Ambuja Neotia’s hospitality vertical currently operates over 100 outlets, which include a combination of hotels, restaurants, QSR, banquets and clubs: Parthiv Neotia, Director at Ambuja Neotia Group
In an Interview with BW Businessworld, Parthiv Neotia, Director at Ambuja Neotia Group talks about Tea Junction’s story and more
Kindly introduce tea-junction, how did it start and the story behind it?
Tea junction has a very old story, it's the first organized QSR that came into the whole country that started in 2004 with a simple concept that my father came up with called Adda. Adda, in Bengali , comes from the pre-independence days where intellectuals used to gather at the tea shops to discuss politics or Independence movement. That's the concept of Adda that was originated and hence Tea-junction in 2004 became the first format that we introduced in our first mall, in City Centre in Kolkatta. Primarily, the concept of it becoming a spot for people to come, chat, have a cup of tea along with some snacks. So, it dates back that long but the journey for which has been slow because, for the first 10 years, we only had about 10 outlets. It was slow progress; at that time, in 2004 the market for QSR segment and the team industry were not very ripe. By 2015 we had about 19 outlets and as of today in the last three years approximately we are standing at 55 outlets and we intend to add about 60 more over the next 12 months. and a total of 500 outlets over the next 4 years.
What does the future hold for Tea-junction? What is your vision for the company for the next five years?
Ambuja Neotia’s hospitality vertical currently operates over 100 outlets, which include a combination of hotels, restaurants, QSR, banquets and clubs. Only last year we decided to expand beyond East India starting with U.S based foods franchise called Uno's Chicago Bar and Grill and we currently have three units of that in Bangalore, Delhi and in Kolkata, followed with Tea Junction’s entry to Delhi and North India. Over the next 5 years we have decided to put a very strong focus on the structured & agile growth of our F&B businesses. Our focus is to have dominating brands in the QSR and restaurant from our current bouquet of brands. Additionally, we are introducing three concepts in the cloud kitchen space. The introduction and acceleration of the delivery market size has drastically impacted the F&B industry. This industry from being a luxury segment of outdoor dining has evolved to a convenience segment thereby not only increasing the pie but also changing the dynamics of the business. With expansion plans in QSR, cloud kitchen and restaurant space we intend to operate over 800 hospitality units over the next 4-5 years.
Tea-junction is entering the market in various cities. So, what are the challenges being faced?
2019 has been a rather disruptive year for the F&B industry with both online delivery and deep discounting gaining immense traction with the netizens/ millennials. The concept of restaurant from being a luxury segment has become more of a commodity. Today, it has become not only cheaper but also desirable to order meals online on a daily basis than maintain the entire kitchen which today is looked as a cost, wastage and unnecessary effort. This has been a transformative change which might require the business model to evolve with it. Furthermore, deep discounting has too changed the landscape of dining out. Earlier restaurants used to compete on food, service, experience but now discounting too has become a competitive advantage for the industry. Hence, with restaurants moving out of the luxury segment because of online delivery coupled with deep discounting the F&B sector is going through a change in business model in order to remain viable. However, for the QSR segment delivery has been a great addition to not only the revenues but also for accessibility. QSRs are typically a lower capex model with limited or no seating thereby eliminating a large part of the front of house expenses. Additionally, most QSRs have thrived on basis of captive audience or high natural flow of people. The delivery segment hence can be of great value proposition to the QSR businesses as it inevitably increases the reach of the brand. Additionally, due to the current limitation of the organized QSR segment in India, (Which is on a exponential growth pattern) deep discounting hasn’t had a very large impact on the model due to the low price points but with restaurants using this as a practice has led to some cannibalism of customers due to value of money options.
Any expansion plans?
The group has invested around $10 million in the F&B businesses in order to create a national presence in the restaurant, QSR and cloud kitchen space. Tea Junction so far has grown from its own profits and similarly we intend to grow all our business profitably and might source external capital in the future to reach our goal of 800 units in the next 4-5 years.
What is the favourite dish in the Tea-junction menu?
So, in terms of beverage, my favourite is ginger tea and we have recently launched a new bubble tea, which is the Orio flavoured bubble tea and that is phenomenal. I think my all-time favourite is Samosa. The fastest seller in the beverage is Masala chai and in food it is Samosa.
Your uniqueness against the competitors?
For us our business is not only to balance the existing demand and supply but to offer an experience which the customer starts demanding. Even with tea we are looking to serve our customers with an experience. Tea is something that people drink when they want to take a break. Anytime you're having a cup of tea, you are taking a break. When you wake up and you have a cup of tea, you are taking a break from sleep and when you are at work and you go down and buy a cup of tea. It's a break from work. When you reach home and take a cup of tea, you are taking a break from your day. So anytime people having a cup of tea its is because they are taking a pause in their life and it's a very important moment. With UNO our goal is to make the customer experience the classic American casual dining, starting with the design, F&B, and most importantly service. Many of the international brands that have succeeded have been able to bring in their element of culture of their operations.
We would like to establish a F&B brand that is able to cater to all masses and classes through its formats. That helps us being a household brand in food over a period of time and hence our uniqueness is to do with our approach towards the business and not from the perspective of a product or a format.
Around The World