From Google to LinkedIn, food now intrinsic to business agenda: Elior India CEO speaks to TNM

According to a recent study by leading employee assistance programme (EAP) provider Optum, about 46% employees in large companies in India are battling high stress levels. 

Studies have revealed that poor nutritional habits are a leading cause of low productivity levels worldwide. 

A recent study 'Workplace Stress: Impact and Outcomes: An India Study 2016' showed that the total organisational productivity loss per year (because of absenteeism due to stress) adds up to approximately Rs. 49.6 crore in the IT/ITeS sector (for an organisation with an average employee base of 10,000), Rs. 105.48 crore for the finance/banking sector (average employee base of 5,000), and Rs. 10.5 crore for the travel and hospitality sector (average employee base of 2,000). 

Today, with stress levels peaking in several industries, employees are increasingly demanding tasty, healthy products served in pleasant surroundings, along with catering services that suit their lifestyles. 

Food has now become a part of the business agenda as companies become more conscious about food safety and health at the workplace. 

Elior India is a premium corporate food services company and amongst the top three in its category in India. It is part of the France-based $6.5 billion Elior Group, a global player in the contracted food and support services industry. 

In 2016, Elior acquired MegaBite Food Services, which is a leading Indian contract caterer for the business and industry (B&I) market. 

With over 3,500 employees on its rolls, Elior India today serves 1,45,000 meals daily to employees of companies such as Cisco, Google, LinkedIn and Microsoft, to name a few.

Sanjay Kumar, the CEO of Elior India, and Chef Prabhakar Nagaraj, Managing Partner, Culinary Development at Elior India (formerly with Megabite) spoke to TNM on a range of issues including the criticality of food to productivity levels, how lives of farmers are being impacted, collaborating with the government and the road ahead. 

CEO Sanjay Kumar

How did you enter the food contract business in India?  

CEO: Chef Prabhakar is a leading industry chef who started this company called Megabite which Elior acquired early in February this year and that’s how we came together to drive Elior’s entry into India. And subsequent to that, we did a second transaction where we acquired a company in Chennai called C Ramachandran Catering Ltd. (CRCL). And these two companies together help us to serve around 1,45,000 meals a day which makes us the largest in South India and amongst the three largest nationally. 

Why is food so critical to productivity levels?

CEO: Food is a very critical category for everyone and that’s the core of our business. We serve meals to people who work in offices. We serve meals to students. We serve meals to workers that work in a factory. And reason we believe that it impacts productivity is because first physiologically it has a direct link to your health. You are what you eat. And second is that as a consequence of being healthy, it has a co-relation with your productivity. If you eat good food, you will be healthy. And by good, I mean not necessarily tasty, but safe and nutritious. So that’s the core of our business which is why we do not serve food in a manner that our competitors do which is very process-oriented. 

What kind of companies do you serve? 

CEO: Every customer that wants to create an environment which their employees see as a great place to work will have us as their food service provider because there is a strong co-relation between the philosophy of the customer and our ability to deliver good food. Because if the customer does not believe that they want to build a great place to work, then they won't believe that food is a part of the value proposition for the employees.

So the moment you talk quality, you have to invest. So companies that value this, you will invariably see us serving food there. From a Google, LinkedIn, Shell, Microsoft, Goldman Sachs, Cisco, Accenture, Zinga, Paypal, Mckinsey, Uber, Expedia, wherever this co-relation exists, the derivative of that is, we will be the food service provider. 

Where are your kitchens based? 

Chef: There are three places in Bengaluru where we have kitchens within the offices. Otherwise, we have a base kitchen where we produce the food and then transport it. So it’s a complete factory kind of setup where there is raw material and a finished product that comes out. It is then loaded onto vehicles and it goes to different locations and it gets served over there. So it’s a very systematic process. We studied the market and based on that we came to know the consumption pattern. 

Chef Prabhakar Nagaraj

In terms of meals that you serve, what differentiates you from your competitors? 

Chef: Our advantage which we have is that we still follow the regular pattern of dal chawal, sabzi, the other part of it is the salad bars, pastas and so on, we add that as something which has never been part of a meal before. Any place where we are doing food services, we will see that this becomes a part of our buffet on a given day. So that basically is the differentiator with our competition. 

CEO: And its’ a global philosophy. So globally we have Rs 6.25 billion revenue and both our competitors are larger than us but all the customers that deal with us will say when it comes to wanting premium food which can be adapted as per the customer’s requirements, because premium and adaption are very co-related, they always talk to us. That’s the beauty of our model that it is not a victim of processes. It can be customised to delight the customer which is where we score. 

Chef: The other thing that is happening which is recent is that with big players coming into the market, there is a lot of consolidation which is happening where the small timers are not able to do what they were supposed to be doing before and the requirement from the corporates is also increasing day by day, where compliance has become very important. 

So the smaller players are not able to manage all those things and that is the reason they exit. The differentiator which we are bringing, where we are different from our competitors is having kitchens which are top notch in terms of systems and processes, where they have an ISO certification, where you are checking each and every ingredient from the time it is bought till the time the food is cooked. 

Which places do you operate in currently? 

Chef: We are serving in Bengaluru, Chennai, Mumbai, Hyderabad, Coimbatore, Kozhikode, Hosur. So hopefully, our national footprint will get established by the end of this year, driven not so much by our own desire but by the fact that our customers want us to be there, which I think is a very good reason to expand. So hopefully by the end of this year, we will be present in the North. 

CEO: So as far as cooking is concerned, all the food is cooked fresh. We cook every food whatever is there early morning from 4am onwards. So every single day’s gravy is made fresh. We keep nothing one day before and neither do we have the philosophy of getting that food back and reusing it. Whatever food is left over is being given to people over there or it is being thrown but it is never reused. So the food is always safe. 

What kind of impact are you having on people working in the industry? 

CEO: As of now, we are present in the South. We probably impact the community of farmers much more than any other hotel or establishment. So in the South, for example, we buy 200 tonnes of rice every month, we buy more tomatoes and vegetables than anybody else. We buy more tofu than maybe most of the hotels put together because we are serving 1,45,000 meals a day across South India which even all hotels put together won’t be serving.  

So the lives of communities that work with us are directly linked to the kind of activities that we do and therefore this stress that we give on quality is actually helping us to upgrade the inputs from farmers because they know now that there is a price that you procure if they produce good quality vegetables.

Does a lot of food wastage happen in your business? 

CEO: It doesn’t lead to a lot of wastage but it can be reduced further. For that, our clients have to be more sensitive. What happens is whenever anything is served free, you tend to put more than you need which drives waste. So now, more and more consumers are becoming conscious. Gradually, people are realising lets not waste. Lets consume what we need. But we are constrained because we cannot be seen to be falling short in providing the consumer what he wants. The choice of how much to waste rests with the consumer ultimately. Unfortunately, not with the service provider because if we do that, they will say we didn’t cook enough. So it’s an anomaly. Unless corporates become more sensitive and they start driving the need for creating consciousness around consumption, you will still see some amount of wastage.

What is your biggest strength?

Chef: Our biggest strength has been that we have not lost a single account in the last 10 years that we have been there. The biggest factor which will make us lose a client is serving the same dishes again and again. 

We create special dishes for some days. So for example, one day we will not serve your regular fare but we will have only biriyanis. There will be seven to eight different varieties of only biriyanis. 

Along with this, we started the concept of providing live stations with the meals. For e.g., if you are making a tava vegetable, you mix it with your basic gravy. But you can come and say I want to have some bhindi or some brinjal. You can mix and match and the customer can make his own customised meal. So we have made it more interesting and customer-oriented. 

Are Indian companies generally lax when it comes to employee wellness? 

CEO: It depends on which industry you are in. A company like Godrej benchmarks itself against the best in its class. So they are sensitive to employee needs as compared to some other companies, for instance in the field of IT, which only look at costs. For such companies, employee needs are not important because they are not concerned with the domestic market. They are not selling goods and services in India unlike a Godrej or a Marico. They need their employees to be happy because they are servicing this market wheres companies which are operating on a cost arbitrage model, for them food is just another part which is as important as the cost per square feet of a desk. So it’s the philosophy of the company that is more important that just its ownership. There are many Korean companies which have a similar philosophy as that of Indian companies, where food is just a cost item. So, it’s not so much about which country you come from, but about what philosophy you have towards your employees. 

How many players are there in the market?

CEO: There are three large players globally and in India as well. We think that competition is good, especially when it is with organised players because for us it defines the industry benchmarks. Second, it brings about consolidation and most importantly, it creates an environment for bringing the global best practices to India. 

We are serving corporates, educational institutions, factories, production plants. 

Any areas where you are collaborating with the government?

CEO: We are partnering with the government in National Skill Development Programme (NSDP) which is the flagship programme of the government where we help to train people to be better equipped to work in this industry. This happens through a partnership the firm has, with reputed business houses in India where you get certificates for your skill. We then also have intakes where we employ people that go through this programme, to build a career with us. We provide graduate programmes with vocational training and at the end of the course, they get a degree similar to that of a hotel management degree. 

What does the future hold? 

CEO: We think the category is poised for a quite a lot of interesting changes. Of course, some markets will see the change much quicker than the others. Mumbai is still evolving. The first step was to have a scenario where you can have food without the ‘dabba' coming in and increasingly corporates and even the developers are beginning to see that just like in an office building, you need to have a reception area, similarly you need to have a food area where we don’t think of it as an opportunity cost but think of it as a part of the value proposition that you need to give to your tenants to attract them to your property. So that is going to evolve. 

We will definitely look at expanding our footprint into newer markets because now our customers want us to go and serve them in other cities. So even though the category is already growing rapidly at about 16% CAGR, you will see a further acceleration in growth of the organised players because as people become aware of what they are eating, they are going to be more conscious of having food from kitchens which are compliant with safety and health standards.