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Dheeraj Gupta: The vendor of vadas
Arti Sharma |
October 30, 2004
Dheeraj Gupta, 30, could have easily joined his family's well-established business. Instead he decided to do his own thing. Taking inspiration from fast-food burger chain McDonald's, Gupta decided to sell Mumbai's favourite poor man's food as a brand. Three years ago he started Jumbo King, a branded vada pav chain.
Gupta has changed all the rules by introducing automation, packaging, a larger size, different cheese, round bread (otherwise the pav is square) and flat patties instead of round.
From one store outside a suburban local station, today there are seven in the city. And Gupta is looking at franchises across the metropolis. In three to five years time, he wants Mumbai to have 75 Jumbo King outlets. By next year, he wants to double his current turnover of over Rs 1 crore (Rs 10 million).
My grandfather was the real pioneer in our family. He migrated to Mumbai from a village close to Haryana in the '40s and started as a cleaner at a tea stall at a station. He gradually built a business of vending stalls.
Later, my father and uncles took over and built the restaurant and hotel business. I had a very comfortable childhood. Born and brought up in Mumbai, after schooling at Jamnabai Narsee, I did my catering course from the Dadar Catering College and have a management degree from a Pune institute.
I wanted to do something on my own, but related to the food industry, particularly fast-food. At the time, the McDonald's and Pizza Hut had not opened yet, otherwise I would have loved to have worked for them.
After my management degree in 1998, I decided to set up my own business selling packaged Indian sweets. I had an idea that if we could somehow innovate and increase the shelf life of Indian mithai, there was a huge export market waiting to be tapped.
So borrowing Rs 500,000 from my brother, I set up a company called Manali Foods. We tried various things, even set up a research lab to find out how to improve shelf life, but nothing worked. I soon realised the futility of the business model and began to look ahead.
During that time, when we were tapping the export market, I had made a trip to London and stayed with a person who was a Burger King franchisee. That's when I saw how their business worked. Coming back, I happened to come across a book - Behind the Golden Arches - about the person who set up McDonald's. It inspired me tremendously and I decided to follow the same model.
Vada pav was the obvious food choice because Mumbai-ites love it. I borrowed Rs 200,000 from my family and set up an outlet, which the family owned, near Malad station, a Mumbai suburb, and called it Chaat Factory. The plan was to brand and sell all the chaats available in the market in a hygienic manner.
But we started with only the vada pav. One day when I was standing at the store, two ladies called the store a con, since we were only selling vada pav. So I immediately decided to change the name. Since we were selling a larger vada pav than what was available in the market, we decided to rename it Jumbo King.
Initially there were a lot of objections; everyone told me I was mad to waste my management degree by selling vada pavs. But I was determined to make it a success. I had priced the vada pav at Rs 5 whereas it sold for as little as Rs 2 in the market.
But my selling proposition was hygiene. Since I had nothing to lose, I experimented with everything - two outlets on the same side of one station, packaging, vada pav with cheese, flat patties, round bread, toasted bread and so on.
In the last quarter of the first year, we made a total of Rs 600,000 from just one outlet. The other outlets opened in 2003. I was worried at first about expanding because I was dealing with a perishable commodity, and catering to far-off places from a centralised kitchen was a constant worry.But we have introduced temperature controlled frying machines to automate the manufacturing process for hygiene and to reduce waste. We have also put the cold chain in place. Now we're even looking at franchises, but we want to grow steadily. Right now, I'm concentrating on improving the logistics and distribution and making sure we have the right systems in place.