the soup bar

8/4/2019 The Soup Bar

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The Soup Bar (TSB)

“Sip and Think, aloud”

Mohd. Akil Memon ( [email protected] )

Avash Patel ( [email protected] )

IIM Calcutta

mailto:[email protected]






Executive Summary

Mission

To grow profitably and have TSB outlets in at least ten locations by 2012

Vision

To develop a market for soup as a fast-food in these choice locations; and

To establish a strong brand image for TSB’s soups in the minds of consumers

Philosophy

To provide a unique eating experience to all soup consumers by using ambience and a

culinary treat which makes them come back for more.

Company Description

The Soup Bar Partnership Ltd. will be registered in Delhi. It will enter into the business

of providing middle ranged to premium soups to customers in an ambience suitable for

hanging out with friends. It will start its operation with its first serving store in Delhi with

its headquarter also located there. Gradually, stores will be openend in other locations

and it will be expanded into a full fledged chain of Soup Bars. It will be registered as partnership ltd. company with 2 partners – Mohd. Akil Memon and Avash Patel. TSB is

still in the Seed stage.

Products and Services

Our product offering will include soups with varieties ranging from the most common

– tomato, mushroom etc. to exotics like Gazpacho and Minestrone. Soups will be

served in an ambience similar to a Barista or CCD, to position it as a gathering/hangout

place for young crowd. In India, Soups are perceived by a majority of the population as

an appetizer and are taken before full-fledged meal. One of the major challenges that we

will try to meet is to change the perception of Soups in the mind of consumers from

appetizer to “a healthy fast-food”.



TSB will be well positioned to take advantage of the significant opportunities presented

by the rapidly growing fast-food sector. Between 1999-2004 the sector grew at a CAGR

of 19.4% compared to the average GDP growth rate of 6% with upper end products like

Pizza growing at the rate of 41.3% CAGR.

Target Market

Geographic location

We plan to have our first outlet either in New Delhi, Noida or Gurgaon. These are urban

areas with considerable consumer spending abilities which is required for a premium

service like ours. The high population density (no of persons per sq km ) of Delhi

(14000) and Gurgaon (800) also ensures large number of customers for our outlet. Delhi

and Gurgaon have a tropical climate with hot summers and chilly winters. The cold

winters will make soups a hot favourite in these areas.

Demographic characteristics

Our target customers would typically be men and women between the age range 15-45.

This would include college-goers, working executives, casual shoppers with an annual

family income of Rs. 300,000 and above. Single men and women working in new age

sectors such as IT , ITES, telecom etc with a significant disposable income would also be

our target customers.

Market size

The average daily number of footfalls in a mall in Gurgaon or Delhi is upwards of 50000.

Since in a fast food outlet footfalls are usually converted into purchases we can expect

the number of footfalls to be between 300 -500. An average bill of Rs 70 per customer

would translate into daily revenues of Rs 21000-35000.

Market trends

Some market trends in favor of our business proposition are:-

1. Demand for canned soup remains largely limited to restaurants. The traditional

mindset connected with most canned food – harmful use of preservatives – has



resulted in meagre demand for products in the canned format. Freshly prepared

soup would thus attract more customers.

2. Dehydrated soup continued to see strong current value growth of almost 13% in

2006. Rising health consciousness and the willingness to pay for a quality product

has driven this growth. This rising acceptabilty of soup augurs well for our

business.

The Competition

We don’t have any direct competition because the positioning of Soups as fast foods and

as a standalone food product will be first introduced by us. But, we will face indirect

competition from other fast food joints like Burger shops, Pizza outlets, Bakery shops,

Coffee chains and, Other Local and Continental cuisine outlets.

Apart from the continental outlets (which lacks market leader and any big brand) all the

other 4 competitor categories have well established brands and have segment market

leaders in them. Our competitors have grown at excess of 19.5% CAGR between 1999-

2004. One of our bigger competitors will be Nirula’s which has the highest market share

in branded fast food and has its operations in and around Delhi, Chandigarh, Punjab etc.

Competitive Advantage

First Mover advantage: It will be the first company to introduce the experience of tasty,

creamy and rich soups in an ambience that can be used as a gathering place. Its ambience

will be so designed, so as to make it acceptable as a center for socializing and intellectual

discussion, particularly among students and young urban professionals.

Variety: It will offer an extensive variety of soups ranging from the common varieties

like Cream of Tomato and Cream of Mushroom to exotic varieties like Gazpacho and

Minestrone.

The Healthy food: Most of the fast foods today are considered unhealthy because of

high calorie content in them which has led to people migrating towards healthy

alternatives like salads. Also, Coffees contain Caffiene which is not good for health.

Soups will provide another alternative to health conscious urban mass.



Marketing and Sales Plan

“Sip and Think, aloud ”

TSB’s slogan “Sip and Think, aloud” is designed to communicate 2 primary messages-

(i) that one can feel at ease in the bar, sip the soup at his own leisure and take the fulltaste of soup and can even make the surrrr…p sound while drinking their soups. (ii) that

they can take their time in the bar and think over issues, chat and discuss with friends etc.

This slogan will be prominently featured in all its marketing materials, its website,

bottom of email messages, soup bowls etc.

Operations

Key Operational Elements

The location chosen for our outlet is a mall in Delhi or Gurgaon. This location gives us

the advantage of reaching out to a large number of shoppers visiting the mall daily. Also

being in the heart of a commercial centre gives easy access to raw materials required for

our operation. Also transport facilities in such a place would be good making it easy for

our employees to reach the outlet.

For cooking we intend to hire a head chef and two assistant chefs. The head chef would

be a someone with significant experience of preparing a variety of soups. He would guide

the other two chefs who would be doing the bulk of the cooking. The assistant chefs

would probably be fresh hotel management graduates from a renowned hotel

management institute like IIHM, PUSA. The support staff would be around 9 in number

to service the customers, fulfill orders, clean utensils and tables etc. We intend to hire

additional 2-3 sales people to pitch our service to companies, get orders and deliver them.

Management StructureWe have developed our organization structure from a long term perspective. Given below

is the profile of the two partners, and the responsibilities that they will handle.



Mohd. Akil Memon: Interested in General Management, Akil took a balanced mix of

courses at IIM Calcutta and is an active member of the student community. His

achievements in co-curricular activities span across functional domains. He is also the

President of the Finance & Investments club, IIMC and member of three other student

clubs. After his engineering in Information Technology, Akil worked for ten months with

ERP major SAP at Bangalore and then joined IIM Calcutta to pursue his Post Graduate

Diploma in Management.

As CEO of TSB, Akil will look into the overall operation of TSB. He will also head the

team handling Store Expansion.

Avash Patel: Interested in finance and operations. Having done his engineering from IIT

Kharagpur in Instrumentation engineering Avash showcased his proficiency in numbers

by being a part of a number of a number of mathematics and physics olympiads. At IIM

Calcutta he took a host of courses in finance and operations. Avash has one year of work

experience in Infosys technologies Ltd.

As CFO of TSB, Avash will head the finance team. He will also head the operations

department.

In long term, we would look for a person specialist in marketing and sales who can share

our vision and head the marketing and sales department of TSB. Since, during initial

years, the number of stores will be very low (one in first year), Avash and Akil will

handle most of the responsibilities themselves. Akil will look into Marketing and Sales

and personnel management, while Avash will look into the operations and financial

aspects of the business.

Milestones

We plan to begin in one outlet in Delhi or Gurgaon in an area of around 1000 sq feet with

around 15 employees. With time we plan to scale up our business, open new outlets and

hire more people. Some of the milestones are-

1. Achieve revenues of about Rs. 10,00,000 per month from the first store by the end

of the year.

2. Open 1 more outlet in the country by the end of 2nd year and 3 more by the end of

the 3rd year. This would involve setting up a new team of a store managers, chefs

and support staff at each of the outlets.



Risks

The risks that the business might be exposed to in course of time are-

1. Five star hotels and restaurants may recognize the potential of this sector and

enter in a big way.

2. The acceptability of soup may not be as high originally perceived resulting in less

than expected revenues for the outlet.

3. The head chef or assistant chef may quit.

Exit Strategy

Once the company attains a large size we may decide to go public. This along with

unlocking the actual value of the company would also mean that the stock would be

easily convertible to cash in case any of the partners chooses to exit.

Other options for exit would include selling to another company (a hotel or restaurant

chain), merging with another company or buyout by another partner.

Financials

Based on an average footfall of 400 customers on weekdays and 500 customers on

weekends (the figure for McDonalds stores in India is 1000 on weekdays and 1200 on

weekends) and an average billing rate of 70 and 75 respectively (for McDonalds its 60

and 65) our EBIDTA per month comes out to be Rs. 170,000 ( margin 20%). Thus the

breakeven period for an initial fixed investment of Rs 30 lcs is 18 months.

Funds Sought and Uses

The Soup Bar is seeking Rs. 30 lcs in investment financing. These funds will be used

towards the initial fixed cost of setting up the first store in Delhi, and the promotion

campaign that will be needed to support it. One of the primary objectives of this

promotion campaign will be to change the perception of consumers about soup. This will

not be needed when more stores are opened in the same area which implies enormous

cost saving.

the soup bar

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