When Lehman Brothers in the US declared bankruptcy in the fall of 2008, the global economy went into a tailspin; markets collapsed; banks, businesses and even countries went belly up; firms that survived went through massive restructuring and cost-cutting, with luxury expenditure being the worst hit.
Closer home, Rahul Singh started getting the jitters at Golfworx, his indoor golfing facility in Gurugram, where one could play and learn, shop and lounge. By 2012, Singh had lost all his savings. “Between me and a couple of other partners, we lost about Rs12 crore in Golfworx between 2009 and 2012,” he says. “I lost all the money from my gratuity, provident fund and savings.”
His wife was not working and his parents had moved in with him. As the only earning member, he found himself at a crossroads: Should he continue with the business or start something new? Or should he find a corporate job, a path he had left seven years ago to become an entrepreneur?
Beer Café, therefore, was a leap of faith.
We are meeting over bad coffee and a good beer at the corporate office of BTB Marketing Pvt. Ltd, the parent company of Beer Café, in DLF Cybercity, Gurugram. Singh, 47, wouldn’t drink either owing to a bad throat.
“At Golfworx, I learnt that most people were not interested in golf at all. They were only there to socialize. Every time we had a golfing event, there was hardly any participation but when we had a single malt or a cigar night, there would be gatecrashers,” recalls Singh.
So Golfworx gave him the idea for a new business, but he had to decide on a format for people to come and socialize. “The idea was to have an Indian chain in café format that could scale globally,” he says. Food was off the cards. “There already were international food chains in India. And there is nothing international about Indian food. But coffee or even beer has a global appeal,” says Singh. And beer won because there were already coffee chains in India.
Singh mortgaged his home to start Beer Café. “I did not have proof that the format and the product would work. So I got Rs2.99 crore as loan against property, which became the seed capital for the business,” he says.
The first store opened in Gurugram in April 2012 and by the time the fourth outlet was ready, Singh had got his first angel investment from the S. Chand family; money that he says paid off the bank loan. In 2014, the Harsh Mariwala family became the company’s second angel investor. In three separate rounds of venture capital (VC) funding since 2013, the company has raised Rs65 crore from four VC funds.
“We have raised Rs78 crore since 2012,” says Singh. “This fiscal (FY2018), we will cross Rs100 crore in revenue. We will not be profitable at the company level yet, but we are set to make profit the year after.”
According to data available with the Registrar of Companies (RoC), Beer Café’s revenue touched Rs33 crore during fiscal 2014-15, from Rs13.7 crore the previous year. The company reported a loss of Rs11.3 crore in 2014-15.
Singh is also the president of the National Restaurant Association of India, the voice of the $4 billion (around Rs25,700 crore) Indian restaurant industry that represents more than 100,000 stand-alone restaurants in various formats.
He is up-to-date with the numbers: Beer Café is present in 13 cities across India with 50 outlets, 37 of which have liquor licences. Depending on the state where the store is located, they have about 80 beers from 21 countries. There are about 700 employees working across outlets and 50 more at the back-end. The attrition rate is “in decimal points”.
Singh would come across as a numbers geek but for the wall behind his desk and the music that plays without pause. The wall has four big framed photographs, all generic images, conveying his four passions: single-malt whisky, gadgets, bikes and jazz. A wooden rack that divides the office in two displays an assortment of glasses, mugs and beer bottles from various countries. A table behind his chair has photographs of his parents, son and wife Bineeta, who was once his boss.
“Bineeta was my boss at Liz Claiborne,” says Singh, “and right from Day 1, she hated me; we were people from the opposite ends of the spectrum. I am tech-savvy and she is not. She is brilliant with landscapes; in fact, every speck of green that you see around our outlets is her idea and I have no idea about it.”
Today, Bineeta is a director at Beer Café and is involved in the aesthetics of the outlets’ interiors. She also works closely with the chefs on food menus.
Singh, a hard-core biker, used to customize his bikes at a younger age. “The whole objective of my life was to have a great time; I was 23 then, a bachelor, living alone in Delhi, what else do you expect?”
Bineeta, however, came from a defence forces background, lived with her parents and was “appalled at the way I was wasting my life”. She, in fact, went to the India head at Liz Claiborne once and sought Singh’s removal.
But then, office romance happened. Within a year, the two married, in 1995. Their son, Madhav Veer Singh, 17, studies in class XI.
Singh, born in Jaipur, went to school in Ajmer. After finishing his schooling from Mayo College, he graduated in textile engineering from The Technological Institute of Textile & Sciences, Bhiwani, in 1992.
“After graduation, I joined the cutting department of Stencil Apparel in 1992,” says Singh. From there, he moved to the Liz Claiborne India liaison office in 1993 and then to Triburg before joining Reebok India, where he headed the apparel and sourcing business.
“Around 2006, Adidas took over Reebok, and, in that churn, I left the company,” says Singh. He bought the rights for Greg Norman, the New York-headquartered marketer and distributor of men’s sportswear, golf apparel and accessories, in India. That was his initiation into golf culture and the first taste of entrepreneurship.
He went on to create Golfworx in 2009. “I realized that if people have to start playing golf, it has to start from the grass-roots level,” he says. Golf is extremely expensive, club memberships difficult to come by, and people are not allowed on the greens if they don’t have a certain handicap. “How do you learn then?” asks Singh. Golfworx was started to bridge that gap. Its failure was a turning point.
Today, Singh lives a disciplined life. He used to run half marathons till he suffered a leg fracture two years ago. “Weekdays are like clockwork,” he says. The couple wakes up at 6.30am and then trains for an hour at their home gym. He reaches office by 10.30am and leaves by 8pm. “We eat dinner early and by about 10-10.30 we are off to bed,” he says. “We don’t watch TV much. The only show that the three of us watch together is MasterChef Australia.”
Weekends are about going out, meeting family and friends, eating out.
Though he is in the business of beer, Singh is a whisky drinker and a serious collector of single malts. “There would be more than 200 bottles of them at my house,” he says. His first taste of whisky was in 2000, when someone introduced him to Bushmills, an Irish triple-distilled whiskey. Today, he counts the Macallan 18-year-old and Balvenie Double Wood as all-time favourites. “And I love Monkey Shoulder in mixes,” he says.
Singh, bespectacled and sporting a stubble, is swamped with work after a vacation but is happy with the Secret Santa gift he got from office—a single-malt whisky.
Beer Café is a simple concept. There is a range of beer, a café environment and simple finger food to go with it. There’s not much that can go wrong. But even then, Beer Café and Singh don’t have much competition.
There are several reasons, says Singh. “Alcohol is taboo in India. Two, most of the people in the business are doing it for glamour. People don’t realize it is a serious business and a long-term commitment. Also, the entry barrier is high.”
India is a difficult country to do business in, says Singh. While we have some of the most expensive commercial spaces, sales remain dismal. “Another paradox is that India has one of the largest workforces but when you need the right people for the job, you won’t find them; employability is abysmal,” he says. And to top it all, we are also one of the highest —taxed countries in the world. Liquor is a state subject, so it is taxed differently in different states. So by the time a beer reaches a retail store, there is a “10x rise in its price from when it landed in India with freight plus insurance”.
But Singh has found a niche. Apart from the physical stores, the company also has an app and a cloud presence. A client can buy beer on the app and consume it in outlets across locations or even gift it to friends. Singh has also branched out into selling merchandise through the stores. In an interview in 2016, Singh had said that Beerosphere, the product retailing business, would generate Rs150 crore in five years.
What has he learnt from his different entrepreneurial stints?
“That you can’t keep creating a new or improved version of something that already exists. You have to find a new problem and find a solution for that,” says Singh. “There will always be a new problem. There will always be a gap in the market and a true entrepreneur will find that.”livemint