Fast Food Big Money | Shreh Madan, Burgrill | Harry Hakuei Kosato, Kikkoman

FYNDOUTWITHRAGINI  |  PODCASTS  |  FOOD AND BUSINESS

A burger chain, a 350-year-old soy sauce, and one shared problem

Shreh Madan has 62 Burgrill outlets and once closed eleven of them in a single day. Harry Hakuei Kosato has been asked by Tokyo to build a hundred-year brand in India. They came on together, which turned out to be a good idea.

Burgrill sells a grilled burger in the gap the Indian market left open. Kikkoman sells an ingredient most Indian kitchens think they already understand. Different businesses, same problem: getting people to try something, then building a system that repeats it thousands of times without the quality slipping. They spoke to Ragini about franchising by accident, the aggregator bargain that stopped being one, and why some restaurants took two years to change a single bottle in their kitchen.

"Make haste slowly."

Shreh: the gap between a ₹20 burger and a ₹500 one

We sat down and asked ourselves what problem we were solving. Back then nobody was serving grilled burgers. You either went to a casual dining place and spent 500 rupees on a burger, which was very expensive, or you had McDonald’s starting at 20 and going up to maybe 150. There was nothing in between.

And the major point isn’t fresh versus frozen. When you grill a protein fresh, the taste enhancement is completely different. Most burger chains here take a frozen patty, fry it, assemble it. That was the gap: a huge market at 250 rupees nobody was playing in, and a niche in grilling almost nobody emphasised.

Shreh: we never actually sold a franchise

We were bootstrapped and didn’t have much capital, so we franchised. But we have never gone to market to sell our franchise, ever. Our franchisees are people who ate the food, saw the queues outside, and asked whether they could open one in their city.

Franchisees were getting their money back in six or seven months. The payback was so short that we were flooded with requests we weren’t ready for. Today we are at 62 outlets, 19 company-owned and 43 franchised, and we have deliberately stayed in the north: Uttarakhand, Haryana, Punjab, Delhi NCR. It isn’t about choosing north, it is about playing your home ground well and building clusters, because getting the supply chain right is the backbone of a business like ours.

Shreh: closing eleven stores in one day

Before COVID we were at 34 stores. We dropped to 23. Eleven stores closed in a single day. Nobody talks about this, because these are the scary stories.

It was devastating, and I am not talking about my money. I am talking about people who invested in my brand, which makes it my responsibility to see they earn it back. Some of those stores had opened two or three months before COVID hit, and the operators were suddenly paying salaries out of their own pockets. We had one opposite the Park Hotel in Kolkata paying three and a half lakh a month in rent. Sometimes people just have faith and say they will make it work. It isn’t going to work, and knowing when to shut down matters.

Harry: without India, soy sauce would never have been born

People think Kikkoman soy sauce is for Japanese food. That is the one big myth. You can use it in over 200 cuisines. We have a chef and restaurant owner in Pune who uses it in kadhi, and it is much tastier than a normal kadhi. If a restaurateur puts it on the menu for their own customers, there must be something in that.

And here is the fascinating part. Buddhism was born in India. The monks went to China, and the Chinese developed jiang, an early fermented soy sauce. From there it reached Japan, where Zen monks refined the fermentation into what soy sauce is now. Full circle: India to China, China to Japan, Japan to the world.

Harry: some customers took two years to change

Everything is about perception, or maybe expectation. People assume it is expensive, then look at the price and say, actually that’s reasonable. Think about a chicken Manchurian with seven ingredients. One has to be soy sauce. Why save money on a key ingredient that is a few percentage points of your food cost?

So it takes trial and it takes persistence. Some of our customers took two years to switch, and after that there is no looking back, because the customers notice. We ran independent before-and-after tests and 85% thought the food was better.

Harry: what we changed for India, and what we didn’t

The classic Kikkoman soy sauce is the same global product sold in over 100 countries. Four ingredients, naturally brewed, no preservatives, no additives, no flavouring, and completely vegetarian. That doesn’t change.

What we added is for here. The oyster flavoured sauce, which is vegetarian, is made in Thailand. The dark soy sauce is made in India, for India. The reason this market got used to a darker soy sauce is that it used to be chemically produced. We have three products here. In Japan we have around 2,000, of which about 600 are soy sauce variants. That is 350 years of history and you cannot bring it out all at once.

Shreh: the aggregators were a trap

When they arrived it was wonderful. We paid 5% commission, inclusive of delivery. Before that we ran five or six riders per outlet on salaries of 50 to 80,000 rupees plus fuel, and still couldn’t do more than about 50 orders a day, because one rider manages maybe three deliveries an hour. We were actively telling customers to stop phoning us and download the app.

Ten or twelve years on the commissions are high, we pay for marketing on the platform just to stay visible, and we get no customer data. That is the real problem. They know a particular pocket has a spending capacity of 300 rupees and eats between six and eight in the evening, and now they are plugging in their own kitchens. If you have my data and won’t give it to me, I don’t know who my own customers are. It is time we started asking those questions.

Harry: build for a hundred years

Our team in Tokyo asked me to create a hundred-year brand in India. I am still held against monthly and quarterly targets, that is capitalism, but the real goal is to do the basics right and build foundations that last a century.

In Japan there is a word, shinise, for a company that has existed more than a hundred years, and Japan has more of them than anywhere else. You can be a flash in the pan, or you can be part of the economy. We have only been here four years. It is a much longer journey.

Listen to the full conversation with Shreh Madan and Harry Hakuei Kosato on FyndOutWithRagini.