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Kaati Zone's USP: Healthy Indian food in contemporary, non-messy style
Monday, 26 November, 2012, 08 : 00 AM [IST]
Akshay Kalbag, Mumbai
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A majority of the outlets of Kaati Zone, an Indian fast-food chain, is based in Bangalore, and the chain is now aiming at becoming a national brand in the quick service restaurant (QSR) category with an Indian menu.

It offers wholesome, hygienic food and addresses the needs of customers at various locales that they frequent on a day-to-day basis, such as malls, high streets, airports, corporate parks and the campuses of educational institutions.

Kaati Zone was incepted in 2004 in Bangalore, home to a young population, a sizeable chunk of which works in the information technology (IT) industry. The chain has been backed by international venture capital firms.

As of now, Kaati Zone has 32 retail outlets in six cities across the southern and western regions of India, and wants to chalk out aggressive plans for the expansion of its retail network through the franchisee model.

The chain offers a range of kaati rolls with paranthas and a variety of vegetarian and non-vegetarian fillings, and plans to add Jain options to its portfolio soon. The company's offerings are healthy and include such options as whole-wheat paranthas.

The product is packaged in a proprietary paper pack which makes it convenient for consumption on the move. Kaati Zone was recently recognised as one of the eight recommended foreign fast food chains in terms of taste by Budget Travel, an e-publication.

CEOspeak

Kiran Nadkarni, chief executive officer, Kaati Zone, explained the brand's philosophy and remarked that the fact that most of the chain's outlets are located in Bangalore is justified, giving reasons for the same.

“Bangalore was an obvious choice for the launch of Kaati Zone because of its cosmopolitan nature. The city represents an ideal test market for the launch of a new consumer product or service venture,” he said.

“The chain offers Indian food in a contemporary style – non-messy, easy-to-go, healthy and wholesome. Our food is targeted at young, upwardly-mobile Indians. We currently have 32 outlets, and six more are slated for a launch in the coming two or three months,” Nadkarni said.

Nadkarni, a veteran in the world of franchising, shared a few tips with those desirous of being franchisees in the QSR space. “For any individual, signing a franchise with a credible brand is obviously a great way to turn entrepreneur,” he said.

“The rewards of entrepreneurship can be far greater than the steady income from an employment. However, not only must the individual choose the franchise well, but also display such traits as commitment, hard work and perseverance,” said Nadkarni.

He said there are ups and downs in a business and the individual must appreciate the inherent risky nature of any business. He must therefore avoid frivolous spending and manage operations tightly, staying focussed on cash and keeping spare capital to tide over the difficult times.

“The chain's current menu predominantly comprises kaati rolls, a popular street food in the northern and eastern states of the country. It is basically a improvised meal – some sort of filling wrapped inside a parantha,” Nadkarni said.

“Over the years, it has become a staple food across the country and doesn't require too many changes to suit a region's palate. However, Kaati Zone will attempt to make regional cuisines as the fillings and popularise the same,” he said.

Obviously aware of the difference promotional activities can make to a brand, Nadkarni said not only does Kaati Zone cater directly to collegians and young corporates through a chain of outlets, but also has numerous brand-building initiatives in place as well.

“These include both above-the-line and below-the-line activities. We use FM radio stations, the print media, hoarding, online and social media marketing campaigns, in-store activities and of course events to create awareness about the chain,” he said.

Commenting on the Indian organised QSR sector, Nadkarni said, “It is in a nascent stage and there is a huge potential for it to grow. Right now, the organised segment addresses less than 10 per cent of the overall QSR market and has tapped only the major cities in India.”

“With the growth of the middle-class, two-income families, longer commutes to work in urban India and longer working hours, the propensity to eat out is growing. QSR offers value-for-money food and will therefore be largest segment of the eating-out market,” he said.

Nadkarni said, “Till now, the organised QSR space in India was dominated by international concepts in food brought the country by multinational corporations. Now a number of home-grown companies like ours are making forays into the market.”

“We expect that the Indian players will become major players and in the next decade, Indian QSR concepts will well and truly have found their place in the sun alongside the international brands,” he added.

Before signing off, Nadkarni also offered a few more tips and suggestions to new players who wish to explore the option of a foray into the quick service restaurant space in India. “QSR ventures are built over decades, not in a matter of a few years,” he said.

His first piece of advice was about the outlay. He said, “There is a substantial investment involved in the initial phase to establish scalability of the concept before a company starts significant expansion.”

“Due to the unique nature of the industry, the entrepreneurs attempting to build QSR businesses will require to source substantial initial capital from family, friends and angels who have a long-term belief in the venture,” he said.

Nadkarni, a noted venture capitalist, said, “The conventional capital from venture capital and private equity (PE) firms will normally not be available till the business has achieved a certain scale.”
 
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