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Basil Al Salem - carving a niche in the Gulf's hospitality industry
December 17, 2016, 11:46 am
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The biggest surprise in meeting the entrepreneur behind Gulf meat eateries such as B+F Burger Boutique and Slider Station is learning that he is a recent adopter of veganism. Basil Al Salem — king of the juicy steak shawarmas on offer at Nomad Kitchen and the Coca-Cola-braised short ribs served up at Slider Station — went vegan earlier this year.

But this does not mean that he is going to enforce his lifestyle on customers who frequent the string of restaurants he established through his Kuwait-based company, Gastronomica.

“We’re only human, people cheat,” he tells Arabian Business in an interview in Dubai. “It’s rare to find people that are always dieting or always exercising, most need to find a balance. “That’s why, for me, veganism is a lifestyle choice, not a diet. Diets are hard to keep up.”

Veganism is challenging, though, the 39-year-old Kuwaiti admits. “I had dinner at La Petite Maison in DIFC [Dubai International Financial Centre] last night and of course it’s truffle season and the menu included goat’s cheese with white truffle — delicious. I thought, why does this happen now?”

Al Salem, who began his career at sovereign wealth fund the Kuwait Investment Authority (KIA), set up his first restaurant, Slider Station, in Kuwait in 2003 when the worldwide burger revival was at its peak. He had returned to Kuwait from studying finance overseas at the University of Denver in Colorado, and was disappointed by the lack of quality local restaurants in his home city.

Taking a cue from an American gas station in the 1940s, Slider Station is the first conveyor belt burger joint in the world.

The opening of Slider Station was followed by a series of modern, higher end versions of traditional fast food restaurants. Today, holding company Gastronomica has 15 restaurants across Kuwait, Saudi Arabia, Oman, Dubai and Qatar and 15 more in the pipeline scheduled to open in 2017 or beyond, in new locations including Bahrain and Abu Dhabi.

There are eight brands: food truck concept Nomad Kitchen; coffee and bakery chain BRW; B+F Open Flame Kitchen; B+F Roadside Diner; breakfast café Cocoa Room, ice cream restaurant Skinny Cloud, as well as Slider Station and B+F Burger Boutique.

The common denominator is the use of an inventive combination of ingredients, Al Salem says — from the aforementioned Coca-Cola ribs to the ‘Ninjawich’ breakfast sandwich at Cocoa Room, which comprises maple and chipotle candied bacon, French toast, eggs and sweet potato fries — along with artistic restaurant design to create a fun and interesting experience.

“Food is only part of what it means to be a restaurant operator,” he says. “I believe people are paying for the total dining experience. That’s why more and more restaurants are investing in tactile points like music and interior décor. These are the things that draw people in. Our ethos has not changed fundamentally since we launched.”

The approach seems to be working, with Gastronomica claiming to serve approximately 2 million customers in 2016 and scooping industry awards such as the Gold Award for Best New Retail Concept in 2011 for B+F Open Flame Kitchen.

Al Salem, who moved on from KIA to work as head of asset management of United Real Estate Company before founding Gastronomica, clearly enjoys thinking through what he does and achieving success in a calm and measured way, free of the egotism and rush of some entrepreneurs.

Slider Station also serves American tapas and deserts from an in-house chocolaterie.

He tells Arabian Business that he is preparing Gastronomica for the next chapter in its 13-year growth story — shifting its headquarters from Kuwait City to Dubai. This move, he says, is intended to help the company tap into the UAE’s globalised market and raise its profile on the international food scene.

It is the first step towards expanding outside the GCC — although Al Salem insists it is still early days and the weak economy is forcing Gastronomica to be more conservative in its ambitions.

“The low oil price is hitting consumer spending power and affecting demand so we have to be careful with our growth strategy,” he says.

“International expansion is on the agenda, albeit a longer term plan, and that requires that we reinforce our management team and move our headquarters to Dubai. It’s easier to gain a global profile from Dubai [than from Kuwait].”

Gastronomica employs 800 people across its restaurants (this is expected to rise to 1,000 by January 2017) and around 30 in its head office. It has one employee in a support office in Dubai’s Sheikh Zayed Road. Under the plans, an initial three staff would move from Kuwait to an expanded Dubai base, and the company would look to recruit new hires from international markets in due course, Al Salem says. The process of relocating the first three has begun and is expected to complete in the first quarter of 2017. “This first stage will be our springboard for global expansion,” he says.

Al Salem refuses to disclose financial information because the company is private. He says it recorded on average 50 percent year-on-year growth across its restaurants in 2015/16 — driven by sales and three new unit openings — but says this year’s growth is unlikely to be as strong as the average 20 percent recorded each of the most recent years, despite a targeted 15 openings by 2018.

“For 2016/17, the growth rate will definitely be lower than what we have seen in recent years because of the economic slowdown. And high rents are a [prohibitive] factor. The [retail] real estate sector has not yet fully adjusted to the slowdown; in many areas, rents remain at previous levels.

Operating out of a vintage 1973 truck, Nomad Kitchen travels Kuwait offering gourmet food.

“So for us it’s about quality control and sustainable growth. We don’t want to set definitive targets for unit openings; we want our growth to be gradual. We are looking at individual unit performance and intend to renegotiate some of our leases.”

Saudi Arabia provides the biggest opportunity for Gastronomica within the region, Al Salem says. The company already operates restaurants in Riyadh and Jeddah and plans to target the smaller, regional cities where population growth is driving demand for lifestyle eateries.

Al Salem also declines to provide detailed information about which brands are performing better than others, but hints that the burger concepts are seeing the slowest growth. It has been 15 years since Gourmet Burger Kitchen first opened in London in 2001, revolutionising the fast food scene with premium burgers and quality side dishes. It cannot necessarily be stated that the public has ‘burger fatigue’, but the market is certainly crowded.

“Burgers are the one area [of the restaurant scene] where we are seeing less demand — and I am not saying I am seeing this trend reflected in our sales, but it is what I’ve gathered from looking at the market,” Al Salem says. “There are two reasons for the drop. One is saturation of the market, and the second is growth of burger restaurants reaching a normalised level rather than recording rapid bursts of activity.”

With two of Gastronomica’s concepts focussed almost exclusively on burgers and at least two others featuring burgers or sliders on hearty carnivorous menus, is Al Salem concerned by this emerging trend?

“They only represent 30 percent of our total sales so we’ve managed to mitigate any downward pressure,” he claims, adding that the company intends to limit the expansion of Slider Station to one outlet per city.

Al Salem also dismisses suggestions that some of his concepts are in direct competition to one another, conceding that on the surface there is some overlap in menus, but the setting and ethos of each is different. For example, Slider Station’s design is based on the American gas station of the 1940s. It has ‘industrial chic’ interiors and was the first restaurant in the world to introduce the concept of serving sliders on a conveyor belt. The menu is largely tapas-style small bites.

B+F Burger Boutique, on the other hand, serves main course-sized meals and aims to offer an eco-friendly dining experience with recycled packaging and interiors made from natural materials.

Gastronomica is eyeing new concepts for the future but Al Salem is coy about revealing specific plans. He says there are two emerging restaurant trends in the region and beyond: health food — including vegan dining — and ‘experimental’ food, for example, pairing unlikely ingredients or introducing “exotic” or “antiquated” products to the Middle East. Al Salem cites duck fat chips and venison, considered by many as traditional English gastro-pub fare, among the sorts of culinary treats that are not yet abundant in the Gulf. It is likely the new concept will focus on the latter, but he says plans are in the very early stages.

“We’re thinking of one new concept, but the pure health food market contains too many risks at present,” he says. “We do want to develop healthy food in the GCC but the demand is not yet high enough to make an impact.”

Al Salem believes the Dubai restaurant scene has room for improvement — and not necessarily at the top end. He says he would like to see more, smaller eateries run by Emiratis.

“Having big names is not the be all and end all. Go to any city in the world and you’ll get a local chef. Here in Dubai it is mainly franchised brands. Of course that brings a certain set of standards to the market but there is no local element. Perhaps budding Emirati chefs are being pushed out of the market by high rents, whereas the global chains can afford expensive real estate.

“It’s a vicious circle, because in order to be called a chef you need to work your way to the top. But there are few opportunities for young Emiratis to do this, as the top global restaurants in Dubai will typically choose staff that have already made their name.”

With a solid 15 years of growth behind it, Gastronomica arguably presents an exciting acquisition opportunity for a larger restaurant company or investment firm. But would Al Salem be happy to sell?

Gastronomica currently has eight dining concepts, including the popular Cocoa Room.

“We’ve had some interest from equity funds and have held talks but they concluded without a deal,” he says. “We have enough cash for the next one-two years so any sale is a longer-term plan.

“We don’t want to be any more aggressive right now due to the economic slowdown in the region. We want to evolve gradually.”

However, one idea Al Salem says he is exploring at present is a possible expansion into the hospitality industry. He says the skills involved in running a hotel and running a restaurant are similar, and that he has perceived a gap in the market for a well-designed, unique hotel concept that differs from the franchised model he says is too prolific in the food and beverage (F&B) business.

Internal discussions have been held within Gastronomica but the idea is in the early stages and the company has yet to explore the market in any proactive manner, he says.

“We could potentially break into the hotels market. There are so many franchises but nothing local. And we understand hospitality. We understand service, design, food — these are the fundamental parts of running a hotel, as well as the housekeeping. So the operational complexities are not that different.

“However, looking at the market right now, it’s not a good time. It’s all about the timing.”

For the time being, Gastronomica looks set to continue its growth trajectory with a steady trickle of new openings across the Gulf. But fast forward a few more years and the company could bring some fresh and exciting fare to the global dining table.

Source: Arabian Business

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