Exclusive | Zephyr Hospitality's Nagrath & Gulati on newly launched Firefly

Zephyr Hospitality has launched Firefly, the first watering hole designed as “an everyday, neighbourhood watering hole that is convenient, comfortable, welcoming and affordable.” The USP of Firefly is that it is poised as the first chain format for "everyday, neighbourhood bars, which are high on quality and easy on affordability". It is a typical place that lets you be, and does not" dictate" but "allows" you to be you. No pretences, just plain simple good life. The company is jointly promoted by Kushagra Nagrath, a veteran with more than 16 years of experience in the F&B space alongwith Gaurav Gulati, an Investment Banker with over a decade of experience and Tarun Arora, a serial entrepreneur.

Speaking to Adgully, Nagrath, Head of Operations & Development said, “Firefly as a philosophy is - "no matter what or how your life is, don't forget to shine and spread the light, even if for briefly. Enjoy your life and celebrate who you are." The core idea behind Zephyr is to do innovative formats in the F&B space, which are scalable, sustainable and profitable. Adds Gulati, CEO, “We are looking to develop and incubate such formats and then roll them out.”Firefly" - our first format of standalone bar should be ready by November mid and then we plan to roll out another 7 to 8 in 24 months.”

The ideal location for a Firefly would be a space that is between 800-1100 sq ft. This would allow the space to be more intimate. The company is not looking at huge spaces, with masses of people, without elbow room. Says Gulati, “A typical Firefly would cost us 35 to 40 lakhs to set up. The first one has cost a little more as we have some one-time costs. We are devising very strong processes to ensure we don't have cost over runs and a detailed mapping of product standardisation, alongwith a strong vendor / contractor relationships.”

As for growth plans, Nagrath says, “For the next 12 months our focus and concentration is on NCR. We have learnt from experience that it is very important especially in the F&B business to consolidate and then expand. This helps to create the management bandwidth, along with brand recognition and developing the standards, which go a long way in ensuring the continuous and consistent delivery of the brand promise, which in turns ensures guest satisfaction and profitability. We are looking at 5 Firefly's in Delhi, 2 in Gurgaon over the next 18-24 months. This is our focus over the next 2 years, but we are open to other cities.”

The total funding is around Rs 4 crores, the founders have invested their own capital as for now but going ahead may resort to a financing mix of internal accruals, debt and equity. Avers Gulati, “we have initially committed upto Rs 1.50 crores and already have investors within our network to put in another Rs 2 crores. The idea is to have low capex-high return models. So we will look at raising some external capital as and when required but not before 12 to 18 months.”

Additionally Zephyr is also working on a specialty vegetarian and a Mughlai restaurant concept, which shall be launched in the first quarter of 2013. Over the next 2 years it aims to focus on these 3 formats, and expand them within the NCR. Within the next 3 years it aims to go national, and create more such brands. Apart from this the company is open to ideas of partnering and bringing in new brands to India, in the smaller formats. It is already in talks with a few companies from Japan.

On its long-tem plans and vision, Gaurav says, “in the next 5 years we plan to be the market leaders in our chosen segment, with a strong reputation of being one of the most profitable and innovative F&B company in India. We are not here to create a lifestyle business, but to create a company which delivers value, quality, and experience to our customers and all our stakeholders, constantly and continuously.”

As for marketing & promotional strategy, Nagrath says, “we are going to be very heavy on viral marketing, to create the visibility and buzz. But eventually in this business the most important thing is "word of mouth" which is irreplaceable. We will invest in our patrons to ensure that we get the "VoM", but constantly giving them great experiences, and helping them build memories.”

One of the company’s aim is to be affordable. In this regard is says that as compared to a typical cost of Rs 2000 per head in a good drinking place, Firefly will give the customers the same experience at 30 per cent of cost i.e around Rs 600 per head. Says Nagrath, “the typical locations, great ambiance, music in good settings, and to top it all the easy on the pocket prices of liquor and snacks. The quality has not been compromised. We want people to come in and have a good time at a great place, which is high on design, service, product, but at a fraction of the cost of a 5 star or high end places in Delhi. We want the frequency of visits to increase, therefore we are approaching this not from just an APC angle, but from a volume angle.”

Like a good citizen the Zephyr Hospitality will also be taking CSR initiatives, after the first 12 months of operation. Besides it will be doing activities centered around F&B, for which it will be bringing on board varied partners (promoters / sponsors), to generate ads, and visibility. “But the true essence lies in "VoM" without which it is not easy to build the brand or loyalty, especially in this business,” concludes Gulati.