“Where there is a will there is a way.” Sagar Daryani, Co-Founder, Wow! Momo and his partner Binod Kumar have proven this statement to be true. A small business started with mere Rs 30,000, now stands at a staggering INR 230 crore valuation in just a few years of inception. It has been able to expand its wings across eight cities and 96 stores. The very first QSR format specializing in momos has expanded rapidly. In fact, the Quick Service Restaurant (QSR) format is one of the profitable of the restaurant segments. Find out how you can open your own Quick Service Restaurant here.
The Journey of Sagar Daryani and Wow! Momo
Sagar Daryani recently shared his journey and experiences of creating a new food brand from scratch with The Restaurant Times by Posist. Edited Excerpts…
How has been the journey with Wow! Momo so far? What was the idea behind it?
Sagar Daryani: We started Wow! Momo immediately after our college. Our journey has pretty much like Bollywood movie; we started our business with a mere Rs 30,000 and reached to a Rs 230 crore business in the last few years. During my childhood, I was more fascinated by brands. I used to draw logos of Nike or Addidas brand in my textbooks. Even during my college, I always had in my mind that I would not be able to pursue MBA because I am very poor at Maths. So, clearing entrance exams like CAT was not an option.
So, the question was what next after college. I always wanted to build a brand, and there is no better option than entering the food business to develop a brand. In the food business, everything works through word of mouth. Before momos, we thought of various concepts around paranthas. We realized people have played with burgers, pizzas, and continental food. But no one had experimented with momos, and that’s how the idea of Wow! Momo bounced in. There was a lady near my school where I used to go. So, she used to give the momos in 10-15 minutes, and that gives me the confidence that good quality momos can be prepared in a short span of time.
You started with a very low investment. How challenging was it for you?
Sagar Daryani: Yes, we started our business with a mere investment of Rs 30,000. We started with a small 6X6 sq ft kiosk; it was a retail shop format. In this particular format, you don’t need to make the flooring or ceiling; it was just a regular kiosk. However, we used bright yellow colors similar to the kind of the Bank Kiosks where do they do promotional activities like distributing leaflets and helping people understand their product.
My entire rent for the month was very low, and we shared 18 percent of our revenue. But seeing the rentals, I got confidence that the concept might click. At that time, we never had the money to print leaflets and didn’t even hire a full-time chef. We had a part-time chef who used to come in the morning and prepare momos for us. But, we had a full-time helper who would stand at the stall to sell the momos. Binod and I used to wear Wow! Momo t-shirt and go up to customers with a tray of momos for taste sampling as we did not have money for leaflets. I was confident that our product was good and after tasting momos, customers would come to our counter to buy a full plate of Momos. That’s how we marketed our brand and our product. We always had a product-oriented marketing campaign. At Wow! Momo we decided not to spend money on hoardings.
How many Wow! Momo stores you are operating currently?
Sagar Daryani: Currently, we have 96 stores across eight cities, operating across four formats, primarily kiosk, food court, high-street shop with 20 people capacity and high-end street restaurant up to 1000 sqft. We designed our menu and concept in such a way that our smallest kiosk of a 7X7 sq ft size generates revenue of Rs 12 lakhs per month. So operating in different formats gives us the flexibility to enter the right location depending on the size of the shop. This makes our model scalable and also the space to expand. Also, it helps to bring down the real estate cost. We have just opened a flagship store in Bangalore.
How long did it take you to build Wow! Momo?
Sagar Daryani: It has been eight years now. We started in 2008, on 29th August. We grew with our own money. Till the time we reach three stores, we had a revenue of Rs 19 crore with a little bit of debt. In 2015, we got a valuation of Rs 100 crore where we raised Rs 10 crore. We are also entering another round of funding where we are looking at tripling our valuation.
You have expanded rapidly. How do you maintain the food standards and consistency across all your outlets?
Sagar Daryani: During our expansion, we never raised funding because money was not the problem. We were doing well and knew that we would get the funding. But you need to have the right bandwidth. Talking about consistency, we kept our model very simple as we only have 15 SKUs (Stock Keeping Unit) with 12 types of Momos, one thukpa and three types of sauces. The 15 SKUs are prepared in the central kitchen and supplied to different stores. We have five base kitchens across eight cities, so we are only managing those five base kitchens.
Do you have any other concept in your mind for further expansion? Or will you stick to the momos?
Sagar Daryani: We have turned Momos into a complete meal. For the next five to seven years we will focus on Momos only. We want to become the first QSR company which is listed on the stock exchange. Further, we want to build an international brand like Domino’s, Pizza Hut and KFC.
You have been innovating new type of Momos for your customers. What is the ideal time to introduce new dishes or items on the menu?
Sagar Daryani: Innovation should not be done just for the sake of it but done depending upon the requirement of the business. Further, you need to learn on the go. India is a very diverse country, and you have to know the customers. You need to keep a few things simple and innovate and tweak at some parts of the menu. For example, we have a rice momos meal at Kochi which we don’t sell anywhere else. You have to adapt with time.
You are a competition with a lot of street vendors. What has been your pricing strategy?
Sagar Daryani: Yes, on the street you get momos for Rs 15, and we sell it for Rs 40. Pricing was a concern at the beginning. But ultimately, the quality of product and hygiene factor matters among other things. When you buy chicken momos on the streets, you get an onion momo. We focused more on our product rather than the pricing. When people can buy Pizza for Rs 700, people can spend Rs 100 for a good quality momos as well.
As told to The Restaurant Times.