'The market has reached that point where burger is not a vada pav anymore'
26 Jan 2015

Californian burger chain Carl’s Jr, popular for its char-broiled burger, is all set to enter Indian market. After extensive research, which included numerous studies and surveys, the premium burger chain has announced its debut with 100 stores in first phase of India operation.

CKE Restaurants Holdings- parent company of Carl’s Jr. has assigned the task to food and restaurant arm of Cybiz Corp., Cybiz BrightStar Restaurants Pvt. Ltd. Known for its popular campaigns, the chain is planning something big and bold for Indian market too. In an exclusive interview with India Hospitality Review,  Sam Chopra, Chairman and Founder and Sana Chopra, Director, Cybiz BrightStar Restaurants Pvt. Ltd talk about exclusive placement of Carl’s Jr., its scope and potential in Indian market. Excerpts:

Why did Cybiz BrightStar decide to bring Carl’s Jr. to India now? Do you think this is an opportune moment to get into the burger market?

Sam: There is always a perfect time, and the perfect time is always the time which is called ‘now’. But having said that, Carl’s Jr. has been flirting with India for the last five years. In the first two years, we found that the market is not fully ready to convert into a burger market. For the last three years we have been closely monitoring it and we set our sights saying that we will set it up and we could have entered India three years ago. But we were cautious as to when to announce.  We have been in this market; Carl’s Jr. global has done various market surveys and studies on India culture. It takes time for any company to enter a new country. One needs to do country appreciation. This has taken its share of time. Post that we have done 5-6 market surveys, when we started menu engineering because we had to do a lot of changes.

 I believe that the time for burgers has arrived. Over a period of time there is a hype of various foods that come into the market. Burgers are the new pizzas. It is a process which a lot of people started and by word of mouth a number of burger chains have been saying that they are looking to enter the market. Now burgers are being looked upon as ultra modern, young, aggressive, fast food which is both healthy and filling, which is unlike what it was in the past.

Sana: I think for us, especially for a gourmet burger, the market has reached that point where it is not a vada pav anymore. It is actually a burger. It’s a full meal and people are willing to shell out a little more money for a premium burger and a premium experience.

Do you do this kind of extensive research before entering any new market?

Sam: Yes. It is normally done. It is more extensive in markets which pose particular challenges. As you are aware most of the burger chains in the world don’t have a vegetarian variety. So India has its own very strong challenges because 70% of menu is non-compliant for many Indian customers; for example, a beef burger can’t be served here.

Apart from the huge base of vegetarians in India, what else did your market research focus on?

Sana: What we have done apart from conducting online surveys is consumer research where consumers actually got firsthand experience of our products. We made them try it. For example, the most recent one was in November when we did a survey with real consumers who were invited in batches of 100. They came everyday for over a week to try different sauces, patties and buns and we got their feedback to understand what they like and what they don’t.

We even asked them in terms of what kind of veggies they like. For example, one of our USPs is going to be honey oat bread, which a lot of people haven’t tried. Even our burgers will be customized for people. So when they come to the order counter, they can actually order their choice of burger, patty or veggie for that matter. Something like- make your own burger.

We will continue educating people, to the level of specifying, say, what part of chicken the patty contains.

Our USP is also char-broiled or char-grilled burgers; some burger chains have started serving non vegetarian char-broiled burgers, but we will be the first one to do vegetarian char-broiled burgers.

We have done a lot of research in order to master the art of char-grilled vegetarian burger. So, for the first time, India will have a burger chain which will serve such a variety. In fact, it is also the first time this kind of burger will be available anywhere in the world. The parent team is quite happy with the results and is mulling on taking it to other markets, such as the Middle East.

But will there be enough takers for this kind of burger, given the fact that India is not a very mature market and inclination towards healthier options is yet to gain ground?

Sana: Since Indians love fried food, we will obviously serve fried options. Initially people could not even imagine a char-broiled burger. But from our researches we found that people are increasingly opting for healthier substitutes and demanding options.

How are you planning to pitch yourself assuming that Carl’s Jr. already has a brand presence, especially in the imagination of the market segment you are planning to target in India?

Sana: People know what Carl’s Jr. is. They know the sister brand Hardy’s at least. Carl’s Jr. is very famous for its aggressive marketing and campaigns. We are and will be doing aggressive marketing in India as well.

In terms of positioning, we will advertise ourselves as  premium burger chain with premium service, premium quality product and premium ambience, but it will also be a value for money experience.

We feel that you have Red Ocean and Blue Ocean strategy. In Red Ocean, you have a number of burger chains competing against each other. We are going to be in the Blue Ocean category where we don’t think there is anyone we need to compete against right now and nobody is going to come in near future. We are not only going to provide premium burgers but also something that will fit the pocket.

What is the price range you will be introducing (in case you have already planned it)?

Sana: About Rs 250-350. We are still figuring out the final price. Obviously, once the product is ready we will have a closer figure.

We will be serving premium burgers at an affordable price. That’s where we are going to position ourselves.

You have announced 100 stores as you debut in the Indian market. It’s a huge number given that in other countries the number never shot beyond double digits.  

Sana: This was announced keeping in view our kind of population and the potential of the market, and with India heading towards a burger revolution. As you mentioned, thanks to McDonalds early entry, consumers in India at least know what a burger is. Now as they are growing from Tier-I to Tier-II and III cities, we see a market in Tier-I city and eventually in secondary cities also. Why we decided to enter with 100 stores was because we feel that India has the scope for it. A burger will be a meal in itself. With nuclear families now, aspiring middle class and more youth population, we feel there is a demand for that kind of presence in the Indian market.

Having said that, as you know, Carl’s Jr. decided only recently to expand overseas. Keeping that in mind, we are hopeful that the store will increase its number in other markets as well.  

What are some of the locations you are looking at for a Carl’s Jr. store in India.?

Sana: As of now we are clear that we will open our first few stores in Delhi NCR, mainly because sitting here we have a greater control in this region. And as you know we will have company owned stores.

We are looking at bigger markets such as Chandigarh, Mumbai etc. We will be doing North then West and then rest of the country. In terms of locations, we are still in the process of identifying the first few locations. But it’s going to be in high-end streets and malls for sure.  

Please tell us about the operating model of the restaurant in India.

Sana: The stores will be company owned stores. But we have the right to franchise. We are masters in franchising. But for Carl’s Jr. we are not looking at franchising right now because we are quite passionate about it and want to open company owned stores.  However, that doesn’t mean that two or five years down the line we may not be open to the idea. But that would only happen if we give multi-unit stores or trade areas to groom but that will be done only if I feel that someone else has a better control and better skill than us to operate it.

What will be the size of outlets?

Sana: Anything between 2000-3000 square feet. But our sweet spot is 2500 square feet.

Capacity will vary from 50-100 depending on licensing issues and location. We do not want to compromise on the ambience and the signature Californian experience. 

Is there anything planned for the launch?

Sana: We are looking at a lot of interesting ideas as to how should we go about launching the first store in India. Our first store will come up in the first or second week of April. We are toying with the idea of having a brand ambassador, free coupons etc. But we are definitely looking at an impactful social media buzz.

 A lot of QSRs have entered the Indian market lately and they have done interesting stuff. We are looking at a unique idea. We will do a big bang launch definitely. We want to see a five- hour waiting to enter the store definitely.

Your reflections on how burger is perceived among us Indians

Sam: Over the years, consumers have become affluent and aware. A burger can be as innovative as Indian food to the masses, and now there is a demand for a better product. The point is burger is not simply a product; it’s a form of eating food. In American food, there is a patty, bun and fries. There can be a number of burgers depending on the placement and composition of ingredients. The problem is we keep calling the burger a product. It’s not a product. It’s another form of food. It’s a cuisine in itself.

Given the amount of research you have done and the kind of unique products that you have come up with, what is the point of bringing a foreign brand. Why not develop an indigenous brand here?

Sam: When somebody has spent almost 75 years in building a product, why should I reinvent it? The kind of investment I will need to build a brand, the standard operating procedures, years of management expertise, technology and suppliers support… when I can have all of these coming on a platform at the same time. It’s a very small price to pay to incorporate them. And to add to it, the brand value remains as compared to a homegrown product developed overnight.

Yes, training is an issue. We do not have as many trained professionals. So it is on us to encourage a healthy cross pollination. We will try to contribute in the training process.

How important is ambience in a Quick Service Restaurant setup?

Sam: We would like to mention that the segment we are trying to create is Fast Casual Segment. You get your food as fast as a QSR. But the experience will be that of casual dining. We will be into Premium Fast Casual restaurant segment. We will be like the Starbucks of the burger market.

What are your expectations from the Indian market?

Sam: The year 2015 will be the year of burgers. Some have already set up shop, some others have announced.