Casual dining doesn't scale like fast food. Bharti is betting on Olive Garden anyway

**Snigdha Sharma** (0:00)
It's a hot Thursday evening in Delhi, and people are cute outside India's first Olive Garden outlet. Some have come after having looked longingly at Instagram reels about the American casual dining restaurant chain. Others are office goers from the business park in AeroCity. And almost all of them have spent at least half an hour waiting for a seat. All of this looks like good news for Bharti Group, which brought Olive Garden to India in May and probably hoped to see the same crowd.
Now Bharti Group's dining arm, called Gourmet Investments, is run by Ramit Mittal. He is a nephew of billionaire Sunil Bharti Mittal, the man who runs Bharti Group and who founded the telecom giant Airtel. Already, Gourmet Investments operates around 55 restaurants across India today. All brands you probably recognize, like Pizza Express, PF. Chang's and Chili's. The business has even grown its sales by over 40% to almost 180 crore rupees in the five years to FY25. And over the next three years, Bharti wants to go even bigger. The plan is to more than double its current footprint to 125 outlets, including 10 Olive Gardens.
That's as ambitious a target as it sounds. And to lead that push, Gourmet Investments has hired Rohan P.Vekar, the former chief of Pizza Hut, as The Vertical's new CEO.
Even the timing looks right for this plan. All the cuisines that once felt niche, like Italian, Chinese, Mexican, Japanese, Thai, have found fans in urban India. Diners are more well-traveled now and more willing to pay a premium for a proper sit-down experience. But there's a catch. You see, Bharti is betting big on casual dining, a segment that has proved to be hard to scale. Unlike fast food chains that run on fixed menus and standardized operations, casual dining depends on bigger kitchens, longer service times, and staff that is equally trained in cooking as well as hosting. Getting all of that right at every single location is not easy. Take Chili's, the American Tex-Mex chain for instance, which learned the lesson the hard way. It landed in India in 2009 with a plan to open at least 50 outlets in South and West India alone. 15 years later, it has only 30 restaurants nationwide.
That's the kind of challenge that Bharti is up against. The conglomerate wants to build a chain business in a segment where success usually tops out at about 20-something outlets. And its confidence lays on a very simple observation, that Indians have changed the way they dine out.
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Rachel Varghese, and every day of the week, my co-host, Snigdha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Monday, the 10th of August.
The pandemic was the turning point. You see, before 2020, visiting a fast food chain used to feel like an event. Today though, fast food convenience has moved online. So when people do step out, they increasingly upgrade to casual dining instead.
That's what Krunal Jhawala, who once ran Pizza Express India, told my colleague, The Ken reporter, Akriti Bhalla. He has also spent more than 12 years scaling fast food chains like Pizza Hut and KFC.
A report from NRAI, the body that represents the Indian food service and restaurant industry, adds another layer to his observation. It's said that the typical A typical. casual dining customer is 20 to 40 years old. The report even has a name for this demographic. Taste Voyagers. They are the kind of people who are always looking for new cuisines and experiences. Which explains why some serious capital is now pouring into the space. You see, before COVID, most of the investment in independent restaurants came from homegrown hospitality groups like KA Hospitality and Specialty Restaurants. But five experts from the food and beverage industry told Akriti that post-COVID, companies are accelerating the push to scale casual dining businesses to make the most of the trend. And Bharti was one of the first companies to see the opportunity. Through Gourmet Investments, it has spent nearly 15 years building a portfolio of foreign restaurant brands. Olive Garden is just the latest. Other companies have followed Bharti's suit. The Birla's, for example, launched several places under its Aditya Birla New Age Hospitality Arm. The list includes places like Hakkasan, a Cantonese cuisine restaurant, Yautja, a place known for its dimsums, and Naradhai, another Southeast Asian cuisine spot. There's also K-Hospitality, one of India's largest privately held food service companies that operates chains like Wagamama and Nando's. Even the Ambani's have partnered with Pret a Moncher, a breakfast cafe, and Armani Cafe, an Italian luxury dining major. Considering all the investments, it makes sense that India now has over 1,10,000 casual dining restaurants, which according to NRAI is nearly half the organized dining market. But despite the support of some of the most influential corporates, most international brands have found limited success in India. Take Yautja, for example. In 2013, K-Hospitality, its former owner, tried expanding beyond Mumbai into an upscale locality in southwest Delhi. But the monthly sales swung from 1.6 crore rupees to just 60 lakh rupees before it eventually shut down in 2017