Every time when I meet Sameer bhai from Jubilant FoodWorks, I always start by saying one more thing, hungry ho kya?
Sameer Khetarpal: Always. Always hungry for more and always thinking bold.
Let us introduce the company. 15 years ago, Jubilant FoodWorks was a franchisee of Domino’s Pizza. Now it is more of a food platform company with multiple brands, which is pivoting into food tech. What has changed and what will change?
Sameer Khetarpal: Fundamentally, our purpose has remained the same, which is that we serve joy. When a small little girl gets a pizza, she is happy and that makes her mother happy. That has always kept me going and therefore our purpose is to serve joy. What has changed is we are leading with more technology, greater purpose, but food remains the focus. Our food is no longer an addition to a menu, but a big platform.
I will give you an example. We launched Cheese Volcano, a blockbuster product, then we launched Cheese Burst in three new flavours, and today we tasted whole new cheese ranges of product. I genuinely believe cheese can be a Rs 1,000-crore platform for us. Similarly, chicken wings in Popeyes can be another Rs 1000-crore product. We are thinking about more platforms than just sheer menu additions. We are becoming more of a food and food technology company, but the purpose to serve with joy or serve joy on a plate, that remains.
The QSR sector in the last six to eight quarters has gone through a rough ride. But for the quarter gone by declared numbers, there is a marked improvement in your same store sales. There is a marked improvement in your forward communication. So, why are you growing and what are you doing so differently when others are struggling?
Sameer Khetarpal: The answer is more self-help. I understand there is a demand slowdown. However, in these tough times, we have done three things: we have doubled down on value. After experimentation, we launched free delivery. We doubled down on giving more cheese per product. The number one reason customers order Domino’s is actually the craving for cheese and the third reason is just sheer operations excellence. We deliver more orders in 20 minutes. When it is Diwali or New Year or Christmas, our store staff is available throughout the night. Whether it is Kumbh or Coldplay, we are present in both locations.
How many pizzas did you deliver in Kumbh?
Sameer Khetarpal: We have eight stores. Still, yesterday was the last day. I am still to take an account. It has far exceeded our expectations. I would have never imagined we will be selling so many pizzas at both Kumbh and the Coldplay event.Same store sales is the first benchmark on which numbers are judged. There is a big uptick, double-digit growth. After four or five quarters of flat growth from negative to positive, now it is in double-digit. Will it sustain?
Sameer Khetarpal: I genuinely believe so. And I am a big believer in compounding. We are acquiring new customers at an unprecedented rate, almost 2x what we were doing a year ago. Our pizza-eating frequency, which is about three in a year, has not come down and therefore, if this were to happen, our same store growth should be very high. As a category leader in pizza, our job is to grow the market and continue to gain share and we are doing both.
I introduced Jubilant as a company which is available on different platforms, from biryani to Chinese food to Dunkin’ Donuts, the global presence as well as coffee. But your dependence on pizza is still 90%.
Sameer Khetarpal: It is.Now that is good but that is also bad. I am sure that pizza demand will not be cyclical but isn’t the dependence on just one category risky?
Sameer Khetarpal: I think yes and no and what I would say is there are about 20,000 Domino’s Pizza outlets in the US. India has only 2,000 and we have almost 4x the population. There are 11,000 KFC in China in 1,000 cities. We are still very small.
11,000 KFCs!
Sameer Khetarpal: 11,000 KFCs.
One single brand in China has 11,000 stores.
Sameer Khetarpal: And adding 1,000 stores a year.
In the past, when there has been a slowdown, we have seen Jubilant reorganising their stores. Wherever there was duplication, you have cut those stores. But this time around, you are really going all in with store expansion.
Sameer Khetarpal: We are bringing technology and AI into our store operations. And what you see today is a replica of our store and this room or experience centre is called store.ai. Now store.ai does three things. One, it helps us expand our network. Second, it drives more revenue per store. Third, it drives more engagement and repeat per customer. All three metrics are done by store.ai.
As we stand today, we have a list of thousands of locations based on actual data usage of Domino’s customers who are not able to get Domino’s. So, we know where to open the next thousand stores. We already have a list. All we need is a right location at the right rental, we are ready to open stores.
Second is the revenue per store. Through restaurant co-pilot, what we are developing is an assistant for our restaurant managers so that they can focus on the front of the house, sell more pizzas. Their inventory management, rostering can be taken away.
Third is the delivery. For example, I am short of riders. Typically, I will shut down the store. If it is raining, I will shut down the stores. Now the tools and the AI are automatically reducing the polygons, shutting down one part of the area or one channel and as a result, what we are seeing is we are able to get far more from the store.
How much have you invested in AI?
Sameer Khetarpal: So, we have a total team of about 200 engineers, all in-house, who are developing these products but across channels, across platforms. So, it is a big investment for us and I cannot invest more in it.
What I am trying to understand is that, is the ROI, return on investment in AI, really going to help you because you are investing up front, the results would be coming backended. Are you confident that this investment will work for you?
Sameer Khetarpal: One of the reasons why Jubilant FoodWorks or Domino’s is not just the number one pizza company in India but also the number one QSR is because we always made bold investments in technology. We have our own app, the majority of orders and new customers come from our own app. When I came in, I invested the entire technology team into Domino’s app. I shut down all programmes to focus on this. It is paying off now.
We also built the rider management app in-house and it was all outsourced. Our loyalty was outsourced. Everything is now in-house and you see how our app is improving day by day. So, the ROI is definitely there and I genuinely believe store.ai will help us improve efficiency, prevent revenue leakages and make the restaurant managers life a lot simpler. Domino’s store in India has the highest throughput per store in terms of volume anywhere in the world.
