Page last updated at 12:31 GMT, Tuesday, 10 March 2009

Cash and Curry

By Maxwell Hall
BBC Money Programme

Curry on a plate

Curry is Britain's favourite food. And it's big business.

Curry houses, takeaways and ready meals make up an industry worth more than £3bn.

At least 18 tonnes of chicken tikka masala is eaten across the country each week, served up by Britain's 15,000 Indian restaurants.

But curry is not just big business in the eating out sector.

The British ready meal market is worth some £2bn.

Rival to restaurants

The undisputed Indian ready-meal king is Sir Gulam Noon, whose business sells more than a million curries a week through all major supermarket retailers.

Whilst profit margins have been cut, the recession has been good news for the company and sales are growing by about 5% a year.

One contributing factor seems to be that the company is taking business away from restaurants as people increasingly choose to stay at home as they tighten their belts.

"The economic climate is very bad," Sir Gulam says. "Let's not kid ourselves.

"But the grocery bill has gone up for the housewife. Our volume has gone up. Our factories are full."

Sir Gulam's packaged meals retail for as little as £2 and the company is even bringing out a ready meal packed up to look like a restaurant takeaway.

No curry chains

What does this mean for the traditional curry house?

Lord Bilimoria
It was always my dream to sell Cobra beer in India
Lord Bilimoria

Unlike other parts of the restaurant sector, which have large well-known and successful brands representing French, Italian and other cuisines, the Indian restaurant market is still a very fragmented.

Most curry houses are family owned and very few patrons have managed to expand beyond a few restaurants.

There are some successful stand-alone units as well as a few regional chains, but no-one has yet done for curry what Carluccio's, Pizza Express or Strada did for Italian cuisine.

Jon Lake, a restaurant analyst at Deloitte & Touche, says that curry houses "are stuck in a rut".

"Britain has large national brands based on most cuisines, but not Indian food," he says.

'Whilst other cuisines and brands have been innovating and changing, I think that the Indian takeaway, in the population's eating out repertoire, has not changed at all."

Beer bonanza

It remains extremely popular, though, and this has created other business opportunities, in particular for a product that has become synonymous with curry.

That product is beer.

Curry has become big business for brands such as Kingfisher, Heineken and Tiger.

But many traditional lagers can be gassy, which is not ideal with food.

Lord Bilimoria capitalised on the growth of curry houses in the 1980s and spotted a gap in the market.

Cobra beer was born.

It is now sold in 96% of Indian restaurants in the UK and last year it entered the lucrative pub market, helping it to reach sales of £43m.

The beer is exported to 50 counties, including India.

"It was always my dream to sell Cobra beer in India and our sales are without exaggeration growing at almost 100% year on year," Lord Bilimoria says.

High Street hope

For some, going out for a curry is still something that involves poppadoms, late nights and lager.

What was once seen as 'foreign' food is no longer classed as exotic or unusual

But one restaurant chain hopes to change that.

Tiffinbites grew up in central London and started out with ambitious plans for expansion across the UK.

Its directors believe they have the recipe to crack the problem with a new approach at offering curry for lunch.

"You're looking at a new, vibrant lunch experience that happens to be Indian cuisine," says company director Andy Varma.

"Our menus are light," he says.

"If you look at… our version of chicken tikka masala, you're looking at a very healthy, low fat recipe that doesn't sit in your tummy. It isn't full of cream and grease."

With this he plans to compete in the "quick-casual" dining market against the likes of Wagamamas, Gourmet Burger Kitchen and Yo! Sushi.

But if the business is going to become a nationwide success, it will have to challenge traditional views about curry.

Can the company persuade and re-educate the public that it is a light, tasty and healthy option for lunchtime?

And can it achieve that in an economy that the International Monetary Fund predicts will shrink by 2.8% in 2009?

So far the company has been successful.

It currently turns over £3.5m and has expanded beyond its four London restaurants.

But it is not all plain sailing.

The office of Lehman Brothers, the US bank that filed for bankruptcy last September, sits just around the corner from the Tiffinbites restaurant in the City.

Many who would have eaten there have lost their jobs.

Running a restaurant has never been easy and, these days, it is even harder.

"Failure rates in the UK run at about 15%, most other industries run at about 5%," says Mr Lake of Deloittes.

"I think right now it's difficult, and it's getting harder."

The deepening recession has forced the company to consolidate and recently there has been a change of management.

But the directors remain optimistic.

"As a model, [Tiffinbites] will sustain itself because it's casual dining,"insists Mr Varma.

The year ahead will test that.

Money Programme: Cash and Curry. Broadcast 1930, BBC2, Thursday 5 March 2009.

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