Opinion
Nirula's life holds striking lessons in India's business and economy
Summary
- Deepak Nirula of Nirula's restaurant chain — a man much ahead of his times — should have been celebrated during his life, not after his death.
Social media has been awash with outpourings of grief and nostalgia after the passing away of Deepak Nirula, co-founder and, till he sold the business to the Malaysia-based Navis Capital in 2006, co-managing director of Delhi’s iconic fast food restaurant chain Nirula’s.
For generations of Delhiites, Nirula’s was their first introduction to American-style fast food and ice-creams, long before global quick-service restaurant (QSR) chains and ice cream parlour chains like McDonald’s and Baskin Robbins set foot in India.
Nirula pulled off the almost impossible trifecta of the QSR business – standardised menu and quality appealing to the traditional palate as well as a younger demographic hungry for new experiences; quick turnaround times; and affordable prices.
Consider the number of firsts he pulled off. Nirula was the first to provide an American-style ice cream parlour experience in India, offering a range of as many as 21 flavours – a far cry from the standard vanilla, strawberry, chocolate and cassata offering of ice cream brands in the country at the time. He also was bold enough to expose Indians to then untested concepts like ice cream sodas and sundaes. Iconic Hot Chocolate Fudge Triple Sundae of Nirula’s remains a bestseller to this day, nearly half a century after it made its debut.
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At a time when the idea of self-service or standing and eating were concepts alien to Indian restaurant-goers (other than those who patronised roadside eateries), Nirula not only introduced it but made it a success in an upscale shopping area like Delhi’s Connaught Place, till then home to upscale restaurants with liveried wait staff and snowy napery.
He was the first to capitalise on the value of word-of-mouth promotion, quickly scaling up from a single location to a branded chain which even today, after the chain has changed hands multiple times, manages to exist in multiple cities in 70-odd locations.
Even more remarkably, Nirula managed to pull all this off during a time when India was still in the austere grip of planned socialist development, an India where consumerism was frowned upon – the first Nirula’s opened its doors barely a decade after the late Lal Bahadur Shastri had asked Indians to skip a meal once a week in order to conserve the country’s food resources ravaged after the 1965 war with Pakistan.
Even more remarkably, all this happened at a time when the services sector was not even recognised as an important contributor to the economy. The Economic Survey of 1976-77 – the period when Deepak Nirula returned from Cornell with a hotel management degree and, along with his cousin, converted a leased space near the family’s hotel in Connaught Place into the first Nirula’s – does not even mention services in its report on the economy, although World Bank Data shows services contributed about 34 per cent to the GDP that fiscal (it’s over half the economy now).
The focus of that Survey was on declining industrial position (growth had plunged to 0.3 per cent the previous year), rising prices and increasing industrial sickness. To pull off a service business in such an environment, when the policy focus was on industry and manufacturing, is even more remarkable. And when one considers that banks viewed services with suspicion and focused mainly on ‘priority sector’ lending to agriculture and industry, it becomes near miraculous.
In any other country, Nirula would have been an iconic business hero. Nirula’s would have been the subject of innumerable case studies and its story taught in business schools. We might even have had a Nirula’s Museum – on the lines of Coke’s museum in Atlanta, where tickets at $35 a pop have to be booked in advance, and Nirula would have been a social media star, with millions of followers.
This is not to say that Nirula’s was an unalloyed success. Its failures hold valuable lessons for policy makers and entrepreneurs alike. The failure of Nirula’s to capitalise on its fan base while adapting to changing demographics; its inability to fund growth and refusal to adapt newer ideas like franchise-led growth, as well as its dependence on leased properties which led to loss of prime locations; and above all, its inability to compete with agile global competitors like McDonald's, all led to its fading allure and should be the subject of study in themselves.
But this does not detract from his considerable achievements, which should, ideally, have made him a folk hero, much like the late Dhirubhai Ambani was to a generation of first-time stock market investors a decade later. That he wasn’t, and was virtually unknown to generations of post-reform Indians shows that we as a country are yet to overcome our deeply-ingrained prejudice against ‘businessmen’. True, we celebrate our Ambanis and Adanis and the Bansals and Byjus of the start-up era – but that is more a celebration of their wealth rather than their business acumen which created that wealth. Prime Minister Narendra Modi’s 2019 appeal to respect wealth creators: “Let's never see wealth creators with suspicion. Only when wealth is created, wealth will be distributed" – continues to largely fall on deaf ears.
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