economies of scale – Pertinent Observations

Home food culture

We Indians have a “home food” culture. Most people consider it immoral and “bad” to eat out, and more so to eat out on a regular basis. People who don’t cook food at home are termed as being lazy. I remember this story I’d read in Tinkle back when I was a kid. It was called “kaLLa giriyaNNa” (it was a translation of a Kannada story). In this story, the thief (kaLLa) GiriyaNNa is scolded by his wife for his “dirty habits of smoking beedis and eating in hotels”. Yes, traditional Indian homes look down upon eating out that much!

Till very recently, this was a result of caste taboos. People would refuse to eat food that was prepared by someone by another caste, and that led to a delay in the growth of the restaurant industry. When people traveled (even on business, and you need to remember that in India even today, a lot of business happens due to caste networks), they would try and stay with a relative, or a friend who belonged to the same caste, and would eat in their house. When I was a kid, outstation holidays were mostly restricted to towns and cities where we had relatives, and in case we didn’t have any, durable foodstuff such as bread (from our “usual” Iyengar’s bakery), biscuits and fruits would be carried, so that we could avoid eating out.

Thanks to this cultural preference, and the taboos associated with eating out, we have turned out to be a “home food” society. Most people cook in their homes on a daily basis, or at least attempt to do so. In my mind, this is clearly inefficient. Back when I was in Gurgaon when I lived alone and would cook for myself, I discovered the beauty that is economies of scale in cooking food. The incremental time and effort in making (say) three liters of Sambar compared to making (say) half a liter was small, and consequently, every time I made sambar, I would make it in large quantities, and keep it in the fridge and repeatedly re-heat. While this may not be particularly healthy (the wife blames some of my lifestyle diseases to prolonged exposure to this unhealthy habit of eating stale food), there was little else I could do in order to achieve said economies of scale.

There is, however, a better method of ensuring economies of scale, and on a much larger scale – restaurants, and this is the practice followed in most places elsewhere in the world. Unfortunately, the taboo against eating out means that for most people, visits to restaurants are “treats”, and restaurants have adapted themselves to accommodate this. When people eat in order to treat themselves, their primary criterion is taste. When you eat something once in a while, you don’t really care about the calories or sugar or triglycerides it contains. Consequently, food in a large number of restaurants in India is tailored for this kind of an audience, and hence is not particularly healthy. The main complaint that people have against restaurant food – that it is not healthy, and that one cannot eat that every day, does have its merits, but has a background in the culture of eating out only for treats.

From a national efficiency standpoint, this needs to change. People are spending way too much time and effort in cooking their own meals. It is ok to cook once in a while, but spending an hour of your day every day in front of the stove is a colossal waste of time. The answer lies in good quality restaurants that serve food that is similar to “home-cooked” food, in terms of health factor and taste. If there is a good number of restaurants that start doing that, it will drive a number of people to stop cooking at home (the early adopters are likely to be DINK Yuppies).

In some ways, this reminds me of the Chennai auto-rickshaw problem that I’ve described here and here. Restaurants don’t want to give up on tasty food and go the “healthy way” because they’re not sure there’s enough of a demand for the latter. People are not willing to give up home food in favour of restaurants because the food is not healthy enough! Again, this needs a nudge. And you can see some efforts in this direction. Back when I was in IIMB, I remember having dinner once at this place called Bangliana, which served “traditional” Bengali food at a reasonable price (a Bong friend who accompanied me confirmed that the food was quite authentic and “homely”). In primarily immigrant-dominated localities (such as Koramangala), you see more such restaurants coming up, and that is a good thing. If only it can spread and we move to becoming a restaurant-based culture, precious man-hours (and woman-hours) are bound to be saved.

PS: If the provisions of the Food Security Bill imply that we move to a “ration” model again, it would mean a step backwards, where everyone would be forced to cook at home. Or maybe the act could be implemented differently.. Say you could partly pay at hotels using your “entitlement points”.. Anyway, that is an aside.

Tailors

In a little street called Narayana Pillai Street, off Commercial Street in the Shivajinagar area of Bangalore there stands a building called “Ganesh complex” which can be called a tailoring hub. There are some ten to twelve shops (forgive my arithmetic if I’ve counted too low) all of which are occupied by tailors who stitch women’s clothes, primarily salwar kameez and its derivatives. I don’t know if there’s much to choose between the stores, and I think it’s a question of “tailor loyalty” the way it’s practiced among beach shacks at Baga beach in North Goa.

The wife is friends with a tailor called Ahmed, who runs a shop called HKGN tailors in this complex. Till recently (when he took two weeks with a consignment) his USP was “one hour tailoring”, where upon receiving cloth and measurements, he would stitch your dress in about an hour. I hear that there are a large number of tailors in the vicinity (though not sure if they’re in Ganesh complex) who offer the same terms. In fact, I know a lot of women who travel to that area to get their clothes stitched both for the quick delivery and also for the network of tailors that is present there.

While waiting for Ahmed to deliver the wife’s latest consignment yesterday (the one he took two weeks with), I was watching tailors in neighbouring shops working. The thing that struck me was that there isn’t much economies of scale in bespoke tailoring. Each piece of cloth needs to be cut separately, in its own size, and there’s nothing that can be “batch processed” across different samples. Of course, there is tremendous scope for specialization and division of labour, so you see “masters” who measure, mark out and cut cloth, and “stitchers” who stitch up the stuff together.

However, across the city, except for the handful of tailors in the Shivajinagar area, the standard turnaround time for stitching seems to be about two weeks. And given the wife’s experiences (I usually buy readymade garments so not much insight there) it is a fairly disorganized industry and requires several rounds of follow-ups and waiting at the tailor’s shop in order to get the goods.

The economics of the industry (that there are no economies of scale) makes me wonder why the two-week-turnaround time has become standard in this industry. Isn’t the turnaround time solely because of inventory piled up at the tailor’s? Can the tailor not manage his inventory better (like say going a few days without fresh orders or hiring a few extra hands temporarily or working a weekend) and thus lead to much shorter turnaround time? Given the individual nature of the job, what prevents tailors from offering instant turn-around like the handful of people in Shivajinagar do? Or is it that bulk orders (one person coming with a bunch of clothes to stitch) mess up any “quick turnaround model” the tailors could offer?

There is only one explanation I can think of. “Sales” and “production”, for the tailors happens at the same spot (their storefronts). For “sales” purposes they need to be there all the time, though they don’t need to be actively doing anything. Hence, it suits them if production is also a continuous full-time process, so that the time they spend at the storefront isn’t all “wasted”. By piling up an inventory of orders, tailors are always assured of having something to do even if no fresh customers are forthcoming.

So as the wife’s experience with Ahmed has shown, the “quick turnaround” hasn’t been sustainable at all.

Cooking

I’m in the process of my weekly cooking. I’m making onion and potato sambar which should last me for about four meals – one tonight, and for three meals during the course of this week. I have been on and off the phone to my mother, as she has been giving out expert instructions from the other end of the other side (yes, this is a fighter sambar that i’m making). It’s almost done, and I’m waiting for the pressure cooker to cool down. There is a small 5 minute process to be done after that happens, and I’m good for the week.

I can’t help but think that our normal process of meal preparation (talking of india in general here) is plain inefficient. Cooking happens at least once a day, in each and every household. You have women balancing jobs, kids and at the same time tryign to find time to cook. Every day. Some people hire professional cooks, who again come once or twice a day in order to cook, and get paid a decent amount (I’m told the going rate for a Brahmin cook (yes, this market is segmented by caste) in Bangalore is Rs. 4000 a month). But then again, you need to be around when the cook arrives, occasionally supervise the cooking, and the quality of food churned out by most of these small-quantity cooks is not much higher than abysmal.

There is tremendous opportunity for economies of scale when it comes to cooking. For example, it takes exactly the same amount of effort to make 1 kilo of rice as it does to make 10 kilos of rice. It is a similar case with sambar, and rasam, and with most curries (even north indian curies) – apart from the effort involved in cutting vegetables which varies linearly with the amount of stuff to be cooked. Yet we choose to do it every day, in every house hold, sometimes up to three times a day. There is something wrong right?

There are two ways in which demand can be aggregated in order to exploit economies of scale – across days and across households. Indians in general prefer fresh food. Even after the introduction of the refrigerator a few decades back, a number of families didn’t buy one because they thought that would encourage consumption of stale food (I don’t have any such fundaes so I cook once a week). There are a number of people who insist that each meal be cooked fresh – I remember that my late father used to insist that at least rice be cooked just prior to each meal (he was ok with not-so fresh sambar, etc.).

Caste fundaes mean that eating out hasn’t traditionally been popular in India. Even nowadays, when you have a lot of people living alone, or with friends, there are very few people who eat out every meal. One look at the timings of the traditional eateries in Bangalore (MTR, Brahmin’s coffee bar, the various SLVs, Vidyarthi Bhavan) tells you a story – they are primarily breakfast and tea restaurants. MTR has recently (12 yrs back) introduced lunch nad dinner but had always been a breakfast and tea place. Most of these places would open from 7 to 11 in the morning and again from 3 to 8 in the evening.

Then there are more religious fundaes which encourage the cooking of each meal fresh – if you observe traditional people with sacred threads eat, you might observe that they do one small pooja with the rice and ghee before starting off. Would anyone want to do that with stale food? Again – similar religious fundaes have traditionally stopped people from eating out. Which is why we have the prevailing model of each meal being prepared in each household.

The problem with most restaurants in India is that they don’t serve home food. After all, they have never been the staple (i.e. every meal) source of food for people, so they have always tried to differentiate themselves from home food. The only restaurants that serve stuff that is made in a similar manner as in households are the small “messes” that operate in areas with a large concentration of single people living without family.

Going forward, I wonder if there is a market for restaurants which make food that is similar to what is made in households (of course it differs by genre, but within a genre it will be made similar to the way stuff is made in households), and which are not too expensive. They might operate on take-away or delivery model (i know that right now there are lots of tiffin-carrier providers, but they need to scale up significantly). They can exploit the economies of scale (both in terms of cost as well as effort) and provide home-like food for people who would otherwise want to keep a cook.

A good place to start this model would be areas with large concentratioon of single people, or double-income couples – something like Gurgaon. Would there be a market for someone who would provide hygienically made and tasty home-style north indian thalis at around Rs. 30 per plate? Economies of scale mean that this food is likely to be produced at a very cheap cost to the restaurant which will enable it to be priced cheap. The price point will also mean that people will eat there rather than hiring a cook to cook at home. Of course, there needs to be reasonable variety at every meal – which again means that hte restaurant should be reasonably big.

The problem with this model is it might not be feasible as a very small business. It needs to start off in a big way, serving some 1000 people every session – this is the only way enough economies of scale can be harnessed to make things cheap and also provide variety.

Assuming a couple of these start in Gurgaon and are successful, and the model spreads around the country. There is a good chance that a large section of the population will get out of the make every meal every day at every household model.