Karan Kapur, Executive Director, Travel Food Services is in charge of all new ventures for airports and flight catering focusing on F&B opportunities within the fast growing travel sector. Karan, has led the expansion of TFS at Mumbai, Delhi, Kochi, Trivandrum and Oman Airport, as well as expanded into in-flight catering with Gate Gourmet. Karan is a graduate in B.A in Economics from Northwestern University, Chicago, USA as well as has a certification in Finance from the Kellogg School of Management.
Travel Food Services Limited (TFS) was conceptualized to target Food and Beverage opportunities within the fast growing travel infrastructure sector in India. TFS was created by the founder of Blue Foods, one of India’s largest F&B retail company. Building on Blue Foods market knowledge, strong network of over 140 restaurants, and success in assisting the set-up of F&B operations at Bangalore, Hyderabad and Mumbai airports, TFS was launched to transform the F&B landscape within large scale infrastructure projects such as airports, motorways, metros and railways, cruise liners and ports. The company’s mission is to provide transformative food & beverage experiences to passengers and an ideal working environment for employees and become the preferred business partner for landlords and F&B brands at various transport hubs.
Replying to Anil Mascarenhas of IIFL, Karan Kapur says, “We currently run over 100 locations in the travel sector and work with some of the best national and international brands and are open to financial partners should any significant synergy opportunities exist.”
Briefly explain to us your business model. Which are some of the brands that you manage?
Travel Food Services (TFS) is focused on food and beverage opportunities in the travel sector. We operate food and beverage outlets at airports across India in airports such as Mumbai and Delhi, and now internationally, in the Middle East. We currently run over 100 locations in the travel sector and work with some of the best national and international brands such as KFC, Dominos, Café Coffee Day, and Haagen Dazs to name a few, while also innovating and creating customized local brands for our landlords such as Cafeccino, Idli.com and so forth. We have now expanded into in-flight catering for low cost carriers through a joint venture with Gate Gourmet – the world leader in on-board services. We are already catering to over 500 daily flights of Jet Airways, under the name TFS-Gate brand name.
The aviation sector is among the worst hit in recent years. What kind of impact is it having on your business?
As a food and beverage group we have been in the business for almost 40 years, however TFS was formed as an independent entity as we believed that there was an opportunity in the travel sector (airports, railways, metros, highways) for a focused travel retail operator as the mindset and requirements of the industry are very specialized. The aviation sector in India is a long term story which is growing dramatically: airline travel penetration is still a small percentage of international standards and has a long way to go. Passenger numbers are strong and we are constantly working on innovation and engaging ways to excite passengers every time they fly to build the culture of eating at airports in India.
What are your expansion plans? How would they be funded?
In the near future we will be focusing on other large airports in the Indian subcontinent where opportunities open up. As of now, all our initiatives are being funded through internal accruals. As we progress, TFS has a well-planned growth strategy in place to also expand across highways, railways, metro stations and other travel ports – all with an aim to provide a new and innovative food experience to India’s diverse and evolving consumer base.
Which are the airports that you manage and how long does it usually take to break even?
We operate over 100 locations across airports such as Mumbai, Delhi, Cochin, and Muscat (Oman). Typically break even cycles are long term in this sector as operating in aviation is a specialized business which require significant back-end infrastructure and capital investment as well as specialized teams to manage it.
Brief us about your JV with Gate Gourmet. What does this bring to the table? How are the revenues shared?
TFS has entered into a joint venture with Gate Gourmet - one of the largest independent global providers of products and services related to a passenger's on-board experience - to provide in-flight catering and provisioning services to low cost carriers in India. The joint venture, has begun operations under the 'TFS-Gate' brand name, and focuses on developing innovative food and beverage on-board programs for low cost carriers across the country. This joint venture allows us to leverage the joint local and travel sector knowledge of TFS and Gate Gourmet to create a new and world class offer for people on the move.
What kind of revenues does F&B generate for the airports?
F&B is a growing and significant revenue generator for airports, and is a large part of the perception/experience builder for airports. A good food and beverage experience at an airport has a large positive impact on a passenger’s experience at that particular airport. As the sector is still at a nascent stage in airport, consumption is far below international standards, following which we have been able to drive significant consumption growth due to new and customized menus, designs and concepts to the Indian travelling consumer.
Which are some of the most popular customized outlets at the airport?
Idli.com is one of our outlets which has received an extremely positive response. We offer a variety of over 20 idlis which works on a cyclical menu, along with a host of chutneys and gunpowder. Our team of south Indian master chefs have created a unique and authentic flavour that provides a new and unique experience to passengers which was previously unavailable at airports in the country.
Any challenges in handling competing companies?
We believe that ability to deliver positive and recognized results at major operations at large scale airports such as Mumbai where we cater to over 30 million passengers a year supports our promise of transforming the food and beverage experience for travelers. We are excited to have alliances with some of the best brand partners in the country and an experienced management team which further enables us to leverage on our local operational experience and understanding of the Indian traveler.
Tell us about your international experience. Where are you present? How different is the spending habits in those countries?
At both Muscat International and Salalah Airport in Oman, TFS has successfully created a customised portfolio of branded concepts that cater to the local requirements of passengers traveling through those airports. The offer has been created keeping in mind the passenger profiles and diverse tastes and requirements of passengers using both these airports. We have opened a range of concepts which include an Irish Themed Bar and Middle Eastern Cuisine outlet through a partnership with the brand Automatic.
Brief us about your financials. What is the shareholding pattern of the company?
As we are privately held we would wish to not disclose our financial information.
Any plans to sell stake or get listed?
We are currently focused on expanding our presence across travel hubs across the region and are currently funding such expansion through internal accruals and/or leveraged funding, however are open to financial partners should any significant synergy opportunities exist.