Delivery and revenge dining: How Riyaaz Amlani survived the Covid-19 battering

Riyaaz Amlani, CEO and MD of Impresario Handmade Restaurants, at Carter Road Social; Image: Neha Mithbawker

On a hot weekday afternoon in March, the Carter Road outlet of Social is packed to its Covid-mandated capacity. Waiters shuttle briskly between the kitchen and the tables, while the clink and jingle of the cocktail-shaker gives away the beverage orders pouring in. As he surveys one of his most popular hangouts, you can tell that the ever-affable Riyaaz Amlani, CEO and MD of Impresario Handmade Restaurants, is beaming behind his mask. “We are back to 85 percent of our pre-Covid levels. I can feel a boom coming up,” says the 46-year-old restaurateur, who runs 13 brands, including the likes of Social, Soufflé I S'il Vous Plaît, Slink & Bardot, Smoke House Deli and Ishaara. “Once the vaccines roll out, people will want to step out with a vengeance.”   

This is where the redoubtable Mr Murphy must have had a quiet laugh, for, within days, cases began to surge, and a second, far more lethal Covid wave began to sweep the nation—patients mounted to lakhs daily, with a peak of 4 lakh-plus on May 6, and several states began to reel under a shortage of oxygen and hospital beds. In the middle of the unfolding calamity, restaurants were ordered to shut for a second time, and months of zero-income from dine-in returned. 

We speak to Amlani again, this time over a Zoom call from Dubai, once the second wave ebbs. But medical circles are already abuzz with the possibility of a third wave, albeit less virulent, and the sword of subsequent lockdowns hang over a crippled F&B industry. However, Amlani sounds upbeat while speaking about his prospects. “The subsequent waves will peter out at some point. The future of the business remains bright because the urge to socialise is a permanent one,” he says. “Besides, while we don’t know when the third wave will come, we now have the playbook for business during shutdowns.” 

In 2021, Amlani completed 20 years in the F&B business, having incorporated Impresario in 2001 and kickstarting his venture next year with Mocha, the ebullient coffee shop on Mumbai’s Churchgate Street, styled on Moroccan quahveh khannes. En route, he also created fine-dining restaurant Salt Water Grill, hangouts Salt Water Cafe and Smoke House Deli, and, in 2014, the ubiquitous Social that, by early 2020, clocked 26 outlets across six cities. Before the pandemic, Amlani’s company recorded a business growth at 25 percent CAGR, logged a revenue run rate of Rs 480 crore, and had a network of 58 restaurants, cafes and bars across 16 cities. In March 2020, Covid flattened it like every other neighbourhood diner struggling to figure out where its next penny would come from. 

“When Covid struck, we realised how lopsided our business was towards dine-in. In those months, we turned our focus to delivery. We had been doing it earlier as well, but through aggregator platforms and our own fleet. But with no income for months, we built delivery-only brands and focussed on developing a direct-to-customer tech interface that would save us the commissions we would have to pay the aggregator platforms,” says Amlani.  

Since 2018, in Mumbai’s business district of Lower Parel, Amlani had already run the Flea Bazaar Cafe, a marketplace of sorts for lesser-known food brands, with Social as its centrepiece. While it shut in the early days of the pandemic, continuing with some of the brands through cloud kitchens seemed like the logical extension. In one-and-a-half years, Impresario has rolled out four delivery-only brands—Boss Burger, Hung-Li, Lucknowee and Goodness To Go, while three more—Del Italia, Tandoori Pizza and One Square Meal—are in the pipeline. During this time, Amlani’s delivery business has grown by 220 percent, fetching him about Rs 5 crore per month. He expects to double the number by the middle of calendar year 2022 to add Rs 100-120 crore annually to the topline.  

The rise of the delivery business as a growth lever has also made Amlani buoyant about the gradual return of business in FY22, expecting to close the fiscal somewhere around Rs 350 crore, lower than the Rs 480 crore that he had earlier predicted but an impressive figure given the battering the sector faced due to Covid. “The losses incurred in the first two quarters of FY21 were covered by the profits made in the second half of the financial year,” he says. “We were also profitable in the years preceding the pandemic: Right now, we average about 20 percent Ebitda at the store level, while about 11 percent at the corporate level.”  

Since March 2020, the group has revamped three outlets and opened five more; four are in the pipeline in the next two months. Business since the second lockdown is also back at 50 percent of pre-Covid levels—while Delhi and Bengaluru have made a strong recovery already, Mumbai is still catching up due to the delayed opening in Maharashtra.  

Impresario has also been amping up its own delivery channels that is bringing in 20 percent of its delivery business, thus eliminating expenses for the three Ds—discovery, discounting and delivery—through aggregators. “It might look like a small number, but we consider it a leap given that six months ago, this was zero,” he says. For every delivery done through the platforms, Amlani does a back-of-the-envelope calculation, about 20-25 percent goes for commissions, 10 percent towards discounting and 5 percent for discovery (making the brand more visible on the platform). “Through direct orders, we have been saving around 25 percent on our toplines even if we offer the customer the best price. It effectively triples our bottomline,” he says.   

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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.” 

The first Social was launched at Church Street in Bengaluru in 2014 and was a mammoth success. That it’s Amlani’s headline act is evident from the 28 outposts that have sprouted across the country in seven years. “It was a disruptor. It had all the ingredients to be successful in all sorts of markets across the country,” says AD Singh, veteran restaurateur and the founder and managing director of Olive Bar & Kitchen. “Too many people rush into opening new restaurants. Riyaaz has the 360-degree vision to create products that last.”  

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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.