With a Tiny Kiosk & Vada Pav, Mumbai Man Built a Rs 100 Cr Food Empire

In Maharashtra, vada pav is a staple breakfast food, an evening snack, and sometimes a quick meal on the go, all in one. The street food is humble yet famous, and affordable to the masses at large. It is often served with accompaniments such as fried chilly, chutneys, and sauces, and comes in different levels of spice. The taste of the dish never disappoints, and if you visit Mumbai and leave without having one, it might be considered utter disrespect for the city altogether.

Dheeraj Gupta (46) was aware of the prowess this simple snack holds. He has taken the humble vada pav to different parts of the country, and elevated it to be at par with the food at McDonald’s, Dominos and Pizza Hut. With an initial investment of Rs 2 lakh, Dheeraj started Jumboking Burger, which has grown into a Rs 100 crore business entity.

In 1998, Dheeraj had just completed his business management course, and it had been only a couple of years since McDonald’s and Dominos first entered India. “Soon after college, I wanted to establish a logistical base for the manufacturing and distribution of Indian sweets. I felt confident that single portions of Indian sweets, packaged like chocolates, would do well. I learned that the sweet industry in India was an unorganised sector, and decided to change the scenario. Unfortunately, the idea never took off,” he says.

He lost almost Rs 50 lakh in two years before giving up on the business idea altogether. “I had borrowed money from various sources, and was exploring various ideas that could turn into a successful business. Alongside, I could not manage to keep my eyes off the success of McDonald’s and Dominos. With firm resolve, I bid goodbye to the idea of a sweet business, and decided to focus on building a Quick Service Restaurant (QSR) business on the lines of the international giants,” Dheeraj adds.

A clear distinction from competitors

Inspired by the popularity of Mcdonald’s burgers, Dheeraj chose to try his hands on vada pav. In 2001, he took a loan of Rs 2 lakh, and rented a 150-200 square feet space outside Malad Railway Station to launch Jumboking, with the promise of selling hygienic and freshly-made vada pav. The snack was 20 percent bigger in size compared to the ones in the market. It worked.

“The initial success of the format gave me confidence. Looking at the surge in Jumboking’s popularity, competitors replicated the model, claiming themselves as ‘Jumbo Vada Pav’. But an increased presence of our outlets helped customers easily identify the original,” he says.

Dheeraj says opening the outlets gave him an insight into the functioning of quick-service restaurants. “As I was developing the brand, I started learning about the reasons behind why global QSRs succeed by brand positioning and marketing, how they built their story to pull customers, and keeping a sharp focus on creating economies of scale on a single product and massive back-end distribution. As we increased volumes on bread and potatoes, our ever-expanding family of franchises inspired us to innovate. Our first two product innovations were Schezwan Jumboking and Cholle Jumboking,” he recalls.

Dheeraj says that he never felt the need to reinvent the wheel. “Jumboking has been built by observing the business models of global QSR giants. My research and physical experiences helped in the process. I would encourage budding entrepreneurs to read books by Al Ries, and Jack Trout, such as ‘Focus: The Future of Your Company Depends on It’ and ‘Positioning – The Battle for Your Mind’. These have helped me through my journey,” he adds.

The entrepreneur says that later, the company adopted Subway’s franchise model. “Subway has a 100 percent franchise model, because of which it has 78,000 stores worldwide. A franchise network helps in churning profits,” he adds.

Though Dheeraj tasted success in Mumbai, the business faced challenges in other parts of the country.

Difficult innings outside the home ground

“Every venture faces several challenges; ours came around 2010, a decade after entering the business. The initial investment had helped us grow to 32 chain stores. In 2007, we were eyeing a turnover of Rs 6.5 crore and even raised a small round of investments. We reached a satisfying tally of 45 outlets by 2008,” he tells The Better India.

Dheeraj says problems arose around the time the company decided to experiment outside Mumbai. “Our strategy was flawed. Despite having a presence in 13 cities with 52 stores by 2012, half of which were company-owned stores, we suffered losses. The bleeding outlets started struggling with unit economics and overhead costs like rents and salaries,” he admits.

He says customers outside Mumbai could not relate to the vada pav the way people did in Mumbai or other parts of Maharashtra. “They considered it as a non-local food item, and could only relate to consuming it on their visit to the city,” Dheeraj adds.

However, things improved when the company renewed focus on fiscal discipline. “A lot of efforts went into conducting thorough research of the market to reposition the brand. We invested heavily in technology, lean systems, processes and partnered with reputed manufacturing companies. The Jumboking vada pav transformed itself into a burger brand. We started calling ourselves Burgers – Born in India,” Dheeraj says.

An Indian burger

 

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The company also took a bold bet by completely realigning the business model from company-owned stores to a franchise model. “We focussed all our energies on creating the best franchise system possible, and invested heavily in brand building. By 2013, we were back on the growth path. Innovation, training and unwavering discipline have been our biggest strengths,” he adds.

At present, Jumboking offers vada pavs and burgers in flavours such as Tangy Mexican, Corn Palak, Nachos, Cheese Grilled, Big Crunch, Tandoori Paneer and Crispy Veg and recently introduced Mac and Cheese burgers. It also serves wraps, thick shakes, ice cream and fries. Stores are present in cities including Mumbai, Pune, Indore and Lucknow, with 114 franchise outlets. Dheeraj aims to have 180 outlets across the country by March 2022.

When asked about introducing a healthier option in Indian burgers, he says, “We introduced brown bread, but it did not do well. I think customers have their priorities clear in terms of whom they go to for what.”

Dheeraj’s advice to aspiring entrepreneurs is to have a focussed and disciplined approach towards their business. “It is always better to put concerted efforts on one cuisine and improve it, rather than widening the options. It will require patience, but the effort will help sustain in the long run,” he adds.

Edited by Divya Sethu