NRAI focuses on direct orders from restaurants

The NRAI Townhall 4.0 saw restaurant industry stalwarts such as Riyaaz Amlani, Gauri Devidayal, Chef Manu Chandra, Chef Saransh Goila, and Aseem Grover, among others, discuss the need for robust delivery models and the ways to make it sustainable for all involved.

With delivery services becoming the only source of revenue for restaurants in the current scenario, it has become a crucial business arm for restaurateurs. Industry body, the National Restaurant Association of India (NRAI), organised the NRAI Townhall 4.0 Facebook live event that saw experts and veterans from the restaurant industry come together to discuss the challenges, opportunities and prospects of the delivery business.

Right from the opening statements by NRAI President, Anurag Katriar, the need for direct orders was clear. In the current scenario, with wafer thin margins on delivery and reopening of dining services uncertain for the immediate future, restaurants are hemorrhaging money. But given that deliveries are only likely to grow, even once we’re past the pandemic, the necessity of making the business model profitable is unquestionable. For restaurants though, the delivery model has been a bit of a hit and miss. While there are players who have established their own logistics and developed a robust delivery system years before aggregator platforms entered the market, many, especially small restaurants have been wary of undertaking this exercise.

The other stalwarts at the discussion included Riyaaz Amlani of Impresario Handmade Restaurants, Gauri Devidayal of The Table, Thomas Fenn of Mahabelly, Rahul Singh of The Beer Café, Aseem Grover of Big Chill Café, Chef Manu Chandra of Monkey Bar, Fatty Bao and Toast & Tonic, Pratik Pota of Jubilant FoodWorks, Saransh Goila of Goila Butter Chicken and Yash Bhanage of Hunger Inc.

A significant point that came across from many of the panelists was that the solution the restaurant industry needs to look for is an alternative to the aggregator model and not a replacement. Aggregators, after all, have secured funding, invested years into their platform and have a lot of marketing muscle. Many smaller players, in fact, have relied heavily on them, especially through difficult periods such as the lockdown. But what needs to happen is an evolution of how the aggregator business model functions.

One of the biggest challenges of the aggregator model of delivery is that restaurants don’t have access to the data of customers. This makes it extremely difficult to understand and connect with the customer, which is the crux of the hospitality sector.

Customer relationship management is after all one of the most crucial aspects of any business. The need of the hour for restaurants is to re-establish a direct connect with customers.

The other advantage of direct connect with the customer base is in the fact that average value for direct orders is always higher. One of the prime ways aggregators drive traffic on their platforms is through discounts, which takes the focus away from the biggest selling point of any restaurant, that is its product. A loyal customer base is more focused on the quality and trust they associate with a particular brand rather than discounts, which is something that restaurants are happy to offer for direct orders, since there’s no commission to be paid to aggregators on such orders.

 A few numbers presented during the discussion also shed light on the F&B industry in India. Food consumption in India comprises 25 per cent of the GDP, in which food services (worth Rs 4.2 lakh crore currently), contributes just 10 per cent. Of the total number of Indian restaurants, around 25 lakh, only 1.5 lakh offer delivery services, with aggregators accounting for just 6 per cent of the total food services market.

Platforms such as DotPe, Thrive and Peppo are emerging as tools for restaurants which want to stay away from mainstream aggregators. And this perhaps will be one of the ways in which restaurants start to regain control over their delivery businesses. For those who are interested in learning more on how to build a delivery model and sustain it, NRAI has organised virtual bootcamps next week, from May 11 to 13.

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