The Hindu Business Line : Kaati’s ready to roll

One of the most time-tested foods in the country has got branded. For many, the kaati roll or the paratha roll has been on the menu as a meal at least four times a week, if not more. “As the chapatti roll or the paratha roll also doubles up as ‘food on the go,’ we chose Kolkata’s popular street food item, the kaati roll, as our main offering,” says Parag Dutta, COO, East West Ethnic Foods, the company that owns the Kaati Zone brand.

Kaati Zone, which kicked off its first outlet in Bangalore almost five years ago, is planning to go national now. The only Indian brand in the Rs 2,500-crore pizza-dominated quick service market (QSR) in the country, Kaati Zone does not carry the negativity associated with fast foods (deemed to be junk) because the “chapatti roll is time-tested in the country”, explains Dutta.

With 12 outlets in Bangalore and two more to be launched in Mumbai soon, Kaati Zone will travel much faster now than it did for the five years since its launch. To be successful a brand has to be built for five years before going into full swing, says Kiran Nadkarni, CEO of the company, and one of the primary investors. “A strong back end is what is required for a QSR before it goes into expansion mode. Try and go too fast and you’ll collapse,” he says. Accel Partners India and Draper Investment Company LLC are among other investors that have a stake in the venture.

Also, now that five years have gone by, the founders believe the company is at an inflection point. “With 12 outlets already up and running, the growth would be modular now,” explains Dutta. Having proved the concept in one city, the company will even now reach for the low-hanging fruit - the outlets in the metros; Mumbai, Chennai and Hyderabad for now. By 2012, when Kaati Zone expects to be a 100-outlet company, the brand would be seen in Tier 2 towns, according to Dutta. There would also be a change in the business model with almost 49 per cent of the outlets being franchise stores. The longer-term plan is to have 250 stores in five years. The promoters are also in talks with several venture capital firms to raise capital of Rs 15 crore. “We have short-listed a few firms that we believe will add value to our business and are in dialogue with them,” says Nadkarni.

Currently, Kaati Zone is present in three formats in Bangalore - dine-in (high street), delivery (residential locations) and express (in tech parks and airports).

The promoters are also excited about the fourth offering that they plan to launch at the end of the month: Mobile vans that would cater to crowds at music concerts, cricket matches, corporate events and picnics and college fests. “It’s not just transporting food, we will also make the food and dispense it from the van. It would be a restaurant on the move,” says Nadkarni.

“It is not by design that we have shied away from a presence in the malls,” clarifies Dutta, adding that now that the rentals have stabilised, they are looking at malls as part of their expansion plans. Ditto with highway outlets, says Nadkarni, pointing out that the hard infrastructure such as freeways have to be in place first before the soft infrastructure follows.

Though the kaati roll is the main product offering of this QSR, the menu is complemented with rice, desserts and combination offers, plus adding new flavours to the fillings all the time. “Unlike pizzas or burgers, people consider kaati rolls a wholesome meal because they have been eating some form of it at home. Therefore, customers consider this a meal option and come here twice or thrice a week.

To ensure that they do not get bored, we have to keep giving them new flavours frequently,” explains Dutta. Though there would be innovations around the kaati roll, there would be no brand extensions for now, he adds.

But how is the brand fighting the image of a QSR offering ‘junk food’? “I think a paratha-based item is not considered junk in India. In fact, that’s one of the advantages we have as a brand. Also, we offer light and diet options with atta and refined flour parathas,” says Dutta. Also, QSRs cannot be like restaurants, they cannot afford to complicate the offerings because of the centrally managed supply chain.

Global players (master franchisees) too have evinced enough interest in the brand to take it to other countries, but the promoters believe it is too premature for this. “We’ll do it in the next 3-5 years, maybe take it to one international geography where Indian food is popular and then look at others.”

With Kaati Zone outlets recording about 40 per cent same store growth in Bangalore during 2008-09 and the Mumbai outlets opening in the next one month, the brand is now on a roll.

More Stories on : Brands | Retailing | Hotels

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
‘Mobile, TV are life enhancers’

Follow the protocol

Where brands matter, and don’t

Do you have a brandvocate?

Kaati’s ready to roll

Brushing up Brand Babu

Space for new activities with ‘must stops’

Pulse of polls

Tracking is worth the expense