What do you do when you want to have burgers? We ring up at McDonald’s. And what if you are howling for some spicy north Indian food, we go and search on Google, Zomato, and other online channels. This is where the problem is for Indian food business. India is still in waiting for a MacDonald’s of its favourite North Indian food.
It’s not surprising that in McDonald’s long-standing legacy to curate yummy burgers, the burger maker has become synonymous with burgers themselves. This is the sort of legacy that Norfest, a Dhaba-styled quick-service chain food startup curating North Indian food, wishes to create.
- Making Hygienic and Tasty Dhaba Food available quickly at affordable rates via Multi-Format, Hybrid Channel
- Dhaba Food from Highways to Cities
- Fused with urban cafe culture (An Urban take on Dhaba)
- Transparent kitchen to infuse confidence on hygiene
- Highly engineered menu with Low Tat Semi Assisted Model
- Process and Assembly company than food production
- Asset light model makes it fast scalable
- Focussed approach on creating Global QSR network
How did the egg hatch?
Before the three musketeers came together for the venture, each of them was individually trying separate ventures. As they went through various industries scouting for problems and solutions, the food industry became the top priority for them to explore although they were sector agnostic and could have been in any industry.
This is what the founders had calculated.
Just a simple situation to start with. The US has over 300 million people and around 80% of top 100 QSR chains of the world are from the US while India is 4 times of the US in terms of population and no brand from India stands anywhere close to being Top 100. This is what inspired the founders of food startup Norfest to create India’s very own Indian food QSR.
Prateek says, “Hence, we decided to create a highly organised, hygiene-focussed affordable premium scalable QSR chain which would be present in major clusters of India via its three formats and hybrid channel basis such that majority Indians may have access to hygienic food. At the same time, we wanted to create a brand of national importance with the intent to put some brand from India in Top 100 QSR chain of the world.”
They registered a partnership firm in October 2015 with and the first outlet of Norfest came alive in April 2016.
As Prateek recalls, “We started with a team of 3 management i.e. us 1 Founder and 2 Co-Founders and a team of 5 kitchen operations team. As of now, we have 60 employees in total including a Group Head Chef and a Group General Manager.”
Those Money Matters
The trio had put in some INR 65 lac in the beginning to open two outlets and rest has been fuelled via Internal Accruals and Short term debts.
The Story of Overcoming Challenges
Challenges are a part of lives. But with startups, you are on a continuous exchange of fires with the world. Prateek rightly enunciates, “Thinking about the growth strategies while at home and never switching off from work has been a challenge for us sometimes.”
Another challenge was to raise enough funds from banks. “I guess the situation is still very dark as even though we are a recognised Startup by DIPP, GOI and all certificates are in place, Govt. funded schemes whether be it via private bank channels or any channels were not ready to fund due to many untold reasons. So, one needs to plan the growth considering the availability of funds,” observes the founder.
The food startup also faced the challenge of depending on unskilled work-force but they are working on it to make the operations automated to reduce or pursue career progression planning for our workforce similar to corporates.
As Norfest continues to grow and exhibit exemplary set up, it has been in the market for 3 years now.
It has five operational outlets at various places in Hyderabad. Its upcoming four projects are lined up in Bangalore, Delhi, Chennai and Hyderabad. In terms of sales growth, it has seen a consistent 30% increase each quarter for the past 11 straight quarters.
Factors That Worked
The startup hasn’t been pursuing much marketing and made sure the basis of business is happy customers, quality service and premium level food. It adopted an exclusive online channel policy where it was selling only on UberEats. This helped the business gain good margins from UberEats.
Keeping Kitchens transparent to infuse confidence amongst customers and constant training of the kitchen and service staff has been mandatory.
Taking care of on-time last mile delivery and choosing important locations are some of the other factors which worked for the startup and is still working.
Prateek points out, “Masses in India are not looking for luxury but basic things with the right quality which can sort their lives. If you are able to deliver these requirements and that too consistently than there is no looking back. This is what worked for Indigo and this is what is working for us.”
Expansion Plans for 2019
For 2019, Norfest plans to commission our long pending Base Kitchen model, capture 3 more clusters in Hyderabad and parallel, and it has zeroed on Delhi NCR, Bangalore, Vizag and Chennai to expand by the end of FY2020. So in total, it targets to increase from the current six to 20 by the end of FY2020. This will be fuelled via part company owned and part franchise owned network.
The CEO also says, “We also plan to integrate well with corporates and increase our current tie-up with 5 Top corporates in Hyderabad to 20 to cater to their on-demand requirement (Not the daily catering). We are also an empanelled Food consultant and suppliers to Tier 1 rates global organisations in Hyderabad currently.”
On this, Prateek is quite candid. He says, “Practically anything which fulfils hunger pangs is our competitor. Ideally, we are competing with Box8, Fasoos, FreshMenu and Eat.fit. However, we are pretty bullish of our growth in spite of these heavily invested company as we are EBITDA positive company from day 1 and we have a multi-format, hybrid channel policy with direct customer connect. Customer recall and retention is not an issue with us as we have a physical presence in strategic locations and hence communication is easy.”
Norfest as a food startup has many score points.
It adopts fresh food prepared from its central kitchen philosophy rather than outsourcing frozen food from various factories.
It sells offline and online and also invest in training the staff in high degree training and career progression.
All the outlets (except Dark Kitchens) have a basic feature of Handi Look and Transparent Kitchen.
Handis give you a sense of Eating at Dhaba and Transparent Kitchen gives you a sense of confidence in terms of hygiene. Apart from this, it has Semi-Assisted model in the restaurants i.e. no waiters. This, Prateek says, helps them in saving cost which drills down to customers and helps in keeping a check on the prices.
Another USP is “one glance menu”.
The founder says, “We have a highly engineered menu to make people do quick choices and hence stay close to QSR model. We have built our small moats in various ways which have worked for us not once but at 6 different places and hence the model has proven right, accepted and scalable. So, the concept is to bring the Dhaba Food from highways to cities, club it with cafe culture and create Fusion Dhaba.”
Apart from this, it has made sure to be leaner from beginning i.e no flab company. Parallel to this, it made sure to use the 3rd party logistics company like UberEats and Zomato to build a customer base and solve discovery issues.
It has a 6-8% penetration in North Indian Segment in any cluster it operates in. This is a Data vetted via Zomato and UberEats.
The Founder of Norfest realised there are far too many distractions in the market. For any startup, he suggests it imperative not to lose focus. “No distraction and no dilution. This is an ongoing thing and hence very important to create company culture and ethos and make people aware of same,” he says.
Till date, the startup has served close to 1.2 million customers so far since the beginning and is serving close to 1,500 consumers on a daily basis.