Saturday, November 2, 2013

Indian Consumers - Packing Matters!!

Nivedita Jayaram Pawar
"My family was flabbergasted when I told them I wanted to sell vada paav with my MBA degree," laughs Dheeraj Gupta. But his dream paid off and it's the young entrepreneur who is laughing all the way to the bank. Gupta is the owner of the Jumboking brand of vada paav in India and is now on the verge of opening his 54th outlet.
But becoming the 'king' of vada paav wasn't a cake walk. Hailing from a business family, it was a foregone conclusion that Gupta would become a businessman. Soon after he acquired an MBA degree from a Pune institute, he decided to brand Indian mithai overseas. Unfortunately, the idea didn't catch on and Gupta learnt an expensive lesson.
Big Bite
Then, he ran into a franchisee of Burger King while on a trip to London and he figured he would take another bite out of the food business. "I was reading up on entrepreneurship and was particularly inspired by a book on the founder of McDonald's," recalls Mumbai-based Gupta.
 
So he decided to promote the vada paav as the Indian equivalent of the burger and set about researching the market. "Mumbai and Thane consume over 2 million vada paavs every day. At a market price of Rs 10 apiece, that's a market of over Rs 700 crore per annum in these two cities alone. It is a very large but unorganised market, and this is where branding the vada paav as 'Jumboking' came in," Gupta reveals. He figured that branding the product and serving it in a hygienic setting, with a transparent kitchen and stainless steel equipment would do the trick. It didn't.
With Rs 2 lakh borrowed from his father and a spot near Malad railway station which belonged to the family, Gupta took the plunge in 2001. He operated the outlet with his wife and four employees, but in the first six months, experienced a turnover of only Rs 3,000-4,000 a day. "It was very frustrating as we were unable to convince customers that we were hygienic and different," remembers Gupta.
Second Time Lucky
Not one to give up, he decided to have a second go at the vada paav -- this time serving it in a wrapper just like the McDonald's burger it was modelled after. Sales doubled, and Gupta launched his second store in Malad after 18 months and the third one in Andheri. The fourth store became Jumboking's first franchised store and, ever since, the brand has followed the franchise model. Next, Gupta infused further innovations, with automation, wrapping, using round bread, a bigger and flatter vada instead of the traditional round one, and a variety of flavours.
Revenue Model
Jumboking has 53 stores in eight cities including some metros and smaller cities. The company runs a 100-per cent franchise system. Products across all outlets are standardised as as they are manufactured in a central kitchen and transported to the outlets, where the vada paav is assembled using standardised equipment.
Jumboking is essentially a vada paav brand and the product and its variations contribute 80 per cent to the total sales. The balance comes from beverages like colas and lassi. The average spend at a Jumboking store is Rs 25-30 per customer.

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