani realises the need to have a multi-brand portfolio to help his company go both deep and wide, but is cautious enough to assign specific roles to individual brands—a Social, for instance, would help him go deep and scale up to 300-plus outlets in future, while there could be only a few of boutique restaurants like Slink & Bardot and Soufflé I S'il Vous Plaît. In 2017, L Catterton, the world's largest consumer-focussed global private equity firm backed by luxury multinational company LVMH, bought a controlling stake (of 70 percent) in Impresario, buying out Shahdadpuri and Mirah Hospitality (which had invested Rs 48 crore in the company in 2011). L Catterton invested Rs 100 crore in the business that helped Riyaaz open up seven more Socials and five Smoke House Delis. “When they came in, our topline was at Rs 230 crore. In three years, before Covid hit, we had a revenue run rate of Rs 480 crore,” says Amlani. “We typically identify trends that shape consumer preferences, and drive purchasing behaviour, and then partner with the founders and the management of companies that stand to benefit from such trends, to put them on an accelerated growth path. Impresario was a good example of this approach,” says Saurabh Mehta, investment principal at L Catterton and director, Impresario. “With brands like Social and Smoke House Deli, and dining concepts which already had proven strong unit economics, in Impresario we saw an immense potential for further growth.” Over 20 years, Amlani’s business has been built on the soft skills of catching a trend early. With the pandemic headwinds tapering off, he, along with Impresario, seems well poised to cash in on ‘revenge socialising’. He says he’s been on the edge a few times before—when hookahs were banned, when only half of the funds materialised while Social was being planned, or when the highway liquor ban came into effect and 40 percent of his restaurants weren’t allowed to serve alcohol. “I believe I’ve done enough net practice to play the Test match against Covid,” he says.