24 May 2019 - News

We will continue to invest in the Indian market: Sanjay Kumar, CEO, Elior India

"Our focus shall continue to be to invest in improving the customer experience. We believe this can be done by bringing in new technologies," Sanjay Kumar, CEO, Elior India

France-based contract food catering and support service provider, Elior India, entered India in 2017 on the back of acquiring two Indian contract caterers. The company is expanding its presence in the Indian foodservice space and is looking to invest heavily in technology and manpower. In a chat with ETRetail's Varun Jain, Sanjay Kumar, CEO of its India unit, talks about the company's plan for the future here.

Tell us about your operations in India?
Elior is now India's largest pure play food services company and the third largest contract catering company in India. It has its presence across the country from Delhi down to Pondicherry and from Mumbai to Bhopal including Telangana. We aspire to continue expanding and serving customers across the country. We believe new segments will emerge in the coming years, which would include the railways, defence, and public sector manufacturing. We are delighted by the stellar growth we have achieved post the acquisition.

How much has Elior invested in the Indian market? How much you plan to invest in the coming years?
Elior entered India in 2017 through two simultaneous acquisitions – MegaBite and CRCL. Two years later we remain bullish on the Indian market and will continue to invest in it as and when the right opportunities come up. The mix includes investments in technology platforms, core assets infrastructure, and of course bolt-on acquisitions to complement our existing portfolio. We have recently invested in organic expansion by setting up production facilities in Delhi and Hyderabad.

What are the areas that Elior would be investing in?
We will continue to invest in improving the customer experience and we believe this can be done by bringing in new technologies. We have already invested in the development of platforms that will help us track consumer behaviour better, understand consumption patterns more effectively, reduce wastage, and bring in technologies through menu-management software- which can be linked to our ERP. This ensures precision and will make customer experience good by design and not by accident.

How much revenue did Elior clock last year and what are the expectations for this year?
Our revenue growth has been robust and has outpaced that of our competitors. When we started operations in India, we were serving close to 1.2-1.3 lakh meals. Currently, in less than 24 months, we are serving over 2 lakh meals per day. This growth has largely been achieved because of the trust we have earned from our customers. We remain the most premium service provider in the country, in all segments that we operate in. Our customer base believes that we follow some of the best practices in the food services industry because we remain focused as a food services player and not as an integrated player trying to provide both food services and facility management services.

Where do you see India in your global scheme of things?
Elior entered Asia through India, so India plays a crucial role in portfolio diversification and also serves as an incubation hub for new ideas and technologies to be tested and deployed. For example, we are currently in the process of doing a test-run of our payment and ordering platform, which has been developed locally and has the potential for global deployment. So, while India would not be the biggest contributor to the revenue portfolio of Elior, it contributes significantly to the incubation hub and possibly towards driving up the value. This aspiration fits in with our overall objective in India- to be the most valuable food services player.

Where will the growth in India come from?
The economic growth that we pose as a country will have a substantive bearing on our growth, as a large part of our food service program is targeted at automotive and related manufacturing segments which typically leads the growth cycle. Linked to the economic growth are some key tax reforms, where the food services industry needs to stimulate growth, re-introduction of the input tax credit can be a key enabler.

We estimate that for the food services market to grow at a robust 16% CAGR, we would need an annual GDP growth of about 8% to 8.5%. We haven’t seen that yet but we believe that India is poised to achieve that level of growth. This would act as a key enabler. In terms of key growth segments, I see both manufacturing, which is food at industrial plants and services which is food at work for corporates as our priority segments. The private education space will also be of interest to us going forward.

How many clients do you serve in India?
Currently, we serve close to a hundred customers. Our B2C offer, in partnership with Zomato, extends us to more consumers than we did before. The challenges we face today in B2B is not about getting new customers but in helping them understand that they need to invest in food at work as a value proposition and not as a cost item. The more customers we can get to believe in this, the better our quality of service and engagement with customers will be. Our biggest focus remains not in acquiring customers but in helping them acquire new philosophies on how they manage food offered at the workplace.

How many people does Elior employ in India?
We are one of the biggest employers in the food services industry. We currently have over 3900 people on payroll, none of whom are contracted staff. We believe that we will continue to hire on an average 600-700 people every year.

The article was published on ETRetail on May 24^th, 2019