How Two IBA Graduates Are Transforming The Centuries-old Catering Industry

 

I was lucky enough to meet Sayem Faruk who is an IBA graduate and co-founder of Alpha Catering. Let’s hear from the founder himself about his journey.

 

How did you come up with the idea of Alpha Catering?

Back in 2015, my friend, Asif, and I were discussing about starting a business. Naturally, the idea of a food business came up because everybody has this fascination with food. Everybody dreams to have a cafe of his own or a restaurant of his own. We had a similar idea but we didn’t know where to start. So we decided to pick a sector which we can target and we ended up with catering because we felt that this is a sector where the scope for improvement was the most. There hasn’t been any innovation in this sector for centuries. It’s always the same food, the same menu everywhere. So, we thought this is a sector we can do well and that’s how the idea of catering came up. We had a few interested investors to invest in us and thus Alpha Catering was born. It was very casual. It wasn’t very premeditated or detailed. We just went with the flow.

 

What inspired you to start Alpha Catering?

The initial inspiration came when we went out to a popular restaurant in Dhaka where they used to serve really good pasta. We had the delicious pasta and but the following day we saw a post on social media that there were cockroaches in the pasta. Often, we see this kind of negative reviews on social media to the level that we have become normalized by it. So, we felt like maintaining hygiene should be a basic requirement for any food business and shouldn’t be a challenge for us. It’s something people deserve. It’s not some USP for business rather it’s the minimum standard that must be maintained. If you get your basics right, you’re good to go.

So, we conducted a bit of market research. We asked our seniors, people, we knew in the corporate world what is the one solution that they wanted? Everybody told us they wanted a healthy lunch because their offices don’t serve that. A lot of people said that and that’s what actually motivated us. Because we felt like that there was a gap in the market, so if we could develop the right product-market fit then we can be successful. And that’s what pushed us to start Alpha Catering.

But as we found out in a couple of months, our entire thought process and entire survey were wrong. If you imagine a company like a pyramid, we only interviewed the middle and the top management, not the bottom. The top and middle are the minority in a company. They are people with so much disposable income that they can effort to eat out in different restaurants every day. So yes, they would’ve bought our products maybe once or twice a week but not more than that. And that’s not very sustainable. So, after realizing that mistake, we pivoted and started serving basic lunch items rice, dal, vegetables, curries, etc. to cater to the masses and we were very successful in achieving that. Within two months, we were serving around 600 people a day. We’re serving in 14 different locations every day, including operations in Chittagong. It was quite challenging but our team did it very well. So, in summary, you could say that the inspiration was our idea and the wrong survey we conducted.

 

What is so special about Alpha Catering?

We try a lot of things. I would say we’re risk-takers. We don’t intend to serve the traditional food in the long-term rather we want to make them extinct. If you observe our trend: we started with healthy lunch, then office catering, then we exited the office catering segment and started doing events – you can see that we’re always pivoting and trying to adapt to the market and make the market adapt to us. And even after doing events for the past one and half years, we’re bored. Every other day we go, “Okay, we can’t do this forever. We’re making money but it’s not exciting.”

Alpha serves delectable traditional items alongside its multi-cuisine lineup.

 

So right now, we feel that in terms of differentiation in this industry, you need two things: one is your product differentiation and the other is your service.

We serve many products that are not available in traditional catering companies. Like we serve a lot of different cuisines from all over the world and some of the items we’re researching on are being made in the kitchen today as we speak. You’re in for a treat, Mohi! We’re also producing a lot of premium items that you can’t get in traditional companies. Like few days back we imported a new item called a chocolate fountain which you only see in five-star hotel but now it will also available for your house party. These are some of the ideas we’re working on.

Fuchka Shots and Shrimp With Mango Shooter – two of the popular items from Alpha Catering’s Premium Experience Menu

 

Your second point of differentiation is service. Because food, we believe, is something where everybody has a different preference. Somebody likes it sweet; somebody likes it salty; somebody likes it spicy. So, you find people saying that the food was good but you will never find anyone saying this was the best food of his life. Everybody has different preferences. But service is something that everybody can agree upon. After finishing an event if the majority of the guests say, “Yes, their service was superb!” then you know you’ve hit a six. Service to us means service in an overall holistic sense. Service is when you call us on our hotline number and we pick it up on time. Service is when we send the quotation in time. Service is when our communication was professional. Service is when the delivery personnel or the waiter/server wears his uniform properly. To us, all of these things encompass the meaning of service. It is the overall vibe and energy that you get from Alpha Catering. We’re in the hospitality business after all!

Tanim Ahmed Robin, one of Alpha’s star employees who embodies Alpha’s service values

 

So, for us, product development and service these two factors set us apart. And in terms of risk-taking, which I mentioned before, it’s our attitude towards this industry. We’re risk-takers and we will continue to venture out into territories where no one has ever been to.

 

What are obstacles have you faced to start Alpha Catering?

There were many. The initial days were really hard. One of the biggest obstacles we faced was attracting good talent. Someone like you would have never considered working in a catering company two or three years back. Trust me, you wouldn’t! Because your perception of catering was somebody doing his work wearing a lungi. If that was your perception then why would you work in a catering company!

An old photo of the original Alpha Team

 

The second obstacle was the expectation of the customer. Some clients don’t realize that if you want to maintain a certain standard, certain quality, certain hygiene, it costs a bit more. But people aren’t willing to pay that price. As a nation, and I am sorry to make such controversial statements, we’re not very hygienic. As long as our tummy is full, we’re happy. We really don’t care about the source of the food. Have you ever looked inside the kitchens of the wedding halls? You’ll lose your appetite if you did. We consume food from the roadside where dust is coming in and pollution is coming in but we don’t mind. We buy it anyway. As a nation our hygiene standards are really low. An average customer is just not willing to pay a premium for safe and hygienic food.

What are the challenges Alpha Catering is facing?

The main challenge we’re currently facing is that, among our three major markets, the wedding market has been the most difficult to crack. In a wedding, the decision makers are mainly the parents, uncles, and aunts. Generation X basically. They’re people who are really price-sensitive. They always want to “win” in price even if it comes at the expense of quality. They’re people who believe inexperience. So, they would want to give a once-in-a-lifetime event like a wedding to someone who has years of experience. Experience is something that we can’t fake. We’re just a three-year-old company. It’s a mammoth task for us to compete with 50-year old competitors. We’re less than one-tenth of their age but that’s not stopping us at all to take jabs at them!

Another controversial statement, but I have to say this. Generation X will eventually pass away and our generation will be the decision maker. When that happens there will be clear segregation in our industry. There will be modern, contemporary catering companies like Alpha and then there will be traditional catering companies owned by baburchis. When that time comes, people will see things differently. It’s a long-term play but we’re here for the long-term as well.

What are your future plans with Alpha Catering?

Our future plan is basically to become synonymous with the word “event”. Any sort of event that you may have: maybe a very small birthday party, maybe a mega-corporate event, maybe an elite wedding, anything basically, we want to be the first name that comes to your mind. Yes, we’re specialized in food now but we want to move towards four other areas.

One is the service. Basically, the waiters or servers. We’re actually working on a hospitality school to address the dearth of trained service personnel across industries. Then there’s the decorator business, which is basically the chairs, table, plates, etc. There’s the decoration business which is basically decorating the stages, the backdrop, the flower decor, photo booth, etc. There’s the photo-videography business. We don’t intend to become a market leader in all of the segments but these are the five core services that you’ll need for any event. So, we want to have sufficient capacity within ourselves so that we can pull it off. We actually do that now to some extent but we need to build more capacity in these areas by forming more strategic partnerships and making more investments.

As for future-proofing, we’re watching the market move online. A few days back we launched Alpha 360 (https://alpha360.co) which is the country’s first online events market place. You can shop for events online. Just like how you shop for clothes online, how you shop for shoes online, there will come a time you’ll shop for events online. We’re also turning our catering website into an e-commerce site. So, everything is moving towards digital. So, all in all, we’re trying to change this industry because this industry has been stagnant for hundreds of years. We’re trying to turn the rusty wheel and push it forward by introducing freshness into it.

 

Alpha 360’s simple and elegant homepage

 

What are your thoughts on the startup ecosystem of Bangladesh?

To me, the definition of startup is an experimental business model. Alpha Catering is not a startup. Our business model is a proven one: you order, we deliver, you pay. Alpha 360 is, however, a startup. It has a business model that we don’t know how will pan out. So, this you could call it a startup. We will spin it off as a separate company some time down the line.

As for the Bangladeshi startup ecosystem, I think it’s budding but we’re still in the stone ages of it. I personally feel that to sustain a flourishing startup ecosystem you need several key components. You need to have access to talent, you need to have access to financing, you need to have IP rights which is something that we don’t have here, and policy level support. All of these factors combine to create a vibrant ecosystem. I feel we’re very close to the tipping point. A lot of new people like you and I coming up with ideas and trying to change things. It’s only a matter of time now.

One example I would like to give is that of Silicon Valley. Silicon Valley is the prime example of a successful startup ecosystem. Because there’s Stanford University for talent, there’s always a pool of trained workforce. Silicon Valley’s reputation draws an ample number of risk-taking entrepreneurs to go there and try out new ideas. The IP rights, the policies over there support new ventures. In stark contrast, these things are very difficult in our country because even procuring basic infrastructure like electricity connection, gas connection, etc. is quite challenging. So, it’s really very difficult for new companies to even start. But when these issues get resolved, the entire ecosystem will leapfrog from its current nascent state.

Any piece of advice you would like to give to young entrepreneurs?

Most of the people I interact with are young and I have had the privilege to meet some very talented people in my lifetime. But most of them are not risk-takers. They want to play it safe. And everybody has this thought process that he or she needs to work for a few years, save some money and then use it to start a company. Which is okay, I guess. Which is not wrong at all. But I feel that youngsters need to take more risks. Their risk appetite needs to increase because unless you’re putting everything on the line you’re not going to be as invested as you would have been otherwise. What basically happens is that youngsters like you and I, we favor stability over risk. So that thought process has to change. Because even if you start your own company it is possible to get funding, it is possible to pay yourself a decent salary to survive in a city like Dhaka. Yes, it may not be as close to what your friends are making, but it’s enough.

You also have to be patient and yes you may fail but that’s what I’m talking about, risk-taking. It’s this very attitude that yields the highest return. Even in our company, a few months back, we were talking to an angel investor who was willing to invest at a valuation of 10x our yearly revenue. Imagine if you are doing a job and expecting such a return in 3 years! It’s impossible! So, there’s a monetary incentive to it as well. So, to summarize, have a higher risk-taking appetite. It is feasible to take that risk.

There’s another factor which is you get to learn like crazy. If you join a company, you will probably end up in HR, Finance or Marketing. Yes, you may know how HR works even though you’re in Finance, but unless you get down and get your hands dirty, you’ll never know how these functions operate. Once you start a company of your own, there are no departments, you ARE the HR, you ARE the Finance, you ARE the Marketing, you’re everything! And these are the experiences are that are invaluable, trust me. No company will ever give you that experience. It’s only when you do it all by yourself, you’ll understand the intricacies of a complex organism that we call a business.

In terms of personality, if you’re a curious person, you should try entrepreneurship. And the reason why I say that it’s because even in some of the biggest companies in the world, they’ve identified that some of the best qualities of an employee are qualities like resilience, problem-solving, teamwork, etc. These are all the qualities of an entrepreneur! So even if you fail spectacularly, you might end up in a very good company as a backup plan. If Alpha fails tomorrow, I’ve enough connections, enough skill sets, and enough confidence in my skills that I know that I’ll get a good job. I’m hoping that day never arrives but the worst-case scenario isn’t so bad. That’s the thing, you see. The perceived risk doesn’t exist! What’s the worst thing that can happen if your company shuts down? You will lose a bit of money and time. I would say you’ve learned a lot, so the time factor goes out. You lose some money but money is something you can always earn it back. So, the perceived risk doesn’t really exist. It’s all in our minds! Add to that, the societal pressures we get. When I mentioned starting Alpha to one of my teachers, she told me, “Oh, so you haven’t gotten any job offers yet!” But that wasn’t the case. I had a job offer from the CEO himself of one of the largest telecom companies in the country. And it was the type of job that graduates will kill each other for. But I turned that down and started Alpha.

Be bold. Be patient. Learn like crazy. Be a risk-taker!

 

Sayem Faruk is always available for helping those around him. You can reach him in the following ways:
Sayem Faruk’s Blog: http://sayemfaruk.com
Sayem Faruk’s Email: [email protected]

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