Amidst the challenges of the global COVID- 19 pandemic and the subsequent economic crisis, ISSO Restaurants have not only survived but thrived. In this interview, Apinash Sivagumaaran, Founder and Chief Executive of ISSO Restaurants, delves into the company’s strategies for success, and their mission to build a global Sri Lankan brand and automate kitchen operations through the use of robotics and AI.
How did your restaurant business navigate the pandemic and economic crisis while seizing international market opportunities?
The ISSO journey has been marked by significant challenges, including the global COVID-19 pandemic and the subsequent economic crisis, but despite these challenges, we’ve thrived. We attribute our growth to two key factors: adaptability and a steadfast focus on our business’ core values and objectives. While the pandemic and economic downturn presented short term obstacles, our sights were firmly set on the long-term vision of our business. During COVID, we seized the opportunity to refine the essence of our business, implementing comprehensive controls across all facets of our operations and gaining a deeper understanding of our business model to create a scalable foundation. Unlike many restaurants, which are driven primarily by the expertise of their chefs, we adopted a recipe-driven approach which allowed us to build a scalable and profitable restaurant model.
We also recognized a shift in demand from restaurants to supermarkets during COVID. In response, we swiftly pivoted our operations to produce frozen food products which led to collaborations with prominent supermarket chains both domestically and abroad, including exports to the Middle East and the United States. Our meticulous management of cash flow ensured the sustainability of our business during this period.
Simultaneously, we envisioned a future beyond the pandemic, anticipating potential challenges such as labour shortages and supply chain disruptions. Recognizing that international expansion could be a valuable strategy, we explored franchising opportunities. Our efforts extended to participation in franchise exhibitions in the Middle East, Southeast Asia and the Pacific region.
Can you discuss your current funding and your plans for financing your ambitious future growth?
Our journey commenced as a bootstrap venture with a mission to offer affordable dining options for the middle-income market. We decided to focus on prawns, a traditionally considered expensive ingredient, and priced our menu competitively, to major fast-food chains in Sri Lanka.
During our initial stages, we secured funding from a strategic partner who came on board before the onset of the COVID-19 pandemic shared our vision and supported our growth aspirations.
Our approach to expansion is founded on the profitability of our existing outlets. While fundraising plays a role in our growth strategy, we strongly believe in reinvesting profits to establish new outlets. This approach ensures sustainable expansion and aligns with our commitment to financial prudence.
Currently, our expansion strategy is centred around Southeast Asia and Australia, regions renowned for their substantial seafood consumption. To facilitate this expansion, we are considering a blend of self-funding and external fundraising. Over the next year, our ambitious plan includes increasing our presence from the current five outlets in Sri Lanka to 10, with the addition of at least one unit overseas. Looking further ahead, we aim to achieve a tenfold growth rate, envisioning a global network of 100 outlets within the next decade.
In the highly competitive dining and food and beverage industry, especially in Southeast Asia and Australasia, what sets you apart and enables you to scale successfully?
Our primary focus is on delivering exceptional products by meticulously sourcing the highest quality ingredients available. This commitment to quality is pivotal in retaining loyal customers who consistently choose our restaurants.
In the competitive market, our distinctive position is centred around our niche focus on prawns, setting us apart from competitors primarily offering chicken, meat, crab, or other seafood options.
Furthermore, our differentiation goes beyond just the menu. We actively pioneer the integration of advanced technology not only in our day-to-day operations but also in our backend processes. This forward-thinking approach is shaping the future of the restaurant and kitchen industry, making us a standout choice in the market.
How does the company’s expansion strategy align with its mission to build a global Sri Lankan brand?
As part of our mission to build a global Sri Lankan brand, our expansion strategy involves several key approaches. First, we are considering direct company investment in new markets, particularly in our outlets. Before proceeding with franchising, we aim to establish a strong presence by initially opening two or three outlets in a market, ensuring that our business model is successful and optimized. Once we have validated its effectiveness, we will explore franchising opportunities, replicating what has proven successful for us in these new locations.
The second approach centres on franchising, where we provide individuals or entities the opportunity to invest in and operate their outlets under our brand while leveraging the local expertise and support of our franchise partners. The third avenue of expansion involves partnership collaborations. In this scenario, we seek out the right partners within specific markets. These partners contribute local knowledge, support, and resources to help grow our brand in those regions.
We recognize the significance of understanding local tastes and preferences. While our core concept revolves around
prawn dishes from around the world, we are flexible and adaptive in our menu offerings. For markets like Asia, we introduce prawn dishes such as Singapore Chili Prawns, Rendang Prawns, Teriyaki Prawns, and Thai Red Curry prawns, aligning our offerings with familiar and preferred flavours in those regions. This localization and adaptation approach forms a crucial part of our strategy to succeed in these diverse markets.
Future-proofing restaurant kitchens & keeping up with trends
We believe that our ability to thrive in challenging scenarios hinges on our capacity to rethink and redefine our kitchen and restaurant operations. To this end, we are actively working on incorporating artificial intelligence (AI) to assist customers in making informed menu choices. Additionally, we are integrating robotics to streamline back-end kitchen operations and we are actively implementing these innovations today. In the coming year, our kitchens will evolve into semi-automated spaces, particularly designed to address the needs of first world markets.
This initiative is our proactive response to the persistent issue of labour shortages that have plagued the restaurant industry for years. By embracing automation, we aim to mitigate these challenges and ensure the efficiency of our operations, even during challenging economic times.
Furthermore, we are attuned to evolving trends in consumer preferences and the food supply chain. We have observed a significant shift in demand from red meats to seafood, with pescatarian diets gaining traction. Simultaneously, there is a growing emphasis on plant-based alternatives. In anticipation of these trends, we are actively collaborating on the production of plant-based shrimp and conducting experiments in this domain. While this may become a more pressing concern in the future, we are prepared to address it today.