As a child, Satish Chamyvelumani was a frequent traveller on buses within Tamil Nadu. He enjoyed these trips with his family, but recalls the constant struggle to get food. Even a couple of decades later, when visiting his hometown Coimbatore on trips from the US, where he moved in 2000 as a student, Chamyvelumani and his family would not eat on the train, worried about the hygiene factor. That was his aha moment. If he could make available good food from trusted sources, he would not only be solving a pesky problem for hordes of travellers from India, but also creating a neat business opportunity for himself.
And not just a meal or two. The idea was to offer people multiple options of hygienic, tasty meals and in a process where speed would be of essence. This last insight, says 36-year-old Chamyvelumani, was based on his own experience. “I am one of those passengers who reach in the nick of time, just before the train pulls out of the station or the bus starts, so it was imperative that people shouldn’t have to deal with a lengthy ordering process.”
The result of that deliberation was the launch in Chennai in May 2013 of the first Foodbox by Atchayam Business Solutions, the firm Chamyvelumani set up to implement his solution. An automated restaurant that at the press of a button, serves hot, pre-packaged meals from well-known eateries, there are now two outlets in operation in Chennai, together serving close to 400-450 meals a day. By 2015, Chamyvelumani aims to set up six more across Bengaluru, Hyderabad and Chennai.
A quick bite
When Chamyvelumani set out with his idea, he knew technology would form the backbone of the venture and counted on his engineering background and experience as project manager at 3M to help. But that’s when he discovered that the technology he sought didn’t exist. It took the next three years for him to develop the technology and give concrete shape to the concept. In 2011, he roped in Ramesh Narayanan, a chartered accountant he had met through common friends, to oversee the operations in India while he remained in the US. The following year, Chamyvelumani moved back, lock, stock and barrel, ready to dive into Foodbox full-time.
The location of outlets and partner restaurants is a key part of the Foodbox business model. While the first was set up at the DLF IT Park, the second is at Koyambedu, Chennai’s busiest bus terminal. Atchayam’s Foodbox has also tied up with well-known local restaurants, including Adyar Ananda Bhavan, Aasife Biriyani, Moti Mahal, Amaravathi, Kaaraikudi and Mr Chow's, for different meal and snack options to make up the menu. “The customer response has been very good. It works well for us because we are increasing our sales without additional investments,” says KT Srinivasa Raja, managing director, Adyar Ananda Bhavan. “As the awareness about Foodbox increases, Atchayam should be able to scale operations significantly, bringing down costs even lower in the next couple of years.”
So, how does the team’s innovative machine work? After a customer chooses the meal from the touch screen and pays for it, the barcode inside the machine matches the right food tray with the order. It then travels on an automated conveyor belt where a device pierces holes on the cover of the tray, after which it goes into a microwave and comes out on the same belt piping hot. All this, in under 90 seconds. “Many people think this is a vending machine. But it is nothing like that. Rather, this is an intelligent restaurant,” says Chamyvelumani.
The meals come in packed trays from the respective restaurants and are stored at the back of the climate-controlled machine. At one go, the Foodbox can store up to 225 meals and can be restocked hourly. “We have an online monitoring system that sends alerts when stocks are low and keeps a watch on when the food is packed,” says Rajasekaran Mathuram, CTO. “Though the food trays come with an eight-hour expiry, we don’t serve them if they have been with us for more than six hours.”
Unbought food goes back to the restaurants; they bear the food cost while Atchayam is responsible for transport and packaging. Other expenses include rental for the location and the cost of the machine. Its revenue: a share on every sold meal. The average ticket size of a meal is ₹130, of which Atchayam gets ₹40 as facilitation fee. That doesn’t sound like much but the potential is immense, says Chamyvelumani.
Serving it hot
The firm is looking at IT parks and corporate offices, train and bus stations and high footfall areas such as food courts in shopping malls as possible locations to set up outlets. Atchayam has already tied up with online ticketing portal Ticket Goose, where customers can order food online and have it delivered to their seats. “We offer customers the same comfort that airline passengers have, of choosing from the menu and getting a hot meal at their seats,” says Ramesh Narayanan, CFO. The firm is also in talks with the railways to set up its next Foodbox at Chennai Central. “We are also looking to take the machine to trade shows and exhibitions,” says Chamyvelumani.
Now, Atchayam is working on reducing the cost of its equipment, which will help it achieve break even faster. Currently, store break-even at the operating level takes six to 12 months, depending on location and size. While the first machine cost the firm nearly ₹35 lakh to set up, it has since come down to ₹14-15 lakh. The aim is to lower the cost further to ₹10 lakh in the next year. Chamyvelamuni has also applied for a patent for the technology, both in India and overseas.
So far, Atchayam has raised ₹4 crore in funding from family and friends and a private investor in the US. Now, it is looking for its next round of funding; over the next two years, it will invest ₹4-6 crore to expand its presence, first across south India and then pan-India. That means reaching out to more cities and restaurants. “We see ourselves as facilitators for restaurant chains while solving an age-old problem of travelling families,” Chamyvelumani says.