Goldman Munching Naan Marks Cafe Spice’s Quest to Feed America

In the cafeteria of Hurley Medical Center, in Flint, Michigan, a doctor walks up to the steam trays at the Cafe Spice kiosk, takes a spoon, and flicks two grains of rice pulao into his mouth.

He chews for several seconds, then walks to the other side of the counter and samples another batch. After careful deliberation, the doctor forgets the rice, takes two naan breads, douses his plate with mint chutney, and sits at a table with his colleagues -- doctors from India, Pakistan, Bangladesh, and Nepal.

All of them have been eating curries, biryanis, and other Indian staples every day for lunch and dinner since the Cafe Spice kiosk opened here last summer, Bloomberg Businessweek reports in its Feb. 6 issue.

“Before, we were eating a lot of mac and cheese,” groans Dr. Rao Mushtaq, a general practitioner originally from Pakistan.

“My first year here my cholesterol shot up dangerously high,” Dr. Vishwas Vaniawala, an Indian pediatrician, says. “Honestly, I used to skip lunches because I was sick of eating salads and sandwiches and chips.”

The South Asian doctors, who, as at many U.S. teaching hospitals, make up the majority of residents at Hurley, eventually demanded more familiar food from Steve Dunn, the cafeteria’s executive chef. While Dunn, an employee of the French catering company Sodexo (SW), had never even tasted Indian food, he made samosas, saag paneer, and chickpea masala from scratch.

Not Uncle Ben’s

“I couldn’t do it every day,” he says, even though doctors responded enthusiastically. “I mean, it takes a hell of a lot of time and knowledge. It took my staff three weeks to learn how to make basmati rice, because they were used to Uncle Ben’s.”

So Dunn turned to Cafe Spice, America’s largest Indian food-service company, which has a branded partnership with Sodexo, an Issy-les-Moulineaux, France-based company. Each month he receives a shipment of frozen Indian dishes that his staff heats and serves in a kiosk designed and installed by Cafe Spice.

What’s happening in Flint is spreading across the nation as Cafe Spice owners Sushil Malhotra and his son Sameer place their curries in supermarkets, hospitals, colleges, and corporate cafeterias.

Goldman, Morgan Stanley

Cafe Spice’s 17 current locations include Massachusetts Institute of Technology, New York University, and the New York headquarters of Goldman Sachs Group Inc. (GS) and Morgan Stanley. (MS) The company’s food is sold without the brand name in another 400 cafeterias and in more than 250 Whole Foods Market Inc. (WFM) stores.

In the past year, Cafe Spice’s revenue grew 40 percent, to about $20 million. While that’s tiny compared with sales at a food giant like McDonald’s Corp., which moves $20 million worth of product about every six-and-a-half hours, should Cafe Spice’s expansion continue, Sushil Malhotra may fulfill a dream he’s had for 40 years: To make his beloved Indian cuisine mainstream in the U.S.

“It could be as big as the sushi invasion,” he says.

Malhotra, 63, moved to New York from Bombay in 1966 to study engineering at City College, and later worked at Shell Oil and American Electric Power Co. (AEP) In 1970 he and his father opened a spice trading shop, supplying New York’s curry houses with spices, chutneys, and papadums.

Indian Fine Dining

When he and his wife, Lata, had American friends over to their house for dinner, the guests would ask him why they couldn’t get food this simple and fresh at Indian restaurants around town. Neighborhood Indian restaurants, their decor inevitably designed to evoke the Taj Mahal, tend to serve identical menus, often from a buffet.

“There was, and is, no professionalism to these places,” Sushil says in his Irvington, New York, living room, which has carved elephants, heaps of embroidered cushions, and a formal waiter serving onion bhaji. “They bastardized the food.”

To showcase Indian cooking, Sushil opened a fine-dining restaurant in Manhattan called Akbar in 1976, and another, Dawat, eight years later. He brought in cookbook author Madhur Jaffrey -- the Julia Child of Indian food -- to design the menu.

While Dawat was a critical and financial success, Sushil wanted to emulate what was happening in the U.K., where curry was supplanting fish and chips as the national food. He dabbled in other mass-market concepts, including a takeout spot called Curry in a Hurry, before opening Cafe Spice near NYU in 1998.

Grand Central

The restaurant, since sold, was revolutionary in its design and simplicity: a modern Indian bistro, priced between the greasy buffets and Dawat. A year later the company opened its first Cafe Spice Express in Grand Central Terminal. Sushil soon saw the potential to put these quick-serve counters where Indian restaurants had never ventured.

“Sushil’s at the cutting edge of getting the message out,” says restaurateur Drew Nieporent, who changed the image of Japanese food in America with his Manhattan restaurant Nobu. “By bringing Indian food to supermarkets and cafeterias, Sushil’s also made it more acceptable and accessible.”

American taste buds have proven resistant to curry’s charms. There may be more than one reason. Indian isn’t the prettiest of cuisines: A tray of chickpea curry doesn’t have the same visual appeal as, say, a California roll. Fairly or not, Americans also seem to associate it with indigestion.

In the 2011 survey of chefs by the National Restaurant Association, the No. 1 hot gastronomic trend is “locally sourced meats and seafood.” Indian food ranked No. 173, between absinthe and kimchi.

Bharath M. Josiam, an Indian-born professor of hospitality management at the University of North Texas, is confident, however, that a change in attitudes is underway.

The Mexican Effect

“Indian food is now very much in sync with major trends in American food,” he says. “Thanks to the proliferation of authentic Mexican restaurants and products, Americans are consuming a greater variety of spices and are more willing to try new foods.”

Brad Edmondson, a demographics consultant based in Ithaca, New York, explains why he thinks Indian food will finally hit it big in a video recently posted on the website of the Private Label Manufacturers Association.

“Ethnic food is successful when immigration combines with international travel and restaurants to create a buzz loud enough for food manufacturers to hear,” Edmondson says, holding up a plate of samosas.

This cultural exposure has directly affected America’s taste for Indian food. According to research provided by the Mintel Group, 13 percent of U.S. consumers surveyed in 2010 prepared Indian meals in their homes at least once a month.

More Like ‘England’

Sukhi Singh, founder of Bay Area-based Sukhi’s Gourmet Indian Foods, Cafe Spice’s main competitor, says her company recently introduced its frozen meals at a Costco Wholesale Corp. (COST) store in a Hispanic neighborhood of Los Angeles. She’s delighted with the results.

“I don’t think there’s barriers in any places now,” Singh adds. “It’s kind of snowballing, and, say, maybe in 10 years, it’ll be like it is in England.”

Cafe Spice’s food is prepared in a 50,000-square-foot industrial kitchen in New Windsor, New York, just up the Hudson River from West Point. Inside, more than a hundred workers fold samosas, fry potato pakoras, grind spices, and stir giant vats of curry.

“At the end of the day, I’m not making one batch for the University of Massachusetts, one for Goldman Sachs, and one for Whole Foods,” says Sameer Malhotra, 33, who runs the day-to-day business with his wife, Payal. “It’s all the same 300-pound batch, and the Indian grad student at Georgia Tech is getting the same spice level as someone in Tulsa.”

It’s the Spice

Spice is a delicate issue. It’s the main reason Americans will, or won’t, try Indian food.

“If I don’t spice it enough,” Sushil says he’ll get a call from someone who has been to India who’ll say “ This isn’t a vindaloo! If you say it’s a vindaloo, it better damn well be hot.”

Rather than lower the heat on its entire menu, Cafe Spice bases its dishes on four main simmering sauces. Malhotra says that variety is enough to satisfy 90 percent of diners. To cover everyone else, the company has installed condiment bars with chutneys -- the hottest being sriracha-spiked tomato --customers can add to taste.

Ghee-Free

That’s one of several adjustments the Malhotras have had to make to broaden the food’s appeal and streamline production. Curries are usually made with ghee, the clarified butter at the heart of Indian cooking; Cafe Spice is ghee-free. Using vegetable oil instead is cheaper, meets the low-fat requirements of Whole Foods, and opens up sales to vegans -- a key demographic.

While traditional Indian restaurants typically bake naan and roast meats in cylindrical tandoor ovens, the techniques are difficult to teach and thus too costly to scale. Instead, frozen naan is imported from Toronto, and the chicken tikka is baked in a convection oven.

The company’s chefs have begun experimenting with less- traditional fare, such as naan sandwiches.

“It’s catered to the global palate,” says Payal one morning in a small office at the processing plant. She’s taste- testing sandwiches -- potato with turmeric, chicken tikka, and crumbled paneer cheese with Monterey Jack. After she picks a chunk of green chili out of the paneer sandwich, she makes a note to have the workers chop the chilies into smaller pieces.

Entry-Level Naan

“If someone bites into that,” she frowns, “they might be put off our food for a while.”

She describes the naan sandwich as Cafe Spice’s entry-level item.

“To the consumer, it’s just another flatbread sandwich with a different filling,” says Payal. “People eat it, and then say, ‘This sandwich had chicken tikka in it, and I like that, so what else is comparable?’”

Sameer envisions 50 Cafe Spice-branded kiosks in campus and corporate cafeterias nationwide by 2016. The new locations will be designed to resemble a market stall, complete with faux-worn wooden trim. Customers will be able to build plates, bowls, or sandwiches around base entrees. It’s like an Indian version of the Mexican chain Chipotle Mexican Grill Inc. (CMG)

“I’ve tried everything,” says Sushil Malhotra, animating his words with a flurry of hand gestures. “This will be my final project.” Capturing the American appetite, he feels, is finally within reach. “It’s there, it’s there.”

Winning Over Nurses

At the Hurley Medical Center cafeteria in Flint, it’s clear Cafe Spice has won over Tracy Daviek, a nurse who had never tried Indian food until Cafe Spice opened this summer.

“I tried it on the first day,” she says, dipping a piece of naan into bhindi okra masala. “My favorite is the chicken,” she says, and turns to Steve Dunn. “You know, the one in the red sauce?”

“Chicken tikka masala,” Dunn says.

“Yeah, and the mango smoothies,” Daviek says.

“Lassi,” Dunn says.

Another nurse comes and eyes Dunn’s plate of chicken vindaloo.

“Hey Steve,” she says, “I don’t know what it is, but I want a taste of that tomorrow.”

To contact the reporter on this story: David Sax via Jim Aley at jaley@bloomberg.net

To contact the editor responsible for this story: Jim Aley at jaley@bloomberg.net

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