This Restaurant's High ROI Franchise Model Led To 350% Growth In FY18
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Anurag Mehrotra, CEO of Charcoal Eats, co-founded the quick-service restaurant (QSR) brand along with Krishnakant Thakur (COO), Gautam Singh (CTO) and Mohammed Bhol (CPO) in April 2015 with a strong belief that 'good food can excite people'. The aim was to enhance the Indian palate by building a large and scalable restaurant brand in the country, thereby, providing great quality food at an affordable price.
Read on the exclusive interview of the Co-founder and CEO of Charcoal Eats, Anurag Mehrotra who tells it all – the journey of the QSR brand, key accomplishments and the expansion plans.
From Charcoal Biryani to Charcoal Eats – The Journey
I am a Commerce Graduate from the University of Allahabad and an MBA from Asian Institute of Management, Manilla. Prior to venturing into the entrepreneurial journey, I have held senior positions in large corporates like Kotak and Edelweiss. I have been a part of the startup domain for the past six years, and I, currently, serve as a Director on the boards of Coverfox, Capzest, Woodbox& Alien Adventure.
Charcoal Biryani, as it was originally called, started with six biryanis served through multiple cloud kitchens across Mumbai. In August 2017, we pivoted to a customer facing dine-in model with our first outlet in Pune. We also moved to a franchise model for these new outlets. To support this retail push, we started expanding our menu to offer an all-day meal and snacking options, and subsequently rebranded as Charcoal Eats in March 2018. Today, Charcoal Eats offers high quality, all-day food options across snack and meal times that include Biryanis, Starters, Rolls, Loaded Fries, Curries, Puff Pizzas, Beverages and Desserts. Customers can dine-in, takeaway or order for delivery, as per their convenience.
Key Accomplishments of Charcoal Eats in 2018
Charcoal Eats is currently present with 38 dine-in and express outlets across 12 cities - Mumbai, Navi Mumbai, Thane, Pune, Gurugram, Nashik, Chennai, Gandhinagar, Jamshedpur, Indore, Bengaluru and Jaipur. We have also set the groundwork for our international foray.
In terms of revenues, we have shown growth of almost three times from April 2018 to December 2018, with a revenue run rate of INR 17.5 mn for December 2018 v/s INR 6.0 million in April 2018. Our order numbers have shown a 350% growth from April 2018 to December 2018, with approx. 48,000 orders in December 2018, up from 13,600 orders in April 2018.
This growth has been driven by two factors - our pivot from a ‘meals only’ to an ‘all-day dining’ menu and the increase in Charcoal Eats outlets across the country.
Our menu comprises a wide range of high-quality all-day dining and snacking options, at affordable prices. This delicious menu is now available to customers at their convenience – dine-in, takeaway or delivery. Customers can order delivery online through our website, mobile app or any of the leading food aggregation platforms, or they can simply call our customer care to place their delivery orders.
A key element of our growth story is the hassle-free, high ROI franchise model for people looking to start their food business. The company takes care of the food, supply chain, marketing, technology and customer care, while the franchisee focuses on managing outlet operations and local area marketing. Multiple outlet formats (dine-in, express, mini) allow us to open outlets suitable to a location’s specific requirement/ profile. All Charcoal Eats outlets are designed to be capital and resource efficient, enabling quick break-even and profitability at an outlet level.
Charcoal Eats follows a hybrid distribution model, with a mix of the franchise and company-owned outlets. This mix is currently at 50:50. Our franchise partners are motivated to associate with Charcoal Eats due to our obsessive focus on quality and customer delight.
The company proactively seeks customer feedback and has made many product/service improvements over the past couple of years based on these customer insights.
We have been recognized by Radio City, a leading pan India FM radio station, for Excellence in Food Retail, 2018.
Charcoal Eats’ Expansion Plans for the Next Two Years
"We are quite bullish on our growth both in terms of volumes and revenues across all our formats and locations."
We are increasing our presence in the metros and at the same time, we have started expanding to tier II cities. We are already present in Jaipur, Jamshedpur, Gandhinagar and Indore. We foresee substantial domestic growth coming from tier II cities and have ambitious plans to establish our presence in many more such cities by FY 2020.
Innovations at Charcoal Eats in the Upcoming Years
We will continue on our mission to bring consistently delicious Indian food to people across the country. Ensuring increased levels of consistency in taste and maintaining high quality will be our focus of innovation. Effective, environment-friendly packaging will be another area of innovation focus for us. Menu innovations will take the form of new products, flavours and new category introductions.
Optimizing Menu Boards to Increase Sales
Menu boards are cost-effective to keep customers up-to-date with pricing, products and promotions. They also help in faster service as customers make quick menu decisions. We use these to display real-time changes in the product pricing and availability to the consumers.
Our automated menu boards also allow us to promote daily specials and offers that help drives sales and contribute to increased profits.
Technology Innovations in the QSR Industry in Upcoming Years
We see the following areas where technology innovations will play an important role in the QSR industry in coming years:
- Personalized food recommendations to consumers, based on their past behaviour and preferences.
- Accurate demand prediction for efficient capital and supply chain management as well as waste reduction.
- Dynamic pricing based on demand-supply patterns.
- Enhanced multi-channel customer engagement to deepen the relationship.
Food Trends in 2019
Some key food trends in 2019 are:
- Emphasis likely to be on ethnic regional Indian cuisines.
- People are extremely health-conscious nowadays and so the focus would be on eating natural food, especially organic, non-processed and genetically modified food.
- Health and wellness will be the basis for preference for a larger number of consumers.
- QSRs will increasingly look at ways of making their food more wholesome and free of harmful additives in order to appeal to the growing number of health-conscious consumers.
- With eco-friendly and zero waste management becoming the focus of the food industry, sustainability is the core of how food will be approached.
- Alternative ingredients like goat milk or soya milk instead of cow milk will be preferred especially the ones that are at par in nutritional value.
- Innovative food packaging will replace traditional methods to meet the needs of environmentally conscious millennials.
- Snacks will be fancy and an important element of the daily routine.
- Preference for home-cooked food among the younger generation is increasing and this offers scope for food-tech companies to offer interesting meal kits for cooking a wide range of delicious wholesome meals at home.