Charcoal Eats Expect 5X Growth in Revenues by FY 2020
"In terms of revenues, we have shown growth of almost three times from April 2018 to December 2018, with a revenue run rate of INR 17.5 mn for December 2018 v/s INR 6.0 million in April 2018. Our order numbers have shown a 350 percent growth from April 2018 to December 2018, with approx. 48,000 orders in December 2018, up from 13,600 orders in April 2018," says Anurag Mehrotra, Co-Founder & CEO of Charcoal Eats.
WITH A vision to build an Indian food brand to global standards, Charcoal Eats, an Indian QSR (Quick Service Restaurants) chain offers traditional Indian cuisine with a modern twist. The company offers all-day snacking options at various price points in dine-in, take away and express format. The offerings include a wide array of Biryanis, Rolls, Loaded Fries, Starters, Puff Pizzas, Beverages & Desserts. Present across 12 cities with 40 outlets, the QSR now aims to expand in tier II cities. BW Hotelier spoke to Anurag Mehrotra, Co-Founder & CEO of Charcoal Eats talked about his vision with the company and expansion plans.
Brief us about your business model
We embarked on this journey with a vision to build an Indian food brand to global standards. Our entire business model has been derived from this vision. At the core of our business is the promise of a consistent, high-quality food experience, at affordable prices. To deliver this experience consistently, at scale, we have designed each component of the business to be standardised, process driven, efficient, modular and scalable. Our food philosophy is very clear - we will not serve to guests what we cannot serve to our own children. This is absolutely cast in stone. We achieve this through standardised recipes and processes, hygienic ultra-modern kitchens, use of premium ingredients and strict restriction on any harmful additives such as MSG and food colours. Our chefs are constantly experimenting on ways of bringing more authentic Indian flavours with our signature modern interpretation, to our customers.
The comprehensive menu is designed to offer all-day dining and snacking options, across a wide range of product categories - starters, biryanis, rolls, curries, pizzas, loaded fries, desserts and beverages.
This quality, consistency and range are available to consumers at affordable price points, at our 40 (and growing!) outlets across 12 cities. Customers can enjoy our modern Indian flavours at their convenience – dine-in, takeaway or door delivery. For delivery too, we are present across all leading food delivery platforms in addition to our own website and app. For customers who prefer a human connection to decide and place their order, we have a customer care number where a dedicated team helps customers with their orders.
In line with our vision, our goal is to make our delicious, high-quality food available to consumers across the country. To make this possible, we have created multiple outlet formats - dine-in, express, mini, that allow us to open outlets suitable to specific requirement/ profile of each location. All outlet formats are designed to be capital and resource efficient, enabling quick break-even and profitability at the outlet level. Customer feedback is proactively sought, analysed and actions are taken on the basis of these learnings. Many of our product/ service improvements have been made based on these customer insights, and we continue to listen closely to our customers’ feedback to ensure a world class experience, every time. Charcoal Eats follows a hybrid distribution model, with a mix of the franchise- and company-owned outlets. This mix is currently at 50:50. Our franchise partners are motivated to associate with us due to our obsessive focus on quality and customer delight.
How do you differentiate yourself from other QSR?
We are quite excited at the way the entire food services market, especially the QSR segment, is developing. In addition to the international brands, we have many Indian brands entering this space, adding a dose of excitement. Competition is healthy, with every brand working to create their unique space in the consumer’s mind and growing the overall market. We are a homegrown QSR with a strong quality ethos and set our own standards in our journey to build an Indian brand to global standards. We like to benchmark ourselves against our own stringent yardstick in every aspect of the business, from the food quality, consistency of taste and experience, hygiene, ingredients sourcing, preparation process. This is what sets us apart from the others as a brand. We have also been focussed on efficient utilisation of resources in every aspect of our business. Using this approach we force ourselves to be creative and enterprising in achieving desired results, with relatively lower resource deployment. This approach is now part of our corporate DNA and this is also what helps us provide a low investment business opportunity to our franchise partners looking to set up their dream food business. Another way we are different is in the level of support that we provide to our franchise partners in all aspects of operating their outlets. We are profitable at the store level and our franchise partners are seeing success with us. In three years we have built a solid footprint across 12 cities in India and are now preparing for rapid expansion across the country.
Are you looking for any funding round?
We started as a bootstrapped company and raised the first round in May 2018. Total fund raised is 12.9cr across four rounds of angel, seed and A. In the Pre A Series funding, we have raised INR 50 million from HNI Investors such as Rajesh Ramanathan - Head Global Growth Mondelez, Kush Verma - Asoka Capital, Sanjay Bhandarkar - Rothschild, Amit Gupta - New Quest Capital Partners, Vishesh Shrivastav - Temasek, Sachin Khivasara - Bouyant Capital and Chetan Mehrotra.
We will be doing another round of funding very shortly. The funds raised will be used for expanding into new geographies and increasing coverage in the existing market.
Brief us about your profitability and sales through the number of orders.
Charcoal Eats is currently present with 40 dine-in and express outlets across 12 cities (Mumbai, Navi Mumbai, Thane, Pune, Gurugram, Nashik, Chennai, Gandhinagar, Jamshedpur, Indore, Bengaluru and Jaipur).
A key element of our growth story is the hassle-free, high ROI franchise model for people looking to start their food business. The company takes care of the food, supply chain, marketing, technology and customer care, while the franchise focuses on managing outlet operations and local area marketing. Multiple outlet formats (dine-in, express, mini) allow us to open outlets suitable to a location’s specific requirement/ profile. All Charcoal Eats outlets are designed to be capital and resource efficient, enabling quick break-even and profitability at an outlet level.
In terms of revenues, we have shown growth of almost three times from April 2018 to December 2018, with a revenue run rate of INR 17.5 mn for December 2018 v/s INR 6.0 million in April 2018. Our order numbers have shown a 350 percent growth from April 2018 to December 2018, with approx. 48,000 orders in December 2018, up from 13,600 orders in April 2018. This growth has been driven by two factors - our pivot from a ‘meals only’ to an ‘all-day-dining’ menu and the increase in Charcoal Eats outlets across the country.
What do you expect in 2019, in terms of revenue?
We are quite bullish on our growth both in terms of volumes and revenues across all our outlet formats and locations. 2019 will be the year we accelerate our growth on the foundation we have built for the last three years. We expect a 5X growth in revenues in FY 2020, driven by massive expansion in the number of outlets as well as an evolving menu that offers tremendous value to consumers.
We are increasing our presence in the metros and at the same time, we have started expanding to tier II cities. We are already present in Jaipur, Jamshedpur, Gandhinagar and Indore. We foresee substantial domestic growth coming from tier II cities and have ambitious plans to establish our presence in many more such cities by FY 2020.
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