The Sultan of Sambhar

By Shreyasi Singh

Photograph by Nitish Sharma

“First, you finish eating, we can talk after that,” announces Jayaram Banan in a firm voice as I fish out my note pad and voice recorder.

The interview with the founder and chairman of the Sagar Ratna and Swagath chain of restaurants can wait. His piping hot food cannot. For laid out on the table are some of the most popular South Indian dishes—the indomitable paper dosa, the aromatic filter coffee and an idli-vada combo with a platter of colourful chutneys—that have redefined the gastronomic preferences of the butter-chicken-loving North Indian. And, in the process, enabled Banan to stage one of the most dazzling success stories in the restaurant world.

As I ploughed through the dishes, washing them down sometimes with masala tea, coffee or even badam milk, but always under the observant eye of my host, I made a mental note that an interview with Banan could almost be off-limits for those with weak appetites—or on a diet. During the photo shoots that followed, he wouldn’t budge for an outfit change till he made sure our entire crew was stuffed to the gills.

“He is an incredible host,” begins K. Suresh, the affable chief financial officer of Sagar Ratna. “I visit many of our restaurants every week. But, going with him can be tough. He’ll pile food on to your plate; won’t heed a ‘no’.”

That Banan finds such personal joy in feeding people is probably what got Delhi-ites coming in droves to eat simple, vegetarian South Indian food at his restaurants. “Our first day sales were Rs 470. By our second month, people were queuing up to get in,” he says proudly of his first outlet in Defence Colony, then a quiet, leafy residential neighbourhood.

That was in December 1986. Cut to now, the queue’s still there, only it’s longer, especially on weekends and public holidays. In the years that have rolled by, the restaurant has outgrown its humble 40-seat beginnings to become a 255-seater iconic landmark that it is today. It still isn’t unusual to see customers hanging outside the restaurant for a good 30 minutes to get a place inside the eatery.

“When we started, I’d go to the Sai Baba temple on Lodhi Road every day. He’s given me everything I have. If I am in Delhi, you’d still find me there every day,” says the founder.

The prayers have definitely worked. Sagar (the suffix ‘Ratna’ was added later) revolutionised eating out in Delhi with quick table turnovers, clever pricing, impeccably neat, but basic interiors, and food that continues, till this day, to be delicious and surprisingly consistent. “Our sambhar is special. Everybody else makes it with moong dal. We use pure arhar,” explains the rather proud owner.

The restaurant also achieved another rare feat—it appealed to both the uppity-class diners as well as the office-going middle class. Today, it feeds over 2,000 people a day, and has a daily turnover of Rs 5 lakh.

What Banan has pulled off is even more striking if you consider that Sagar Ratna does not share an umbilical cord with any major Southern eatery brand. Its roots lay firmly in Delhi, thanks to its owners’ intuitive understanding of the market and culinary arithmetic.

“We have always concentrated on differentiating ourselves through personalised service. I have stood at the gate for years yelling out waiting numbers myself,” says Banan. His foghorn voice is a product of those days, he explains in his distinct conversational lingua, which is a mix of everyday Mumbaiya Hindi and learnt-on-the-go English, spiced with a definite Kannadiga accent.

Banan has replicated the winning recipe at Defence Colony several times over, successfully putting South Indian dishes on the nation’s culinary map. There are now 55 Sagar Ratnas across India. There’s an outlet in Singapore, too. And a couple of weeks back, they finalised a venue in Canada.

Nothing in his childhood, however, groomed him for such a success. The story of his early years seems to have come right off an eighties Hindi film plot. The son of a driver in Karkala, a small town 35 kilometres from Udupi, he ran away to Mumbai in 1967 when he was just 13 years old. “I spent the money my father had given for my school fees. He was very, very strict. I knew he’d thrash me hard, so I ran. That was the end of my formal education.”

A man he met on the bus ride to Mumbai got him a job as a washer in Hindustan Organic Chemical’s canteen in Panvel. Within three months, Banan moved up to become the tea trolley boy. Six months later, he was the supervisor. Over the next eight years in Mumbai, he worked several gut-busting shifts at canteens and even hawked shoes as a salesman for footwear brands like Bata and Corona.

“But, I didn’t want to do ‘naukri’ all my life,” recalls Banan, although he is thankful for what his jobs taught him. “In the canteen in Bombay, I used to be hit by the owner with his chappal. Those beatings have really helped. They made me work harder.”

He moved to Delhi in the early 1970s to join his elder brother. Together, they took up canteen contracts in Sahibabad, starting with Central Electronics. Luck soon shined upon them and big meal tickets like Tata and Dabur contracts flowed in. “We ran the Tata canteen for 18 years and Dabur’s Ghaziabad office canteen for 15.” Not satisfied with the miniscule margins involved in canteen operations, Banan decided to take a wide-angle view of the business possibilities. He moved to Bengaluru in 1981 after his marriage and opened Gangotri, his first foray into the restaurant business. He used the profits from his catering business to start up. Within a couple of months, he realised there just wasn’t enough footfall to make the business click. “South Indian vegetarian is a crowded market that side.” And so, while fretting over it one night, he decided to down shutters.

Another man might have been dismayed at this unfortunate turn of fate. But not so, Banan. He made his way back to Delhi and took up his first independent canteen contract at Danforce India, repeating his earlier run, this time by himself. His company continues to run three Moser Baer canteens in the national capital region event today.

“The canteen business is easy to bounce back into. You don’t need a lot of capital, just provisions. Plus, I already had a good reputation in Ghaziabad,” says the restaurateur, who lives in a plush bungalow with his wife and their six dogs in a Ghaziabad neighbourhood even now.

Opportunity soon knocked on his door. An herbal products store, located at Defence Colony, was downing its shutters. The owner wanted to finalise a quick lease on the real estate. And Banan grabbed the deal. “We bagged it at a weekly rent of Rs 3,250. And tables and chairs were part of the deal,” he recalls. Another Rs 5,000 in investment, and his restaurant was up and running. The deal was a hit and so was the first Sagar outlet. Delhi-ites lapped up the South Indian fare served at the neat small eatery, which provided great service at reasonable prices.

His second outlet at the well-known Lodhi Hotel took four years to come up. But, it upgraded Sagar’s positioning and heralded in a name change. “We couldn’t keep the same prices at a five-star hotel. That’s when we added the ‘Ratna’ to our name,” he explains. Initially, the Sagar Ratna outlets offered the same menu at 20 per cent higher prices.

He continued to grow organically, opening subsequent outlets in Malviya Nagar, Preet Vihar and Noida in the national capital region. By 2000, he had 13 restaurants. Annoyed at comments that he could only work the “canteen style” vegetarian food model, Banan took up the challenge to do something different. In 2001, he opened Swagath, a coastal, seafood fine dining restaurant in the same Defence Colony market, a few shops down from the original Sagar.

Despite its slow start, Banan managed to deliver another hit, this time adding a layer of culinary art to the basic South Indian fare. Swagath’s prawn gassi, fish fry and neer dosas gradually became cult hits. To ensure families with diverse, competing tastes didn’t get turned off, Swagath also loaded on to its menu staple non-vegetarian Delhi fare, Mughlai and Indian Chinese. The clever positioning was spot on.

“Because of the non-vegetarian menu, it has much better margins. Sagar has turnover, not margin. People spend more time in Swagath. Business has been good,” says Banan, who closed 2009-10 with a combined turnover of Rs 70 crore for Sagar Ratna and Swagath.

Earlier this year, he opened Swagath’s ninth branch at Hotel Janpath in Delhi. He claims it to be his most “sundar” restaurant and hopes the location will help him attract an entirely new kind of customer.

Both brands have routinely romped home with awards that celebrate great cuisine and innovative culinary thinking. And, year after year, they continue to be voted best in their category in popular food almanacs like The Times Food Guide and HT City Eating Out Guide. Banan, of course, credits his patrons for the exponential growth. “The customer is God for me. Even now, I stand at the door to welcome them. Most don’t even know that I am the owner. They often pass on a 10 or a 20-rupee note as tip.”

Having resisted the franchisee model for many years, he finally let go in 1999 with an outlet in Ludhiana. Now, more than 65 per cent of all his restaurants, Sagar Ratna and Swagath, are run as franchisee operations. “It’s faster growth. But there are problems. Maintaining quality is an issue. Our people have to be persuaded to go work in the franchisee branches,” he admits.

Industry observers, however, feel Banan has done a remarkably good job. Manu Mohindra, former chef of Machaan, The Taj Palace Hotel’s popular coffee shop, and now a hotel consultant who has helped set up several well-known Delhi restaurants, calls Sagar the only “corpotarised, McDonalised” South Indian chain in the country. “There could be a couple of franchises where you might feel the sambhar is off, but more or less, he has managed his logistics,” he adds.

Sagar Ratna’s CFO, K Suresh, thinks his boss’s intuitive ability to spot trouble has been the key. “He is prescient and can sniff a problem from far off.” Banan confesses to keeping a tight grip. “I call the Defence Colony branch at least 10 times a day. I know closing sales on an everyday basis for all our restaurants,” he says. When in Delhi, he usually visits at least 2-3 restaurants every day. On Sundays, he leaves home at 7am to undertake a record-breaking task of sorts—stopping by all his 27 restaurants in the NCR area. “There’s no traffic. I go ‘tak-tak-tak’. If I don’t do this, I feel my body is missing something vital.” The Defence Colony branch still remains the favourite. “It’s my life. I am there for the evening puja every day at 7 pm.” He usually grabs his lunch there too, eating quickly in the kitchen.

He’s back at the drawing board; this time, to take Sagar Ratna to 100 outlets across India and key overseas markets, such as North America, United Kingdom and South East Asia, over the next three years. It’s a model that is heavily dependent on the franchisee route.

It won’t be easy. And Banan knows that. “Every day 100 restaurants open, 200 close,” he says. “But, I have told my senior management I want this. They need to figure out how.”

“It can’t be done without him,” says KS Bhatt, director, Sagar Ratna and a trusted aide. “He’s invaluable for locations. We launched a few venues, like our outlet in Patiala, without him okaying them first. None of them have done very well,” adds Bhatt.

Mohindra shrugs this off. “As you expand, it’s important to have the will to shut down non-performing outlets. Banan will need to display that conviction. Dominos Pizza came down from 100 to 72 outlets. It made them more profitable.”

And, while he admits Sagar Ratna has no “real” competition in India, Mohindra cautions its incohesive brand identity could hurt its growth. “The soul of Sagar needs defining. Brand identity is a weakness. They have to work hard at replicating the look and feel.”

Banan agrees grudgingly when we put that to him. “I am learning from McDonald’s. It’s great how they have a constant look and feel. My restaurants are going to be renovated.”

That isn’t the only challenge in front of Sagar Ratna, though. With inflation, the cost of ingredients has been going up. However, the chain’s ability to pass on the price rise to the customer is limited by the fact that a product like dosa has a threshold when it comes to pricing. Therefore, margins look likely to be squeezed in the near future.

Labour is another problem. Fancier options, such as “BPOs and call centres” have led the younger generation away. And, “More and more people are going abroad for jobs,” says Banan. It’s almost strange that people should be a pain point for Banan. His easy camaraderie with staff, office boys, drivers and a retinue of personal security officers, is hard to miss. He is at once, an irreverent friend, an encouraging grandparent and a hard taskmaster. “Employees don’t leave him. Cleaner boys at the Defence Colony branch have become managers,” says Bhatt. “He grows his people. Many have remained with us right from the beginning.”

Banan is also banking on his 1,100-strong staff to perfect his ambitious flourishes. He is buzzing with new verticals. The excitement pushes up the pitch in his voice, his words gushing forth. Plans are afoot to grow Sagar Express, his fast-food, self-service, takeaway kiosks. There is already an outlet at the Mangalore airport and another in Gurgaon. Plans are in place to take their packaged snacks the “Haldiram way”.

Banan also wants to popularise other cuisines. He’s working on a Sagar Angandwadi restaurant, which will focus on Rajasthani and Gujarati food. A catering college in Noida is also in the works. “Students will work with us for five years after they finish. In turn, we’ll completely fund their education,” says he.

In May, Banan inaugurated Ocean Pearl, a three-star hotel in Mangalore that marks his entry into the lodging industry. It seems a natural progression for the business—putting the Sagar stamp on the whole package from food to lodging. “My ultimate ambition is to open a five-star hotel in Delhi. I love this city, even more than my hometown,” says he.

It’s difficult to believe that Sagar Ratna, still wholly-owned by Banan, is not actively looking at raising funds for its family dosa-sized appetite for expansion. It definitely needs Rs 200 crore to support the expansion plans, but are Banan and company intentionally keeping things under wrap? Is it our turn to sniff out a scoop? “The surprise for you will be that there are no surprises on that front,” the CFO asserts.

Banan laughs off the reported news on sale negotiations. “We always deny them. But, they keep appearing now and then,” he says of the buzz last year that Anjan Chatterjee who runs Mainland China and Oh Calcutta! was keen to pick up a 51 per cent stake in Sagar Ratna. “We are not in any mood for equity dilution. That might change in five years. I can only speak of now,” he adds.

This nonchalance notwithstanding, Mohindra says capital cannot but be on top of Banan’s mind. “No finance comes without cost. He’ll need to decide what cost he is willing to pay.”

That might be so. But, knowing Banan, he is likely to dish out the perfect recipe to suit the taste buds of the financiers, just the way he served the average North Indian with the perfect dosa and sambhar.

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