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Wat-a-Burger, a homegrown burger chain with 55 outlets in 16 Indian cities, was adding franchisees until the pandemic in March. Suddenly business was down and it had to act fast to reduce cash burn. Several outlets were shut down and shifted to locations with lower rent.

Another intervention that is helping is a SaaS product, Supplynote. “It is helping us manage our inventories across all the franchisees," says Farman Beig, co-founder and CEO of Wat-a-Burger. “Supplynote gives us a view on where supplies are coming from and how much is being stored. When the reserve inventory is crossed in the software, orders are placed automatically."

This streamlines ordering and reduces the inventory that needs to be maintained, with a better match to store sales. “Before covid, we held inventory worth 150,000-200,000 at each outlet. We have brought this down to 50,000 now," says Beig.

“We are a bootstrapped company. We didn’t have VC money so we had to focus on each and every thing."

Greater transparency

Apart from managing stores and inventory, Supplynote connects Wat-a-Burger with its online marketplace Adurcup that focuses on procurement of supplies for restaurants from multiple vendors. This creates easier availability, transparency in pricing and a seamless connection between supplies and store management. It mitigates one of the headaches in a food business, the proliferation of fake products, says Beig, because the source of a product is recorded.

Kumar Kushang founded Adurcup in 2015 after graduating from IIT Kanpur. He launched Supplynote last year to give restaurateurs a more holistic solution, apart from creating an additional revenue stream for the Noida-based startup.

This has turned out to be timely, even though the entire restaurant sector is still in the doldrums. Even if business is down, the need for tech is felt more acutely now which increases the pull for a product like Supplynote. Restaurants in India have been largely averse to tech, because it has been a cash-oriented business. But the pandemic has forced many to reconsider.

“Before covid, we were onboarding 60-70 users a month, but in August we onboarded over 100. September was even better. That’s a major improvement in adoption of our supply chain and inventory management technology," says Kushang.

Larger players have also started sniffing around on the procurement side. Restaurant discovery and food delivery unicorn Zomato launched a Hyperpure business arm last year. Hyperpure is an offshoot of Zomato’s acquisition the previous year of WOTU, a Bengaluru-based startup that was also in the sights of Swiggy. While Zomato’s B2B foodtech play got a fresh lease of life after covid disrupted traditional supply chains of restaurants, its arch rival now has a similar offering called Swiggy Staples Plus.

Supplynote is tiny in comparison, with seed funding and another round in the pipeline. But it enjoys some differentiators as a player focused on restaurant tech. Its integration of the supply chain with store sales and inventory data enables it to help restaurants as well as their suppliers.

Secondly, restaurants are in a love-hate relationship with the food delivery platforms. They’re increasingly dependent on them to reach consumers, especially after covid, but they resent the commissions and discounts they’re forced to fork out. Kushang feels they would be loathe to become dependent on the likes of Zomato and Swiggy for supplies too.

It’s early days yet for the positioning of tech players in the restaurant business. Food delivery caught all the attention initially with massive funding of Swiggy and Zomato which emerged frontrunners after several others shut down. Food supply chain on a B2B model emerged next to disrupt traditional distribution of farm and FMCG products. Now Supplynote and others are adding SaaS products to the mix.

No credit lines

A key change on the procurement side is the steep drop in credit available to restaurants from distributors after the pandemic as there was uncertainty and cost-cutting. This is creating a new culture of immediate payments for supplies, unlike earlier when restaurants could pay their suppliers from their sales offtake after a month or 45 days.

This helps platforms like Supplynote and the vendors on them. Restaurants too have become more cost-conscious and keener to use a platform for discovery of the right sellers to serve their needs.

Restaurant chains with franchises, like Wat-a-Burger, can also standardize their procurement across all their outlets on a tech platform, unlike earlier when each outlet sourced its supplies from local vendors. This helps the restaurant chain create brand value with standardized products, and provides more bargaining power due to aggregation of demand.

The Supplynote platform enables outsourcing services. For example, a Chandigarh company that supplies burger outlets in Punjab, Delhi and Uttarakhand, finds it easier to pay a small percentage of the total procurement value to Supplynote instead of managing its own deliveries. The platform can manage this efficiently even if there’s fluctuation in quantities for each supplier because it’s an aggregated play, where inventories and routes can be optimized. For a supplier or distributor, instead of fixed costs on warehouses, vehicles and personnel, they can have a variable cost based on demand, which has been fluctuating because of the pandemic.

Apart from Zomato and Swiggy, competition comes from the large B2B marketplace Udaan, one of whose verticals is food supply to restaurants. Earlier this year, it invested in Ahmedabad-based PetPooja, which provides PoS-based restaurant billing software. Here, the sales data of restaurants provides value to Udaan and the suppliers on its platform.

PetPooja too has seen an uptick in adoption in the post-covid scene. “September has been our best month ever, which may seem surprising because the restaurant industry has been in trouble. But that shows restaurants need more technology now," says Shaival Desai, VP at PetPooja.

The software creates efficiencies with inventories and online orders from aggregators like Swiggy. Besides, the move to become contactless has prompted restaurants to adopt QR codes for payment, which automatically gets synched with the POS software. Desai believes these changes of behaviour are here to stay.

Another startup providing restaurant management software is Pune-based TechMainstay Software. It helps restaurants with billing, QR-code-based ordering and inventory management.

The question is whether restaurants will feel more comfortable using tech from startups or gravitate towards the largest food delivery or B2B marketplace players.

Sumit Chakraberty is a consulting editor with Mint. Write to him at chakraberty@gmail.com

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