SA chain Barcelos to enter the retail space, open express outlets in malls

South Africa-based restaurant chain, Barcelos – which came to India with the aim of opening 20 outlets in all over five years and earning Rs 200 crore in revenue – has some new tricks up its sleeve, apart from churning out great flavours. The casual dining specialist, that boasts of a menu concentrating on authentic Portuguese flavours, plans to foray into the retail space.
In an exclusive interview with Indiaretailing, India Head of Business, Barcelos, Rohit Malhotra said, “We are introducing retail products including Peri Peri Sauce and Peri Peri Nuts in the market, which will be up for sale both in our own outlets as well as supermarkets across India. In the beginning, we will start with just these two products and, slowly and gradually, we will introduce more products.”
And that’s not all. Barcelos has some fancy expansion plans that include opening express outlets in malls.
“We are working on our Barcelos Express outlets, which will be introduced in the malls first. The plan is expected to take shape in next three months,” said Malhotra.
Expansion Is The Key To Success
The brand is also expanding its presence in various cities and as a part of its expansion plan, has recently opened a new 110-seater restaurant in Kolkata.
The franchised casual dining restaurant in Kolkata is a result of a tie-up with Trivia Food & Beverages Pvt Ltd., and the collaboration is likely to be replicated in the near future for a few more restaurants in West Bengal.
This is the fourth outlet for the restaurant chain – it has two in New Delhi and one in Gurugram – which started off in 1993 in Pretoria, and is now present in 18 countries (including in India) with over 120 outlets
The brand is also planning to open more outlets in South, West and North India – all outlets will be an amalgamation of company-owned as well as franchised outlets, much like the other restaurants.
According to Malhotra, “We are looking forward to open six to eight more outlets by 2017 in cities like Mumbai, Pune, Hyderabad, Bengaluru, Kolkata and Lucknow.”
The international casual dining restaurant, which is known for serving healthy food, is planning to raise funds in March 2018 to meet its set targets. It is planning to invest Rs 12-13 crore for expansion plans and in return is expecting to do Rs 200 crore business in India by 2020.
“We will inject some funds back into the market, while the remaining will be used to expand and advertise,” said Malhotra.
And the management is confident they will soon see profits.
He added, “At our Khan Market outlet, we have already recovered our investments. Since all other stores have opened this fiscal, we don’t have the revenue numbers handy. However, on an average, every store is managing an average sale of Rs 30 – Rs 35 lakh per month and by 2017, we are expecting a sales growth of 20-30 per cent”
The brand is hoping to capture 25-30 per cent market share in the casual dining space serving healthy food over the next three years.
Strategy For India
Barcelos has taken a different route and a different strategy to do business in India.
“Before entering India we conducted very intensive research on the Indian market and consumer behaviour. Our marketing strategy was based on this survey. Almost 40 per cent Indians are vegetarian, so we developed a special menu to cater to vegetarian customers in India. Our prime objective was to deliver food that is not just healthy and hygienic but also tasty, as Indians go by taste when it comes to eating options,” said Malhotra.
“The Indian palate has traditionally gravitated towards more chilly and spicy flavours and the Barcelos flame-grilled, peri-peri offering brings out the best-in-class spicy fare. Along with this we have also introduced a variety of special drinks and desserts. We have recently added fish in our menu for our non-vegetarian patrons,” he added.
Opportunities and Challenges
Each journey comes with its own set of opportunities and challenges and weaving a success story for Barcelos was also no different.
“We have tried to provide health food that will suit the changing and evolving tastes of well-travelled Indians, in a casual dining atmosphere,” said Malhotra.
However, there was a flip side to this coin – attracting those desi consumers who are mostly at ease with Indian, Chinese and Italian cuisines.
“We had to work from the ground up to educate these customers and lure them through different offers,” said Malhotra.
Apart from this, there were challenges like high rentals, as well as lack of skilled labour. Careful vetting of employees and great marketing to break even helped solve some of these problems.
Different Shades of Burgers
Despite facing many challenges, the South African chain laboured on in India and the results are showing. Their reputation as a pioneer in coloured food preceded them to the country, attracting many a consumer. Some of their techniques – especially coloured burgers – are now being replicated by other restaurants.
Malhotra said, “Gourmet innovations introduced at Barcelos include Black Burger, Red Burger, White Burger, Sangria Bar serving 21 types of Sangrias and Boozy Shakes.”
The brand is now working on a new menu which will be launched in the second week of January and will include dishes like Peri Peri Pasta.
The Way Forward
Apart from this, Barcelos is also working on its app, which they hope to launch soon after the Express outlets become a reality – by April or May 2017.
“Through the app, customers will be able to book tables and place their order. They can also make their own burgers, and accrue loyalty points,” Malhotra concluded.