Mumbai couple turns street snack into big business
Mumbai couple turns street snack into big business
Associated Press, Bombay, India
A young Bombay couple have taken the city's most popular snack -- the lowly potato patty -- and transformed it into a fast-growing business.
Their model is none other than the world's fast-food king - McDonald's.
Reeta and Dheeraj Gupta, founders of the Jumbo King chain, studied a variety of restaurant companies, including McDonald's Corp., before setting up their first potato burger shop outside a suburban Bombay railway station in 2001.
For years, street vendors have been selling vada paus, or potato burgers -- spicy fried potato patties slipped inside a bun -- from handcarts in Bombay.
But the Guptas figured people would line up to eat the burgers from a proper shop where employees wear disposable gloves, ingredients are delivered in refrigerated containers from a central kitchen and spot checks are routine.
Four years later, their investment of 200,000 rupees (US$4,400) has spawned a 16-store chain that in the year through March 2005 had sales of 25 million rupees. This current fiscal year, they project sales of 80 million rupees.
Doing research over the Internet and poring over management books, the Guptas said McDonald's kept coming out on top in its supply chain management, quality control systems as well as maintaining hygiene in the restaurants.
"McDonald's is like the guru of fast food," Reeta Gupta, 29, the company's director, said in an interview. "Why reinvent the wheel? We've learned from them."
Her husband, Dheeraj, 31, even cleaned and scrubbed trays in a Bombay McDonald's outlet for a week to get an inside look at how the restaurant operated. In talking with employees, he found that many stayed with the company because of its regular system of promotions that allowed cleaners to eventually become managers.
Jumbo King does not compete directly with McDonald's, which opened its first restaurants in India in 1996 -- the first of the chain's outlets in the world with no beef on the menu because cows are sacred to India's Hindu majority.
With McDonald's basic potato and chicken burgers priced at 20 rupees (about 45 U.S. cents) and up, the Golden Arches remain out of reach for most of India's 1 billion people, 80 percent of whom are estimated to live on less than $2 a day.
That's where the Guptas saw an opening to attract the masses by offering the cheap and popular potato patties from clean, well-stocked restaurants.
"We're targeting another set of people -- I'm concentrating on my 5 rupee customer, the common man," Reeta said.
A standard spicy Jumbo King potato burger with an onion slice and garlic sauce costs 5 rupees (11 U.S. cents). For a little extra, customers can have theirs on brown bread or with cheese. Garlic powder and tamarind chutney are thrown in for free.
To keep overhead down, Jumbo King's stores aren't air- conditioned and there are no seats. Customers also have to listen to loud ads blared over speakers: "Bring your family along. Eat Jumbo King -- the king of vada paus!"
The Guptas' formula has proved remarkably popular, and Jumbo King's yellow and blue signs topped with a perky crown now command loyalty in Bombay, India's financial capital.
But nutritionists warn that Jumbo King, like McDonald's, isn't exactly healthy food.
"This sort of food takes energy from the body instead of supplying energy," said Vijaya Venkat, who runs a popular Health Awareness Center in Bombay that conducts workshops on organic and natural food.
"Given a choice, people should eat fresh food like fruits and vegetables. All fried food is obnoxious food," she says. "Frying kills nutrition and makes it a foodless food."
Still, some 35,000 people each day pack into the chain's outlets, all located outside Bombay's railway stations. Among their most loyal customers are laborers who earn 40 rupees (85 U.S. cents) a day, hip college students and even business executives who send their chafferers to pick up bags bursting with burgers.