How To Perfect The Product Strategy
Interviewer: Amit thank you so much for joining me, you know you wear two hats, one is that of a vice chairman of Dabur, one of the biggest FMCG companies but you are also becoming the largest restaurant owner in the country with with Lite Bite so am going to start by asking you a very difficult question, what were the two three milestones that got you here.
In terms of Dabur I think as so I talk in two things also, in terms of Dabur I I think I saw an opportunity in the fruit juice market when I came in after studying abroad and I felt that there was nobody no you know player there or known player in the industry and my milestone was to create that industry. I have always tried to be in in in the industry by for creating a category. So when I started in with Dabur, as Dabur Foods Ltd. I saw an opportunity because you know outside everywhere in the world there was people having fruit juice in the morning before they went to work and only in India that culture was not there but people still love fruit juices but there was nowhere they could get that product. You could only get those tins with preservatives in there. So I started that and today by the grace of God, it’s about a thousand crore, thousand crore product for us, which is probably the largest in the Dabur stable. So my milestone was to create the category. If I was to look at the FNB, I again when I saw the space and the retail space for coming up, I felt that they are only mom and pop stores there. So if McDonald is a brand can come into India, why can’t we make brands which can be at least here first and then could be transported outside. So that was what my goal was to start with. So I started creating brands with Punjab Grill street foods and Bakers Street and Zambar and Asia Seven and I felt that if if we create good brands every mall will require something like that because as you know that the food and the entertainment is where what people are now coming into malls for. So we created those brands and put them into different malls and for for me I in India i think location is everything. If you get a good location you can fill it up with all your brands and it has to do well because foot falls are there and that’s what happened and from that learning I also got into the travel retail space in the airport, in here Bombay and Delhi and now we are going into the railway space which is again a transport space which is huge in terms of the number of people who are travelling. Like if you look at the number of people at Mumbai airport is thirty four, thirty five million per year. In in the railway space its twenty four million a month. So those are the differences which are there, so.
Interviewer: that that’s wonderful you know, am gonna ask you a, you know internationally Americans have been so great at creating food retail brands, right, your KFC was a nothing but fried chicken and McDonald was a petty in a bun and its really become international and how. They have set up processes. They have got books written about how the McDonalds ways etc. You have taken a couple of brands overseas. So I am gonna ask you how close are we to an Indian brand becoming a McDonalds or a Domino’s.
I think we are probably the only company in the FNB space here who actually has an ERP solution. We have use SAP for our process. So you know as I just wanted to make it a chain, I can’t be there every day, every when every of my Punjab Grills, so we have to create a process and that’s what we have done. So what happens is that all the recipes are documented. All the pictures are taken of everything of what its supposed to look like, it’s in all our restaurants at the back end. Similarly all your service is all documented. Trainings are given. I think we are quite there in terms of taking a brand outside and we have done that actually we have opened Singapore already. Bangkok is opening in the next fifteen days. We have franchised it to Bangalore. Chennai also again opening. We have opened in Abu Dhabi, two brands already in Abu Dhabi. So we have actually made the process right, we have documented it well because you know today a franchisee demands a lot from you. You can’t just take the money and tell him to run with it. He actually wants what what is in it for me, not only just the board of Punjab Grill there. So from that point of view you know we give them inputs in terms of marketing what we do, collaterals for that. We give them training at before and after. We hold hands, hold their hands to open the restaurant and all the time we are trying to provide inputs to them whenever they need any help. Menu engineering is one of them.
Interviewer: So when you create a brand there are two sides to it, right. One is the left brain process is driven technology driven side which you talked about. The other is the the softer the marketing driven and the perception driven piece. How are you handling both these. You spoke about what you are doing in terms of processes but in terms of branding in terms of marketing in terms of outreach, how is this working.
So I think when you go and eat in a particular outlet it’s obviously the what brand it is and there is an emotional side to it and then of course there is the food side. I think most people, you have to have the food correct for anybody to come back to you. If you don’t have the food correct nothing emotional is gonna help you. Like today if you look at it you know we go to different dhabas because of the fact that the food is the same quality, the same consistency. So we have to do the same. So we in at least in our quick service restaurants, we have a niche base. Everything is cooked in a particular place and then sent it out to different QSRs. So the consistency and the quality remains the same. So the person at the outlet works like a McDonalds person. So you know if suppose a kathi kabab roll is what you made, the the bread is half baked here so they bake it to a full extent. The chicken tikkas are packed in a certain manner and at you know and so many kgs has to be put and places them there. So many rounds of you know mint sauce has to go and so much onion has to go and then how to roll it. So those processes we teach and that’s all he needs to do. So he doesn’t need to be a chef at the outlet. But of course the higher end, like Punjab Grill or Zambar is a chef based. But our recipes are fully recorded and its fed into our ERP like I was saying. So you know all your food cost and all our all monitors through that and the up to the our purchasing downstairs here. You know if someone chicken one butter chicken that goes out of Punjab Grill it knows what to order from back end and what to be replenished for the next month or whatever its case might be.
Interviewer: You have seen the evolution of the entire food retail space, Amit. What are the learnings and what are the trends that you see over there.
See what I see is that people now want a lot more choices. Gone are the days where you know a plain Indian or plain Chinese or plain Italian is going to work. People are looking for different things, quirky things, be it healthy options, be it juices or or salad. People are willing to experiment. People are going out more. So we have to keep up with that the consumer is more younger so they are looking for bargains. They are looking for also more places to go and hang out. So food and drinks have to be very very casual, as compared to the normal heavy you know, Rogan josh and roti. So you know we also you know developing those kind of concepts where it’s not very heavy on the stomach. They are more wanting to hang out, have a small snack, have a drink, chat with people. So those are the trends which I am seeing. People are looking at like the Parsi cuisine or a Bengali cuisine. They are willing to try Korean. They are willing to you know try all these kind of different things because they are going out more and they are you know bored of going to the you know kind of same places again. They want to try all new things.
Interviewer: So how is technology changing a lot of this. Also because the the most exciting thing around the start up community seems to be the whole app thing, right, of being able to order on the go etc. How do you see technology changing the way food retail is done as a business.
See I think where technology is paying a playing a role in at least our industry is you know how to make it convenient for a customer. A customer does not have time or they want everything, everything has to be instant gratification for you know now kids. So what is happening is that you know is that all Zomatos or Food Panda, everybody today, before they go to any restaurant reads about it, reads the best dishes, reads the remarks and then goes to a restaurant and a lot of times they don’t go if the review is bad. So technology there is playing a lot for making a choice of where they are going. Secondly on the food delivery side. Today our food delivery in my my company is hardly two to three percent of my top line. I feel we can go up to fifteen twenty percent, because the the point is you know we have so much assets which we have invested into and if you have to really bleed the asset and this food delivery can really make it do that and people want food at any point of time and it’s not only lunch and dinner. So from that point of view technology plays a big role, because there are you know websites you just go and you have every menu and so on and you know on that and all you have to do is deliver from our different outlets or commissary whatever the case might be. So that’s how technology is playing in in our industry.
Interviewer: In a day you are touching so many people, are you also looking at data analytics and data mining to understand trends to see what are the fast moving products and and work your menu according to that and what what role does data play in that then.
No, data plays a huge role for us. There is always an eighty twenty analysis you know and we always skull out the you know twenty percent of the products which are not selling and replace with new and as I go back to the SAP and you know through the SAP we get a lot of analysis done. You know we get different reports come out. We analyse you know our spaces by you know how much rupees per square feet we sell. So we can actually see each and every outlet and what is doing what is our benchmark and what it should be because there is rent involved in it, because as the highest percentage of our cost, which is the end. So we have to analyse all that. Plus what is selling what is not selling what is the highest selling items in one outlet may not be there in the second outlet. So you have to recheck the menus also. So like you have done like in Singapore, there’s more sea food which sells so we have actually enhanced the sea food varieties in into Singapore. Our Bombay our Juhu outlets do more vegetarian food, so we have again done that more vegetarian as compared to non-veg in our Punjab Grill. So those things we keep on doing.
Interviewer: Amit you know this kind of explosion in not just the scale of business but also the layering of technology of the kind of intelligence that is required what pressure has it put at the talent development level. Because you would be needing a lot of different skill sets to be able to manage this.
Yeah, actually I was also counter plating to may be put a you know a small school of you know like a counter the block kinda thing where we can develop chef, we can actually develop people who will serve. Because its very very difficult to get people like that. You know of course more more mostly what happens is people are are coaching from each other.
Interviewer: So what is a technology requirement for something like this.
So I think there is an issue in the FNB industry and am sure there is an issue in a lot of the other industries, because we don’t get talented people in back of the house, we don’t get talented people in front of the house and we are looking at people who are you know getting into skill development and we are working with different schools also to see how we can you know help them get people what we require. So we are working with different schools but it’s a difficult job. You know I wish somebody was there out there who would do something like this.
Interviewer: So when you are looking at this expansion and I know you are expanding very rapidly, Amit, how are you dealing with it. Do you have massive training programs. How raw is the input right now in terms of talent.
We have a good training program the input which we get is mostly eighty percent would be from you know the industry coaching here and there but there is twenty percent which is coming through which is raw and there are lot of inputs to be given to them in terms of grooming, in terms of how to talk to customers, in terms of upscale, up selling as such. So all our training programs are in house and we use other agencies from outside also to help us. We have a full training room upstairs which we use for training at different levels.
Interviewer: In terms of reskilling and skilling as as outlets become bigger and as staff need to go up the management scale. What is the role of online education because upgrad is doing a lot of work on online. What is the role that online education can play?
It can play a huge role if we we had something like that you know I would use it all the time, because it’s so much easier than having you know having training done during our work hours. Because people can get trained also in their off hour in terms of going through and becoming better to get a better salary and to go higher up the value chain as such. I mean online would work very well for us as such.
Interviewer: How ready are the existing courses in catering colleges etc, to the new challenges of not just you know managing the FNB but really managing systems, technologies, data and management of of you know administrative work. I mean how equipped are the current lot that are coming out of colleges?
I think it’s got to need a a lot to be desired I think. They are coming out but the you know the way they the whole environment is changing that by the time they come out in six months and everything has changed and you know how the industry is changing, ecommerce is happening. So from our point of view it has to be kept on going training training training. So it’s not that you finish your normal degree and then come out and everything for ten years remains the same. So this online training reskilling is a big requirement in all the industries. Not only us.
Interviewer: What about FMCG. Do you see the same constraints over there or is it a little easier in FMCG because its its a older industry and hence far more set in that sense.
FMCG does not require as much as such it is an older industry but then with technology coming in and you know selling through different platforms which is actually giving us also a lot of growth. But FMCG is not that much of a challenge as such. I think it’s more on the sales side and you know the the front end which is always churning. So that you know also again training and reskilling is what we require.
Interviewer: From your own journey, I mean you you you are carry forward carrying forward a legacy which is old because Dabur is one of the oldest family run companies in the country into the fifth generation, I think. What are the challenges that you have faced as you venture out on your own and what has helped you, you know, step out of the shadow and do something on your own. I mean what have been the influences there.
I think when I started foods my father and my uncle were like my mentors and I think it was you know the the attention to detail which I had to go to to put anything up as a proposal in front of them because it was actually worse than a production putting out proposal because I was the first one to be shot down and that made me learn a lot. It made me angry at some point of time but it put that rigger in there to do everything to the end detail, to do put up any proposal. First the team under me would get frustrated because you know they were not seeing things going through and in a new company you are new category, you are trying to create things will go wrong, you don’t you are not getting people who are who are experts in that field. So if I were to find a juice expert I would not find it may be fifteen years ago. So they are also learning. So there was frustration which was happening. But I guess in the long term today you know where we are and my team which had taken from zero to let’s say three fifth then I merged it even today I am in touch with most of them and they still call me and would say look you were the dream and if I were you need us at any point of time we would love to come and work with you. So they also went through the grind. They also learnt with me. We made a lot of mistakes but you know we came out now very very lets say confident to go something to do something new and create a new category and a lot of my people under me have gone in different fields.
Interviewer: So let me ask you this question, which is normally a tough one to ask. What is the one mistake that you have learnt from Amit. Which was a setback and looking back was an important setback to get.
A lot of actually mistakes so one which is because I won’t say a big mistake but when I started juices here you know I was of the mindset i mean from the US that you know there there were no sweetened juices as such. So it was like you know hundred percent orange juice. So when I came here we launched hundred percent orange juice, hundred percent apple, hundred percent pineapple and we saw that the market was not that big and you were like what is going on, you know. This has to it kind of happen and then when you did a lot of research you understood that first of all in Indian wants the sweetened variety, in terms of an orange juice because there is orange European orange or regular orange is too sour for them. So we started sweetening our juice to work on the palette so today if it’s real, is actually eighty five percent juice content and when we did that the market just took off. You know then if you if you know that Tropicana came and made the same same mistake as coming with unsweetened and they actually did not move because you know they US companies and they will not make them make it sweetened. So they kept on going. So they slowly steadily tried creating that category but it won’t grow as big as Real. So Real is about eighty percent of our portfolio active which unsweetened is twenty. So when is when they created that category then we obviously grab it back and jumped into that under active and then they came into I think the sweetened part after ten long years. But I think today we we have about sixty percent of the market share of India in the juice market and its all Real.
Interviewer: If that was a mistake you learnt from, what is the proudest moment that you have had.
Well, very recently you know when I learnt that Real is thousand crores and it’s the first brand out of the Dabur portfolio which is thousand crores. I felt very proud.
Interviewer: That was it, quite a journey, right
Yeah quite a journey.
Interviewer: Ok, I wanna ask you, you know, when you look at what you have done and I think what has always fascinated me about you Amit is that you have gone out of the comfort zone and made a mark on your own in an area where you did a lot of experimentation in. What were the three four traits that helped you succeed. If you have ever looked at what made you succeed.
I have always I think been able to identify a niche, a category, which is not been you know explored and then you know do a little bit of research behind it and see that this category can be big and then you put all your efforts and resources behind it. So there’s a lot of passion. Team work I think what you need is a team which believes in your dream, no matter how a stupid it can seem to start with. But they see yes there is something it may happen and then you know all you have to do is, if you empower your team, they can create wonders. After you empower your team, your team is working, all you have to be is the catalyst. That means you just see that they don’t fail. So you try and then all your work is only to see nobody fails in your team.
Interviewer: Who are the people you admire? Who you have learnt from? Both as an individual and in terms of business.
See, I would say again my father, Mr. Late Mr. G.C. Burman, my uncle also, because you know they from made me a small company as Dabur from what it was, from an ayurvedic company how they created it into an FMCG company. The vision being very simple being you know dedicated to the health and well being of every household and how they created products from you know ayurvedic choorans and all and today what you see the Vatikas and now we are getting into skin care and home care. So you know I learnt a lot from them that how somethings can transform from a rural brand to an urban brand. How they have changed the you know target audiences also. So there are a lot of products for the older audience, but there’s lot for the youth. So I have learnt a lot from from them.
Interviewer: You know, there is always criticism about India saying that you have not created a great brand, but Dabur, I think, Dabur, Amul these are brands that India can be proud of. What goes into creating a brand. What are the three four metrics that you need to get right you think to create a compelling brand?
See a brand is always made when people come back for the same. So you have to be honest with people I think. You have to be with yourself, honest with all the product you are giving. So its its not that you wanna sell it once and you run away, if you want to build a brand. So if you are honest and you are building a brand what and you are building a product category for people want and there is a need gap there and you price it right, then that’s where you are probably able to build a brand.
Interviewer: What’s your advice to youngsters Amit? Two categories of youngsters, youngsters who want to get into the FNB space and you, I want to ask you this in three forms. So the first one is youngsters who want to get into it and want to look at it as a compelling opportunity, a career opportunity, what would your advice be?
I think if you do a lot of research in this, I I know when I started and I used to think a lot of youngsters, a lot of people want to own a restaurant. Now thing is that it looks very good from outside, inside its tough job. You know because everybody feels I wanna have a restaurant, I have my friends coming and having a drink with me, eating with me and have a party and so on and so forth. That’s the way I started it and but you you learn very quickly that that’s not the our target audience. If you want to appeal to a bigger audience you have to create a product which the normal, the consumer is your target audience wants and you have to do a lot of research and what your target audience want. You can’t think of yourself and make a product. You have to think of what everybody else wants. So first of all just doing a lot of research behind what you are trying to sell and of course you have to have you know the passion to then take it through. You will make mistakes, you will there will be lots of hurdles but then you have to keep on going and see and perfect that product or experience.
Interviewer: The second piece is for youngsters who are a part of family owned businesses and who have to earn their spurs because you know if you are the vice chairman of Dabur you have earned your spurs and you have not really been so dependent on on the legacy of Dabur to take you forward. You have you actually got a great mix of two. So what would your advice be to youngsters from family owned businesses?
I think first a family owned business has to tell somebody that look you have to go and create something on your own, we are behind you. If if they let you in the company then you would probably never because you know that’s in your comfort zone. First you have to be out of the comfort zone. So I think from our family point of view that was very good in terms of you know all of them saying that look we are the fifth generation business. It is more important for us to stay as a family. Business is different, management you know and family is different and let’s run a business and not that our family has to be there around the business. That was a very important step we took to professionalise it and once that happened we all out of our comfort zone. So we all went out to create our own businesses, to be in categories where we wanted to. So that’s very important to start with. Secondly of course you have to have the drive the passion to go ahead and work towards what your you think is the right goal which you want to achieve.
Interviewer: The last piece is you know as an entrepreneur you have seen your father’s generation as an entrepreneur you have seen yours and you have also seen a whole bunch of new entrepreneurs Amit who are coming in, the tech driven kind of start up entrepreneurs. What are the lessons that you have learnt and what are the what is your advice to young entrepreneurs?
I think our our father’s I think generation was risk averse, we are my generation is a little bit more you know good are taking more risks and the next generation which is the tech one is taking huge risks because I think you know right now a lot of action is happening in ecommerce and so on and so forth. Lot of money is growing into ecommerce and I wish I was there somewhere because you know the kind of money they are getting. So I think it’s the question of risk and return. So higher risk you take and and you do it well, I think the return is higher.
Interviewer: And opportunity of course, because India is suddenly becoming the hotbed of opportunity. Now opportunity that your parent’s generation did not possibly see in that context.
Exactly, exactly, I agree.
Interviewer: Last question, a message for upgrad and what they are doing on the online side. How how significant can it be overall and what would your message to upgrad be.
For me, upgrad is it would be something which every industry will have to use. We all need skilled people and coming out of institution towards a company may be FMCG or FNB, you need a little bit of sharpening up your skills and again it’s the online training which you require, I think it will be if it’s done well it’s a good project. If it’s done well I think it will do fabulously and all industry will require it.
Interviewer: Thanks Amit
Thank you very much.
Interviewer: That was great Amit, thank you so much