Success Story – M Mahadevan: The Way of the Foodpreneur
Mr M Mahadevan, Founder, B&M Hot Breads Pvt Ltd., opens up on his entrepreneurial journey and the people who patronized his restaurants. He was at MMA to take part in a freewheeling conversation with Mr K Mahalingam, President, MMA & Partner/Director, TSM Group of Companies.
Mahalingam (Mali): MrMahadevan. You revolutionised eating out in Madras. You built your own brands and literally gave us our daily bread. That bread tasted very different from the bread we ever had before. You introduced us to tastes and flavours and cuisines which were of international standard. Some of those cuisines existed in Madras then but you took us to a level that we had not experienced before. Tell us about the early days and your journey.
Mahadevan: Before I started my restaurant business, I was a distributor of Bombay Oil Industry. I was born in the small town of Udumalpet, near Coimbatore in Tamil Nadu. I came to Chennai in the eighties with just 380 rupees in hand. I came to the Central Station. It was cold and I wanted to buy a coffee. It cost three rupees. I had no job and knew no one in Chennai. So, I decided not to spend on coffee.
I had been given an address by my brother to go and stay—a room in RK Lodge where his friend stayed. Unfortunately, that room was locked and for three days, the lodge owner allowed me to sleep in the veranda. I know how it’s to be homeless.
I believe that my mother’s blessing was always with me. Within a week of my coming to Chennai, I got a job in AM Jain College as a lecturer, with a salary of Rs 310 per month. I used to read a lot. Arthur Hailey’s book ‘Hotel’ inspired me and I strongly felt that I must work in a hotel. In the day time, I taught and, in the evening, I worked as a lobby manager in Sudarshan Hotel, which is now called Ambassador Pallava.
As the night time manager, I had to come at six o’clock and handle the bar. I got a stipend of Rs 250 from the hotel. While managing the bar, a gentleman would come from Paris Corner regularly, order two scotch and one beer and just like that spend Rs 600 every day. That was more than what I got in a month, in spite of my moonlighting. This man was not a tech guy or somebody who made semiconductors or things like that. All he did was to collect old plastic slippers, melt them and make plastic buckets. That triggered me to become an entrepreneur, so that I could make more money.
Mahalingam: How did Tic Tac happen?
Mahadevan: When I worked in the hotel, Mr Ali Sayed used to come there as a customer. My growth is mainly based on networking and connecting people. If I go on a flight, I’ll return with my pocket full of visiting cards. Ali Sayed was running Tic Tac restaurant and selling north Indian food. I had become a friend of a Chinese cook and so, I proposed Mr Ali Sayed if we could open a small outlet in his unit and sell Chinese food in the evenings. He agreed. I could not offer my Chinese cook any salary. So, I made him a partner in the venture. I invested all my savings made till then into that—Rs 60,000.
Mahalingam: When did the famous painter MF Hussain come to Tic Tac?
Mahadevan: Within two weeks of our opening the Chinese outlet at Tic Tac, MF Hussain came there and he liked our food. We were serving in the car, as parking the car on the road was very easy then. Nungambakkam those days was very different from what it is now. Hussain became our regular customer. He used to order sweet corn chicken soup. A few buildings away, Kakani towers was coming up. Mr Ramesh Reddy who was our customer at Tic Tac and who was constructing the building liked my enthusiasm and networking skills. He proposed to me that I can open a much bigger, air-conditioned restaurant with good ambience in Kakani towers and he offered me 30% share, without any investment from my part. I grabbed that offer and that is how I started Cascade restaurant there.
Mahalingam: Tell us about your introduction to Parameshwar Godrej.
Mahadevan: When MF Hussain displayed his paintings, Ms Parameshwar Godrej would visit them and she was a fan of his paintings. Through Mr Hussain, I could get connected with Ms Parameshwar Godrej. She did the interiors for our Cascade restaurant. Just opposite was the Golden Dragon restaurant in the Taj which had red and green colour theme. So, to be different, I went for blue and white interiors. The furniture was different. I brought in a chef from Malaysia. We didn’t sell only Chinese but sold Oriental. We offered Japanese food because we wanted it to be different from the dragon in front of me. A little fire from there, I would have got burnt out. I have to have my own identity. This is where thinking differently has helped me.
Mahalingam: How did Hot Breads happen?
Mahadevan: When I was running Cascade, I knew that I had to match Golden Dragon to be competitive. I had to give value to the customer. I could not import the ingredients directly. So my chefs and I would visit Singapore and on return, we would carry back some sauces. At that time, we had bakeries in Chennai like the Cakes and Bakes, McRennet, Bosotto Brothers and Spencers. I wanted to start a bakery in Chennai but all my six partners did not like the idea. They said bread is for sick people and I was taking a big risk, misguided by the success of Cascade. I wanted to make curry buns. In the eighties, Mr Parameshwar gave me the franchise for Hot Bread and I bought the machinery.
Mahalingam: Tell us about meeting Kiran Mazumdar.
Mahadevan: When I went to Singapore, I went to a bakery and was impressed by the superior quality of the bread. I asked the baker how they were able to make such silken bread. He gave me 5 gms of the improver they used and said the quality was because of that improver. I took that with me, went to Bangalore and met Ms Kiran Mazumdar of Biocon. The year was 1989 and she was not a big-time person then. I asked her if she could replicate that improver. Within a month, she developed and gave it to me and that is the improver we are using today. That is one of our success factors.
Hot Breads became a big success thanks to my different way of thinking. When everybody was doing bread in the factory. I brought the machine, put it in front of the customer and told them we were making breads in front of the people. We opened in New Jersey and New York. We opened in Paris. It’s 24 years and still my Heart Breads bakery in Paris is flying high. I’m not boasting but again I would like to highlight how I thought differently there. I took a croissant, filled it with chicken tikka masala and the gave the Frenchman his own croissant with my own filling. It became a hit.
Mahalingam: We are told many celebrities visited your outlets.
Mahadevan: Yes. Mr. Dhirubhai Ambani, Mrs Kokilaben, Ms Sridevi and many other celebrities had come to our outlets. I think it was because we were different, affordable and offered quality.
Mahalingam: What are your proud moments?
Mahadevan: I recall the day I landed in Chennai for the first time in the Central Station with 380 rupees in hand and unable to buy even a cup of coffee, on a cold morning. But many years later, in that same Central Station, I opened Planet Yumm in the food court and it sold 18,000 cups of coffee a day. The US Embassy called me one day and said a team of Starbucks people have come—5 from Seattle and 2 from Hong Kong and they wanted to know the magic behind my selling of 18,000 cups of coffee a day.
You need not be an Ambani or Adani to make an impact but you can be a simple Mahadevan. I can proudly say that I have created 5000 jobs in my journey of 40 years.
Mahalingam: What was that magic behind selling 18,000 cups of coffee?
Mahadevan: In Central Station, I took the space as a food court operator through a 2-part tender (Technical and Commercial). I took 1300 square foot space. This is where you realise why brands and quality matter in business. Because, the next door was 13,000 square feet space occupied by the VLR (vegetarian light refreshment) shop run by railways. Mine was one-tenth of it. We were doing a sale of 11 to 12 lakhs a day whereas they were doing a sale of Rs 30,000 to 40,000 a day.
Mahalingam: What is your advice to young entrepreneurs?
Mahadevan: When you start a business, there are two things which you always need – commitment and focus. You also need to dream big. My mother and father were simple people in Udumalpet which is not even a district headquarters. I always had big dreams. Once I started my business in Chennai, my next canvas was Dubai. When I went to Dubai, I wanted to go to Paris. When I went to Paris, I looked for the biggest canvas of New York. We opened three restaurants in New York. There is nothing wrong in dreaming big but you have to engage the gear of making that dream happen. You must work hard, have focus and do your home work thoroughly.
Mahalingam: You built a string of pearls bringing brands such as Haveli, Wangs Kitchen, Copper Chimney, Benjarong. Your experience with brands?
Mahadevan: Brands do matter. When Southern Railway came up with a tender for operating a food court in Central Station, they had put a condition that the food court operator must have experience in operating a food court. As I was already operating a food court, I was technically qualified in the technical bid and I was also successful in the commercial bid. I was given 1300 sqft space and they had allowed me 40 feet height. I created a mezzanine floor and rented it out for Saravana Bhavan, which is a big brand.
A2B was coming up in Chennai and asked them to open a sweet stall there, paying me a rent of Rs 65,000 per month. Mr Srinivasan of A2B said that it was a very high amount as he thought nobody would buy sweets in the railway station. My instincts told me that it is customary for Indians to buy sweets whenever we travel and meet our family members or friends. A2B instead suggested that they would offer me 10% of the sales as rentals every month and I agreed. The first day’s sales were 1.5 lakhs and in the first month, they paid me a rental of 5.5 lakhs. I always do my calculations and it is very important. We are running canteens through Sangeeta. A 450-gm meal is priced at Rs 90 and I have worked out the costing for each and every item and know that it costs Rs 44 per meal. It is very important that you get your maths right.
Mahalingam: How was your Dubai experience?
Mahadevan: When I wanted to go abroad, I first wanted to try out in Dubai. We opened a bakery in Dubai. It closed down in the third month because of lack of parking space and the rules there did not permit me to operate without parking facility. I did not wind up and come. I was like a rat in a box. I had 28 boys with me. I saw a supermarket coming up. I approached them and asked them for 600 sqft space, where my boys would make breads in front of the customers and sell them. I offered 10% of the sales as their returns. They agreed. It became very successful.
Mahalingam: What happened during Covid?
Mahadevan: In Covid, we took a lot of beating and had to shut down many outlets, as we can’t afford to keep throwing money on uneconomical outlets. We had to shut down 10 Saravana Bhavan outlets in Singapore. As investors in other brands, when it is not feasible to run a business, we tell the operating partners that we are pulling out and leave the option of running the business to them. Most often, they shut down as it is expensive to maintain the establishment. In fact, when we shut down a restaurant in Singapore, we did not have funds even to buy the flight ticket for the chef. We borrowed and bought his ticket.
Mahalingam: How did you survive the 2008 meltdown in the US?
Mahadevan: When the 2008 meltdown happened, we were hit in two ways in the US. Costs were going up and people were not getting their salaries. The neighbouring bakeries increased the price of sandwich from $3.8 to $4.5. But we maintained the price and also added one more layer in our sandwich. That triggered many customers to come to us, from the nearby bakeries.
Mahalingam: Can you talk about your connection with Saravana Bhavan?
Mahadevan: Mr Rajagopal (Annachi) of Saravana Bhavan was my very good friend. He died in 2018. I partnered with Saravana Bhavan till 2018 and invested in their business. After Annachi’s demise, I stopped investing. I am not looking into his personal life. But what I learnt from him was his passion for quality and the way he treated his employees. My driver is with me for 30 years. My chef at Benjarong is with us for 23 years.
When I had Hot Bread in Dubai, I used to visit many south Indian restaurants in Dubai and the quality of food was not good. I convinced Annachi to open an outlet in Dubai. When he opened after a lot of hesitation, it became a big success. In fact, it was the first of their overseas outlets. Apart from Saravana Bhavan, I had taken other Indian brands including Anjappar, Kailash Parbat, Cream Centre and Calicut Paragon abroad.
Mahalingam: You received an award from the then PM Mr Vajpayee.
Mahadevan: He gave me an award for entrepreneurship. When I met him during the award ceremony, he asked me, “What really makes entrepreneurs?” I was young then. I told him, “Politicians give fish to people but we teach them how to do fishing.” It was a very proud moment for me and a great honour to receive an award from him.
Mahalingam: You are giving a lot back to the society. Tell us about that.
Mahadevan: We started Winners with the Rotary Club of Chennai. Here, we teach people how to bake. The confectioner in Winners has six of his own units. He joined us as a dishwasher. In Puzhal prison, we set up a bakery, donated the equipments and trained them. We named the bakery ‘Freedom.’ We have opened a canteen partnering with TN government’s education department in College Road where we have 17 plus mentally challenged people. None of them has a home. The NGO ‘Banyan’ accommodates them. I pick them from Banyan’s home for the mentally challenged and teach them how to sell my favourite food- idlis and dosas. In Stella Marris and Holy Angels, we run canteens, employing single mothers and transgender people.
Mahalingam: How many outlets are run by you now?
Mahadevan: Today, we have 90 plus outlets outside India and 40 plus in Chennai. I have retired and handed over the baton to my son who fully takes care of them all.
Mahalingam: What are some of the major lessons learnt in your journey?
Mahadevan: You must have a goal to reach. You have to plan and do your homework. You must have a focus. As founders, we work with a lot of passion. The private equity guys look at the top line but as founders, we must be focussed on the bottom line. For a restaurant to be successful, infrastructure is very much required. So, before you open a restaurant, ensure the infrastructure there is adequate because people are going to visit the place. And finally, dream big. Have passion and think differently.