DARE - Because Entrepreneurs Do

Providing lunch packets to office-goers makes good business sense. Go ahead and grab a slice of the pie

If the way to a man’s heart is through his stomach, then Vinamra Pandiya and Ashwani Rathore have managed to win more hearts than one.

The 26-year-old founders of Pune-based Mom’s Kitchen, a packaged meal startup, gave up their successful careers in IT companies last year to take the plunge in the fast-growing packaged meals business.

The idea didn’t come as a flash to Pandiya and Rathore but grew out of the disillusionment that came with the poor quality of food both at their professional college and at the firms they worked thereafter. A small sum of Rs 5 lakh was all that the duo could infuse into Mom’s Kitchen. A year later, the Pune-based company has clocked a turnover of Rs 70 lakh, and the entrepreneurs are now eyeing Rs 1 crore by early this year. With Reliance and Tata on their list of clients, Mom’s Kitchen delivers 1,000 tiffins a day from 11 a year ago.

The Market
Changing lifestyles and longer working hours have led to the sharp growth of the packed foods and ready-to-eat (RTE) meals business in the country. The ACNielsen Global Online Consumer Survey, conducted with 22,000 Internet users across 41 countries, found that globally, 65% of the world’s online consumers purchase RTE meals, with Asia Pacific topping the list at 72%. The survey also found that 63% of Indians cited ‘convenience’ as their main reason for buying RTE meals, signifying the arrival of these new-age products into the modern Indian kitchen.

“With our economy growing at a very healthy rate, Indians have less time these days for what were once their regular chores, with cooking proper meals being one of them. Ready-to-Eat meals will continue to gain a bigger share in the market, in answer to the demand for speed and convenience from consumers,” says ACNielsen.

Vinamra Pandiya with Ashwani Rathore Founders, Mom's Kitchen

According to Euromonitor International, the RTE meals segment grew 18% in current value terms in 2007 to reach Rs 1 billion. The research firm estimates that the ready meals sector has the potential to touch Rs 1.6 billion by 2011. Major players include ITC Foods, MTR Foods, Kohinoor, Ethnic Kitchens, etc, with the industry being highly organized.

But offsite food service providers such as Pandiya and Rathore have made the going tough for players in the RTE meals. “Indian consumers prefer freshly cooked food and this poses a threat to the growth of ready meals in the country. A number of food service outlets offer food for various budgets. This will be a hurdle to the growth of ready meals in India,” says Euromonitor.

The offsite food business (also sometimes referred to as corporate meals) has largely been in the unorganized sector in the last five years, with some caterers here and there tying up with neighborhood corporate offices to deliver lunch packets to their employees. However, the sector has been in the news in the last one year, thanks to the growing entrepreneurial initiatives in cities such as Ahmedabad, Mumbai, Gurgaon and Pune.

According to estimates, the contract food and service industry is pegged at Rs 2,600 crore. Of this, the packaged meal market is estimated to be Rs 500 crore, according to an internal research done by Mr Spoonz, a unit of Radhakrishna Hospitality Services (RKHS). Mr Spoonz offers offsite meal solutions to institutional clients. It serves more than 10,000 meals per day.

The Business
The corporate meals business is all about quality and punctuality. “The food has to be hot and should reach office before lunch time,” says Vinamra. This is not all. Any compromise on food quality could cost the business owner dearly because "customers are extremely quality-conscious and want value for money." Another big challenge is to offer variety to keep the customers from getting bored of eating the same food.

Most packaged meal providers prepare food at their kitchen sites and get it transported to their client sites in neatly packed condition or in cambro boxes. Cambro boxes keep the temperature same, and thus the food remains fresh and hygienic.

Hiring and retaining the right kind of employees, who understand the importance of service quality, is also an uphill task. You would certainly not want to change the cook every month!

The price of food packets is fixed depending upon the menu. For example, Tiffin Express’ meal packets range from Rs 40 to Rs 70, and have been named differently – Royal lunch, Executive, King lunch, Badshah.

It also offers Diet lunch to its calorie-conscious customers.

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