Media Coverage

MONTHLY SPECIALS: THE SEASONAL SLUMP

Date : 20-May-2017

Did you know that it’s no coincidence that Restaurant Week India is held in April? Did you know that Mumbai restaurants will be working harder to get your business this month and the next? Did you know that many eateries in the city struggle to break even in the first quarter of every financial year, or at the very least face a significant drop in revenue?

I didn’t. Over the last couple of months, the summertime slump in Mumbai’s dining scene has been mentioned to me at industry events, in interviews and by friends who own food businesses. It happens every year, they say, but it’s still disheartening for them, food suppliers and ancillary industries. When I began to ask around, I was surprised that it wasn’t common knowledge.

After speaking to a bunch of restaurant owners and industry folks, I found that there are sundry reasons for the slump: financial year-end budget cuts in March; school exams in April; intense heat and summer holidays in May. June sees a slight uptick before a couple of washed-out weeks in July.

Summer is a bummer
“Our second two quarters (October to December and January to March) are always better than our first two quarters (April to June and July to September),” said Riyaaz Amlani, CEO and MD of Impresario Entertainment and Hospitality, which owns chains such as Social, Salt Water Cafe and Smoke House Deli, and the current president of the National Restaurants Association of India. “About 30 to 50 per cent of restaurants in Bombay would make a loss at this time. Many restaurants operate on slim margins – 11 or 12 percent, 15 if you are lucky – so a 20 or 25 per cent drop [in occupied tables and therefore revenue] pretty much wipes out your profits.”

Apart from a few outliers, every restaurant suffers a summer slump, said Romil Ratra, director of Bellona Hospitality Services, the F&B wing of the Phoenix Mills group that owns Shizusan and 212 All Good at High Street Phoenix in Lower Parel and Bar Bar and 212 All Day at Phoenix Marketcity in Kurla. According to Ratra, the dull season extends all the way to June, because of holidays in IB schools. “In April and May, the whole mall gets hit,” said Deepti Dadlani, the VP of marketing and branding at Bellona. “Not all people see a mall as an F&B destination; so many restaurants in malls get spillover business. During summer holidays, the largest travelling audience is families, so [in Kurla] Hamley’s and us have the same spikes and drops in business. Thirty to 50 per cent is conservative; I’d think a higher percentage of restaurants in Mumbai face losses for a couple of summer months.” The seasonal slump has been made worse this year by the ban on establishments selling alcohol within 500 metres of a national highway.

The low margins are a consequence of the high fixed costs (rent, utilities, equipment, staff salaries) of running a restaurant, which have to be paid irrespective of the number of customers. “The problem with Mumbai is that the rents are so high,” said Mangal Dalal, co-founder of Cellar Door Hospitality, which organises Restaurant Week India. “It would be awesome if rent prices were seasonal. Also, staff salaries are much higher in Mumbai.”

The slump plays out variously across formats, locations, and cuisines. The impact is lower for restaurants situated in office-heavy neighbourhoods such as Lower Parel. A category of eateries that seems to have a relative degree of immunity this summer are those serving pan-Asian food. It’s currently the most popular cuisine in the city, with the maximum number of new openings (Haka, Kuai Kitchen) and expansions (Pa Pa Ya, The Fatty Bao) in recent months.

Naturally, the slump also affects suppliers. I spoke with a food importer, 90 per cent of whose business is B2B, supplying ingredients to restaurants and high-end supermarkets. “April, May, June and July are bad for business,” said Anil Chandhok, owner and director, Chenab Impex. “The slow months are about 25 per cent lower than the regular months, and this is as true of sales to hotels and restaurants, as it is for retail. Mid-August to mid-March is a good time for the food industry and for us.”

Around these months, most restaurants limit the amount of stock they buy. If they’re short-staffed, they wait until business picks up to hire. During the summer months, sometimes one person does the work of two.

Different seasons for different reasons
The format affects the season an establishment experiences a slowdown. For most bars and restaurants that are also popular drinking spots, the slump occurs at different times of the year. At beer-focused bars such as Woodside Inn, for instance, the slowest season is during the monsoon, because the enthusiasm for a chilled beer waxes with the heat and wanes with the rain. Woodside Inn has its annual Beer and Burger festival in July so that customers have a compelling reason to visit, said co-founder Pankil Shah.

“We don’t have a summer slump,” said Tarini Mohindar, co-founder of Cafe Zoe. “Our numbers drop in October [and] November because around Diwali people want to go to house parties. In December, it boomerangs right back. There is a slight dip in the monsoons, when [the number of] deliveries go above footfalls.” The slack season, interestingly, is different for each city. In Delhi, for example, winter is house party season and its restaurants do really well in summer.

Religious festivals affect footfalls all over. The navratris, both Chaitra (during March-April) and Sharad (during September-October), make people more austere in their food and drink choices, and so they’re less likely to go out.

The low margins are a consequence of the high fixed costs (rent, utilities, equipment, staff salaries) of running a restaurant, which have to be paid irrespective of the number of customers. “The problem with Mumbai is that the rents are so high,” said Mangal Dalal, co-founder of Cellar Door Hospitality, which organises Restaurant Week India. “It would be awesome if rent prices were seasonal. Also, staff salaries are much higher in Mumbai.”

Cool incentives
Restaurants adapt to the slump in different ways. Over the summer months, many advertise more on delivery services such as Scootsy, Swiggy and Zomato because people are disinclined to step out. During the monsoon, at Bellona, they budget for buying umbrellas for customers who have left home without one and then can’t leave because it’s raining. During April and May, they reduce expenses on kid-friendly paraphernalia like colouring books and pencils and tray liners with puzzles.

After March, marketing spends increase and budgets are available to restaurants to execute targeted activities for different consumer groups: corporates, expats, young adults, ladies who lunch. “We’re not waiting for customers to come in; we’re making them come in,” said Ratra, who maintains a calendar for each of his nine outlets with unique plans to incite interest in them throughout the year, depending on the city, neighbourhood, format and cuisine. He has been one of the earliest supporters and participants of initiatives like Restaurant Week India.

Among the incentives used to draw diners in are special menus and events such as pop-ups and gigs. For instance, the flagship Bandra Kurla Complex outpost of SodaBottleOpenerWala has just launched a new menu, its first since opening in September 2015. Massive Restaurants, that owns Masala Library, Pa Pa Ya and Farzi Cafe, is offering ‘year-end’ set menus featuring signature dishes at all its Mumbai establishments. At Cafe Zoe, to make up for the slack on Monday nights, they host jazz music jam sessions. It’s still rare to just walk in and get a table at the two-year-old The Bombay Canteen, where the menu is changed seasonally to keep the offerings fresh.

Restaurant Week India has been gradually and intentionally been made to coincide with the slow season, said Dalal. In 2010, the year Restaurant Week was launched, it was held in September. In 2011, they added a February edition, which they moved to March in 2012 before settling on April. During the off-peak months, Dalal said, it’s far easier to market the promotion to restaurateurs.

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"Prices of all imported products have seen hikes" - Food & Beverage News : www.fnbnews.com

Date : 13-Jan-2014

The Mumbai-based Chenab Impex Pvt. Ltd, a leading food importer, has been importing a range of products (from cereals to chocolates to cheese accompaniments to nuts and oils) since 2002. Although it has carved its niche, it continues to face several obstacles in the current scenario of inflation. In an interaction with Harcha Bhaskar, Anil Chandhok, the company’s director and owner, shares his views on the current market, and how the situation has made both importers and consumers price-conscious. Excerpts:

What are the various products imported by you, and from which countries?
We import various products like chocolates, olive oil, frozen sea food, meat, sauces (tomato and mustard) and biscuits. The products are sourced from their countries of origin.

For instance, chocolates are imported from Italy, sauces from the United Kingdom and France, olives from Greece, France, Spain and California, and biscuits and cookies from the United Kingdom, France and Italy.

What is the impact of inflation on imported products?
The prices of imported goods have shot up to 25 per cent. The rupee has depreciated in terms of current foreign value exchange. For instance, one Euro was worth Rs 67 yesterday, and today it is equivalent to Rs 85.

Consequently, there is also an increase in the maximum retail price (MRP) of the products. So basically, it is the consumer who would be bearing the brunt of inflation.

Also, to some extent, even the importer faces difficulties and experiences losses in the recent trade. The losses are incurred on both old and new import orders.

How do traders face losses?
The prices suddenly rose between May and August. There is an increase in the difference between the exchange rates of the products. Thus, three or four importers incurred an unexpected loss.

For example, when import orders were given, the value of the products, as printed in the bill, was Rs 200, but when they were received by the traders at the port, the value of the product had increased to Rs 225.

Which are the major ingredients that have gone through increases in price? The prices of all imported products have witnessed hikes.

What are the various factors causing inflation?
For importers like me, the factors that affect the MRP of the product are as follows:

Current value of the rupee
The value of the rupee is depreciating in the foreign market. Because of this, there is an increase in the exchange rate of the product.

FSSAI’s stringent norms There are stringent rules laid down by the Food Safety and Standards Authority of India (FSSAI). At the port itself, the goods are held by FSSAI for scrutiny. These may later be rejected owing to petty issues related to labelling.

When rejected, the supply is stopped again. The order has to be placed, and the products would take a few months to reach the market again. Meanwhile, the consumer has no choice but to buy the available products or alternatives whose prices have already scaled up.

These goods are kept at the port for the 100 per cent product sampling, which means taking one product from the whole consignment for the testing. Here too, the testing fee for the consignment and costs of damaged products would be incurred by the importer.

The consignment is kept at the port for almost 6-10 days. Sometimes, there is damaged to the good that are temperature-sensitive. Such instances take place mostly during the festive season (between Diwali and Christmas).

Failure in agriculture commodity overseas due to weather
Because of bad weather in the country, the crops get affected or destroyed, and there is an increase in the price of product. In such a situation, there were increases in the prices of products from every country, owing to the shortage of the product in the market.

What are the prevalent organic food trends in India? What are the perceptions overseas about organic foods from India, and in the case of negative ones, how do you clear the same?
The consumption of organic foods is India has grown. Though compared to foreign countries, the Indian organic food market is still growing at slower pace.

But from the regulatory point of view, organic food is not a different category, and there are no specific regulations for the same. Organic foods are imported in the same manner as other food items.

Who are the major clients you supply your products to?
Our products sell throughout India. And our customers include the luxury five-star hotels, fine dining restaurants, gourmet stores, and modern and traditional retailers.

Our current clients from are luxury hospitality chains like the Taj, Oberoi, the Hyatt and the Leela; retailers like Godrej Nature’s Basket, Food Hall, Spencer’s and Hypercity.

Will there be an impact (or change in consumption pattern) of it on the food processing, hotel and restaurant and other multi-national corporation (MNC) sectors?
I cannot specifically answer this question, but yes, household consumers and chefs may either opt for alternative products which are cheaper in rate comparatively, or may using it.

But it has been seen that many retail food supermarkets are shutting shop. What could be the possible reason behind it?
The location, staff, rent and maintenance costs would be the primary reasons, as it is difficult to shell out high amounts for rent and maintenance when there are fewer footfalls.

Also comparatively, the margin of profit they earn on the products is very less.

What are the current trends noticed by you in regard to new products in the market or consumer preferences?
As an importer, as I can see there is acceptance and preference given to gluten-free products. There is a cereal called quinoa from South America, which is known as the healthiest food till date. It is entering the Indian market. It has a healthy amount of manganese, which no other daily food has. Because of its health perspective, quinoa is popularly known as a wonder crop. Lamb meat from New Zealand is also gaining lot of attention from consumer.

Although many new things can come to India, it is difficult to enter the Indian market, due to stringent norms.

The rules in India are 50 years old and outdated compared to other countries, which are constantly researching and updating their rules and progressing.

What are the current trends noticed by you in regard to new products in the market or consumer preferences?
As an importer, as I can see there is acceptance and preference given to gluten-free products. There is a cereal called quinoa from South America, which is known as the healthiest food till date. It is entering the Indian market. It has a healthy amount of manganese, which no other daily food has. Because of its health perspective, quinoa is popularly known as a wonder crop. Lamb meat from New Zealand is also gaining lot of attention from consumer.

Although many new things can come to India, it is difficult to enter the Indian market, due to stringent norms.

The rules in India are 50 years old and outdated compared to other countries, which are constantly researching and updating their rules and progressing.

According to you, when is the situation of inflation expected to recover, and what are the steps that the government should undertake to control food inflation?
Nobody can say that. However, the situation would be the same for about a year. Currently, the government functioning is not good. There is no balance between the imports and exports of the country.

The stability of the market mostly depends on the demand and supply. As business consumption goes up, demand increases, more people buy, and the gross domestic product (GDP) grows.

There is a lack of governance. There is no new investment and infrastructure by the government or encouragement to businessmen to earn money or start a new business.

According to you, how would 2014 be for the traders?
Traders must be cautious in the coming year. We do not know what would be the position of the rupee.

If there is quantum easing in the United States, the rupee may go worse. Prices may also go higher. There is no clear picture in the amendment of food safety activities at the port by the government.

The only thing I can say is that the worst effect of this situation is going to be experienced by the consumers only. These may be housewives who buy groceries at retail outlets like Godrej Nature’s Basket or chefs who cook at hotels and restaurants.

There are going to be several changes in consumer preferences, because there is little choice left for them in the market, because of inflation.

The ingredients or products that they were using till now may not be found in the market. If found, they won’t be at the same market value as they were in the year 2012.

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The Ingredient Supplier: Anil Chandhok of Chenab Impex

Date : 17-April-2012

"I love it when a chef says, 'Wow, I've always wanted to make this dish and you've brought the ingredients for it into India,'" says Anil Chandhok, the director-owner of Chenab Impex. The company currently has a portfolio of 60 brands and 900 ingredients, from over ten countries and none of them were regularly available in the Indian market until Chandhok decided to import and distribute them. Walk into a grocery store, and the shelves of Blue Elephant Thai paste, La Costena Mexican salsa and French quinoa are likely to bear the Chenab Impex label.

In addition to retailing its products, Chenab Impex, which Chandhok founded in 2002, also supplies its goods to all the major hotel chains and almost every restaurant using imported ingredients in the country. California Pizza Kitchen uses their chipotles and Italian tomatoes, Bungalow 9 uses their peri peri chilli peppers, Burgs uses their habaneros. Borges, the olive oil that has now become ubiquitous even in kirana stores, was introduced to the Indian market by Chenab Impex in 2003, before the 115-year old Spanish company went on to set up an Indian subsidiary in 2010. “None of these products had an existing market or demand,” says Chandhok.

After introducing basic ingredients (like flour and salt), ready-to-eat (cookies) and ready-to-cook (Thai curry pastes) products, Chandhok now plans to expand into cold-chain products such as ice cream and meats, as well as more unfamiliar ethnic foods (Peruvian peppers and Italian mostarda, for example), baking ingredients (speciality flours from Italy for pizzas and pasta), and foods that comply with diet restrictions (gluten-free crackers, pastas and flour). “When a housewife goes shopping, she doesn’t only buy international foods like olive oil,” says Chandhok. “She also buys flour, salt, sugar, pepper, crackers, and so on. I want to offer her the best of the world in all of these products.” And if we have been seeing a little more molecular gastronomy on our menus, some of it is thanks to Chenab. The company has recently become the sole India distributor for Sole Graells El Bulli Texturas, texture-altering ingredients that have been created by celebrated Spanish molecular gastronomists, Ferran and Albert Adria.

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