Ease of doing business is not a consideration even today: Anjan Chatterjee

Speciality Restaurants' Anjan Chatterjee on liberalisation, scaling brands, competition and the challenges confronting India's restaurant industry

From a tiny Mumbai restaurant without even a washroom to a pan-Indian dining chain with some of the most recognisable restaurant brands, Speciality Restaurants’ journey mirrors the changing face of India’s consumption story. The story began in 1992 when Anjan Chatterjee founded Only Fish, and grew into a multi-brand dining company with a network of 118 restaurants and confectioneries. Mainland China and Oh! Calcutta became among its best-known brands, while Chourangi took Bengali cuisine to London. In a virtual interview, Chatterjee, the Founder, Chairman and Managing Director (CMD) of Speciality Restaurants, speaks to Ishita Ayan Dutt about the journey spanning liberalisation, the emergence of organised dining, an increasingly competitive market, and the challenges facing the industry. Edited excerpts: 

 

Speciality Restaurants began in 1992, just after liberalisation, with Only Fish in Mumbai. Did liberalisation create a new kind of consumer and a new opportunity for organised restaurant businesses like yours?

 

There was no immediate correlation between the launch of Only Fish and liberalisation. At the time, I was primarily focused on the advertising business, which taught us a lot, because we were handling many FMCG (fast-moving consumer goods) brands. Only Fish was more of a passion project — a tiny little restaurant without even a washroom.

 

But once Manmohan Singh opened up the economy, we could see that people were euphoric. And I realised that the food and beverage sector would grow.

 

Nothing much was happening in the standalone restaurant scene then. So, I saw an opportunity — people were earning more money; they were becoming more discerning. You didn’t have to count dollars while travelling, and people were travelling internationally.

 

So we incubated Only Fish for two years. But it was a niche within a niche, and we repositioned it as Oh! Calcutta. The rest is history. We opened Mainland China in 1994.

 

With liberalisation, banks started recognising the restaurant business. By 1994, I got a loan from the bank and expanded my business with promoters’ money and bank debt.

 

The first Mainland China was in Mumbai?

 

Yes. In between, we did Mostly Kebabs as well, which was eventually shut. Then there was Just Biryani. So we were playing around.

 

But I understood the potential of Chinese — it’s the most popular foreign cuisine in the world, even today. If you go to Australia, Canada, England or any part of the world, there are Chinese restaurants galore because of the fact that you have a Chinese colony. And I’m a pure Bengali, so Hakka Noodle and Chilli Chicken are comfort food for me.

 

So, we borrowed money, and went to a place called Saki Naka in Mumbai and that’s where we opened the first Mainland China. It was risky because we didn’t have enough money to pay the rent.

 

Then we went to Bangalore (now Bengaluru) because I wanted to make it a multi-location business. That was the litmus test: Could we replicate the same food? Scalability was the most important thing. Then the journey began. After about two to two-and-a-half years in Bengaluru, we went to Hyderabad and then Kolkata soon after, in 2000.

 

Restaurant businesses have traditionally had to navigate a maze of licences and regulations. What was the licensing process when you started out in the early 1990s, and how much has that environment changed?

 

At that point in time, a lot of people didn’t know about the licensing requirements, except for the BMC (Brihanmumbai Municipal Corporation) licence, which you need for any food outlet in Mumbai (then Bombay).

 

But the process continues to be draconian even today. From excise to FSSAI (Food Safety and Standards Authority of India), you need around 31 licences even today. We fought a battle with the Government of India, during the Congress government and later with the Bharatiya Janata Party (BJP), saying that there should be single-window clearance.

 

The environment then was perhaps a little more complicated because one didn’t know how to go about it. I didn’t have the wherewithal or the experience. But ease of doing business is not a consideration even today. It continues to be a headache and a kind of rigmarole. We have a department of four people handling this in every city, just to manage and ensure that we get the licences on time.

 

Beyond licences, what are the biggest challenges today, and how do they compare with what you faced when you started out?

 

Those were the days when it was a sunrise industry, standalone restaurants in particular. We could get skilled manpower from any part of the country. Today, my expansion stops for want of skilled manpower.

 

The cost of real estate is also a big barrier. That’s why a lot of people are not entering through the brick-and-mortar route. They are starting with a small cloud kitchen and, once it is successful and the brand resonates with the consumers, they go and start a brick-and-mortar outlet. That’s largely because it’s impossible to get the right real estate at the right price.

 

Then, restaurants don’t get input tax credit on GST (goods and services tax) paid. That is one of the biggest deterrents to the growth of the restaurant industry. I would ask the government to reconsider this. We are generating so much employment. 

 

What gave you the confidence to take a restaurant company public in 2012? 

 

We had raised money from private equity — SAIF Partners — and there was a five-year timeframe within which we had to take the company public. So, there was a compulsion.

 

At the same time, I wanted to build a well-governed company. Bengalis are not known for entrepreneurship. Wearing your wealth was never the objective. The idea was to build an institution that would continue for at least two or three generations.

 

In my generation, it has run for 35 years. I would like my son, Avik, to be able to take it forward for another 30 years. The rest is left to God.

 

Once you are a public company, you have to be very well governed. So, we got S M Datta as the chairman. He was there for 13 long years, and we learnt so much from him.

 

India’s consumption story in the last two to three decades has changed dramatically. But so has the competitive landscape…

 

When we started in 1992, nothing was happening — there was no Pizza Hut, no Domino’s. I’m just talking about fast food. In Kolkata, Gurusaday Road, where we set up Mainland China (in 2000), was a destination. So, we were doing business like a rockstar.

 

Over a period of time, we understood that the competition was not just Chinese versus Chinese, but also with different cuisines.

 

Competition was very tough, but we kept building the brands, and that is paying off. People recognised that we are a brand. And a brand is faith. I always say religion and God are the biggest brands in the world, and they continue because you have faith. Developing that faith takes time. It’s not an overnight story.

 

And in spite of the competition, even though we’ve gone through a lot of ups and downs with share prices and profitability, there are two principles I live by: Even today, we are debt-free. The other competitive edge is innovation. You have to continue to be relevant.

 

My father used to say that to be the king of the jungle, you have to kill every day. You just can’t sit back and relax.