Rollatainers Limited (BSE: 502448) Emerging Everyday
Food Business August 2015 Table of Contents
1. Overview 3
2. Organisational Structure 4
3. Management Biographies 5
4. Industry Snapshot 7
5. Strategic Direction 9
6. Carnation Brands 10
7. Appendix 22
2 Overview
Group Overview Recent Developments
Rollatainers Limited has a longstanding presence in the consumer packaging industry, particularly as a supplier to the “Rollatainers’ and International Market Management Ltd’s FMCG sector. (“IMM”) 50:50 joint venture company, Sierra Nevada Pvt. Ltd., entered into a long term licensing agreement for setting up the Carnation Hospitality Private Limited (“Carnation” or “Food Wendy’s Restaurant franchise in India” business”) is a wholly owned subsidiary of Rollatainers and is August 27, 2014 engaged in the food business.
“Carnation acquired Lavazza’s wholly owned subsidiary F&B Brands “Barista Coffee Company Ltd.”, which operates the second largest coffee chain in India with a presence in the UAE, Sri Carnation owns F&B businesses such as Lanka, Nepal, Bangladesh and Myanmar” • Barista, the coffee chain August 11, 2014 • Mapple Hospitality, supplies food to Mapple hotels and has substantial banqueting and B2B operations “Rollatainers’ and IMM’s 50:50 joint venture company, • Kylin chain of oriental cuisine dining Dolomite Restaurants Pvt. Ltd., entered into a long term development agreement with Jamie’s Italian International Also introduced global restaurant chains such as Ltd to operate Jamie’s restaurants across India” July 16, 2014 • Wendy’s, the third largest burger chain in the world • Jamie’s Italian, by celebrity chef Jamie Oliver “Carnation also acquired the Kylin restaurant chain, and the Mapple foods business” July 16, 2014
3 Overview Organisational Structure
Rollatainers 49.99% Limited
100%
IMM Associates Carnation RT Packaging Ltd (JV Partner) Hospitality Pvt Ltd
Sierra Nevada Dolomite Barista Coffee Mapple Hospitality Welgrow Hotel Restaurants Pvt Ltd Restaurants Pvt Ltd Company Ltd Pvt Ltd Concepts Pvt Ltd
4 Organisational Structure Management Biographies
• Sanjay is an entrepreneur and co-founder of Mapple Hospitality • He also has extensive experience in the fields of engineering, marketing & project implementation Sanjay Chhabra • Before venturing into entrepreneurship, he worked with engineering major Larsen & Toubro for over 7 Managing Director – Carnation years • Sanjay is an engineer from IIT Delhi and holds an MBA from Jamnalal Bajaj Institute, Mumbai
• Saurabh has vast experience of over two decades in the F&B & travel sector in India Saurabh Khanijo • Has successfully managed the establishment & expansion of the "Kylin" brand in North India Director - Carnation • Saurabh holds a Masters degree in Business Administration
• Jasper is the co-founder of IMM, where he led the establishment of Pizza Express in India and its operating Jasper Reid business (Asia Brand Partners & Greater Pacific Restaurant Corp) Co-Chief Executive Officer – Wendy's • Has over 20 years of experience across developed & emerging markets & Jamie's • He previously worked with Macquarie Group as Managing Director • Jasper holds a Masters degree from Oxford University
• Sanjeev has over 23 years of experience in advertising, sales, marketing & general management • He has been associated with companies such as Topps Company Inc., McDonald’s India, McCann Erickson Sanjeev Katyal and FCB Ulka Chief Executive Officer - Barista • He holds a Commerce Degree from Delhi University and Executive Management Degree from National Business School of Singapore and Hamburger University, USA
• Arvind has over 20 years of experience in Operations in the F&B industry in India Arvind Dixit • He has worked with Connaught Plaza, McDonald’s North India franchisee, as Director of Operations Chief Operating Officer – Wendy's • Arvind is a graduate from IHM, Pusa
5 Management Biographies Management Biographies
• Mandeep has extensive experience in F&B and retail sector in India Mandeep Sethi • He has worked with McDonald’s India for more than 11 years Vice President (Operations) – Jamie's • Has also worked with Future Retail and Mondelez India Pizzeria • Mandeep holds a degree in Hotel Management and Executive MBA from IIM, Kolkata
• Kunal has over 15 years of experience in the F&B retail sector in India Kunal Dewan • Has worked with leading brands such as Pizza Hut and KFC in India and Subway in the UK Vice President (Operations) – Jamie's • Kunal also worked with Amici as Head of Operations, where he scaled up the business from a single store to Italian a chain of stores • More recently, he was leading the development of Zizo, a new fast casual brand
• Sanjay has over 27 years of experience managing hotel & food services business • He is the co-founder of the Mapple Hospitality chain of hotels Sanjay Wadhawan • He started his career with Usha Group, where he worked with their consumer packaging business, as well as Joint Managing Director - Mapple their master franchise operations for Choice Hotels • Sanjay is a commerce graduate from Hindu College, University of Delhi
• Rajat has over 10 years of experience in financial consulting with majors like Ernst & Young, Deloitte and Rajat Agrawal Grant Thornton AVP – Corporate Finance • He has been involved in transactions spanning across F&B • Rajat is a Chartered Accountant by profession and holds a bachelors in commerce
6 Management Biographies Industry Snapshot
2013 Market Size 2018 Market Size
Pubs, Bars, Pubs, Bars, Fine Clubs and Fine Clubs and Dining Lounges Quick Dining Lounges Service 21% CAGR Cafes 3% Cafes 4% 4% 2% Quick 46% 12% 13% Service 54%
Casual Industry size Industry size Dining Rs. 12,010 Cr Sales Casual Rs. 32,000 Cr Sales 33% Dining 29%
Mkt Size % of 2013-18 Category (Rs. Cr) Total CAGR Growth Opportunity • Expansion into Tier I and Tier II cities Quick Service 5,500 46% • Increasing preference for convenience food 25% • Innovation in menu and offerings to suit local tastes and preferences
• India per capita coffee consumption 80 gm vs 8 kg in developed countries • Cafes 1,520 13% 20% Growing preference for coffee in India • Consistent growth of consuming class
• Increase in number of nuclear families and working women Casual Dining 3,950 33% 18% • Steady growth in incomes, changing lifestyle and eating patterns • Increasing preference for new cuisines from around the world
Source: Teknopak Advisors
7 Industry Snapshot Favorable Industry Backdrop
Favorable Demographics Eating out ratio (times / month)
Thailand 45 Rising Number of Working Women Singapore 40 US 25 Lifestyle Changes UK 20 Indonesia 15 India 2 Increasing Income and Consumption Levels - 20 40 60 Source: National Restaurant Association of India Urbanization Fast food consumption, by age group
Above 18-20 Hygiene-conscious Customer 40 years years 18% 11% Increasing Preference for New Cuisines 31-40 years 21-30 Rising Number of Malls & Multiplexes 31% years 40% Logistics Providers and Contract Cultivation Source: Athena Infonomics
8 Industry Snapshot Strategic Direction
Capitalise on the growth potential in the Indian food industry
1 Create a basket of highly valued food brands with quality food
2 Unique positioning for each brand to build a scalable business model
3 Build synergies across brands by sharing best practices
4 Being a cut above at competitive price points
5 Be an employer of choice
9 9 Strategic Direction Overview
• Second largest coffee chain in India • Presence in UAE, Sri Lanka, Nepal, Bangladesh, Myanmar • Close to 180 stores including 21 outside India • Focus on high streets, malls and corporate offices • Targeting 750 stores by FY2020
Strategy and Outlook
Simplify store formats and refresh the brand
Improve customer experience
Enhance products and service offerings
New store strategy to focus on key tier one / two cities
Economies from centralised operations
Rewarding franchise model
10 10 Carnation Brands Turnaround Strategy
Existing stores New Stores Franchise operations Brand monetisation
• Revenue sustenance and • New store formats catering • Undertake domestic & • Enhanced brand experience enhancement at existing to target customers international expansion through extensive brand stores though extensive • Own store expansion in high through franchise route for repositioning effort rebranding effort to attract footfall areas incremental growth • Brand monetisation through customers • Revamped location selection • Develop robust franchise retailing of branded • Cost optimization to reduce strategy strategy packaged products (Ready- expenses and enhance • Develop enhanced selection To-Eat & Ready-To-Drink profitability criteria for franchise products) operators
Intervention Currently Being Undertaken • Closure of loss making stores which cant be turnaround • Launch of new marketing & branding initiatives to reposition Barista vis- à-vis competition • Strict financial monitoring with regular store checks • Separate franchise & staff training department established to improve • Optimization and rationalisation of costs to minimize of food wastage store management & service
11 11 Carnation Brands The New Look
12 12 Carnation Brands The New Menu
Source: Prices stated above are indicative 13 13 Carnation Brands The New Positioning
14 14 Carnation Brands Post Acquisition Growth
Average Daily Sales Average Daily Tickets
City Same Store Change (%) City Same Store Change (%)
Sep ‘14 vs Jul’15 Sep ‘14 vs Jul’15
Chennai 11% Chennai 3%
Delhi & NCR 11% Delhi & NCR 8%
Hyderabad 9% Hyderabad 9%
Mumbai 9% Mumbai 8%
Bangalore 2% Bangalore 3%
Overall 5% Overall 4%
15 15 Carnation Brands Overview
• World’s 3rd largest quick-service hamburger chain • Presence in 30 countries • More than 6,500 restaurants globally • Targeting ~50 stores by FY2020 in India
Strategy and Outlook
Offer consumers a QSR+ experience
Develop an innovative menu across all day parts
Deliver quality, fresh and real food
Great value at competitive price points
16 16 Carnation Brands Wendy’s in India
17 17 Carnation Brands Launch Day
18 18 Carnation Brands Overview • Italian dining chain by celebrity chef Jamie Oliver • Jamie Oliver is known for his food shows, cookbooks and the recent global campaign for better food education • 35 Jamie's Italian outlets across the UK, as well as 9 international restaurants • Targeting ~190 stores in India across formats by FY2020
Strategy and Outlook
Position as a Fast-casual authentic Italian food chain
Capitalise on the high profile Jamie Oliver brand
Leverage growing preference for Italian cuisine
Develop a scalable pizzeria format
19 19 Carnation Brands Overview • All day dining multi-cuisine restaurant that operates across the Mapple Hotels • Operates speciality restaurants to cater to regional preferences and food services including banqueting services • Presence in New Delhi, Bangalore, Jodhpur, Corbett and Bhimtal
Strategy and Outlook
Continued focus on providing food services
Banqueting, Railways / Delhi Metro and other food catering
Backward integration for other Carnation brands
20 20 Carnation Brands Overview • Kylin operates world class casual dining chain for over 10 yrs • Brands include Kylin Premier (the Teppanyaki Grill / Oriental), Kylin Experience and Kylin Express (QSR and delivery based) • Has 9 stores in north India • Targeting ~150 stores by FY2020
Strategy and Outlook Expand the already successful Kylin brand and platform
New Asian flavors for the Indian palate
Capture market share at affordable price points
Making pan-Asian cuisine a healthy platform
Scalable QSR and delivery based format
21 21 Carnation Brands Appendix I – Industry
o Favorable demographics o 65% of the Indian population below the age of 35 o Majority of QSR/branded coffee sales are to people in age group of 18-40 o Increasing income and consumption levels o Total household consumption is expected to rise from Rs. 82K in 2005 to Rs. 248K by 2025 making India the 5th largest consumer market o Higher disposable income will lead to increased spending on eating out o Lifestyle changes o Shift to nuclear families, dual income & higher standard of living to lead to an increasing proportion of Indians eating out o Rising number of working women o Women constitute about 51% of those who eat out at least once a month o Health and hygiene o Urban Indian consumers are becoming more conscious about health and fitness leading to an increase in the demand for food and beverages from branded stores o Urbanization o By 2030, about 40% of India’s total population is expected to live in urban areas o Multiple cuisines o Indian consumers are increasingly preferring newer cuisines - Indo-Chinese, Thai, Italian, Japanese, Mexican cuisines, etc. o Improved retail format o Development of new and interactive retail formats such as mall and multiplexes are leading to greater penetration o Logistics providers and contract cultivation o Contract farming is helpful in sourcing agricultural produce at an agreed price o Emergence of third party logistic providers has also helped in rapid expansion of QSR sector in India
22 22 Appendix Disclaimer
This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Rollatainers Limited future business developments and economic performance.
While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.
These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance.
Rollatainers undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.
23 Contact Details:
Carnation Hospitality Private Limited
236 B & C, DLF South Court, Saket District Centre New Delhi – 110017 www.rollatainers.com
Rajat Agrawal +91 11 4936 0900 Carnation Hospitality Pvt. Ltd. [email protected]
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