Wild Peeta
The Challenge of Scaling
A study of Emirati restaurant Wild Peeta
Written by:
Noha Saada
El Khazindar Business Research and Case Center
July 2013
art of a series of case studies on Entrepreneurship and Social Entrepreneurship,
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developed in cooperation between KCC and Aramex, and published by Wamda.
Published by
Introduction
Wild Peeta is a Dubai-based restaurant that puts a twist on traditional shawarma. The owners,
brothers Mohamed and Peyman Parham Al Awadhi, serve an alternative to traditional Arabic food
that focuses on fresh ingredients. Rather than operating a takeout restaurant that serves “fast
food,” they believe in serving healthy food swiftly. They have faced setbacks while attempting to
grow their business: though they originally planned to expand throughout the Gulf during their
first 5 years in operations, they have temporarily closed down all of their locations. The owners
- driven by their passion, love of food, patriotism, and social consciousness - plan to apply the
lessons they learned from that experience as they carry forward their business venture in 2013.
Background
Dubai is a cosmopolitan city with a large culturally-diverse expatriate population. The business
culture has created a large market for restaurant meals. The food service industry grew 11%
in 2005 and 2006, and it continued to grow at 6% in 2011. Fast food restaurants abound on
streets, in shopping malls, and gas stations. Drive-through restaurants are also popular.
Wild Peeta is the first Emirati international fast food restaurant. Its Emirati owners, Mohamed
and Peyman Parham Al Awadhi, were inspired to found the business in 1997 after wondering why
typical shawarma sandwiches only come with two sauces: tahini or garlic-mayonnaise. They
envisioned the possibility of diversifying the offerings to include Italian, Indian, and Thai sauces.
This formed the basis for the Wild Peeta concept.
The fast food market is mainly dominated by international franchise chains like McDonald’s,
KFC, Burger King, and Subway, which are well-established and have access to large marketing
budgets as well as a well-known brand.
A few local businesses have also emerged. Independent operators include Japanese, Chinese,
Indian, Mexican, Persian, and Arab self-service and table service restaurants, many of which are
long-standing, established businesses.
Wild Peeta also competes with other international and dine-in restaurants for “share of stomach.”
These are considered indirect competitors because they offer a different dining concept from
Wild Peeta’s, sit-down meals instead of food on the go.
Product
Wild Peeta’s vision is to introduce its customers to creative local alternatives to typical foods.
The restaurant offers two main menu items: shawarmas and salads. For shawarma sandwiches,
customers choose the bread, the sauces (tahini, garlic-mayonnaise, Indian makhni, Thai satay,
Mexican pinto bean, Italian margarita, Italian alfredo, and Khaleeji saloona), the main filling (beef,
chicken, or vegetables), and additional options (15 vegetables and seasonings). Everything is
made fresh daily. The bread is baked according to an in-house recipe and the meat is marinated
for 12 hours.
The Al Awadhi brothers have also invented other unique menu items that fuse standard
international fare with the traditions of local culture: “Magic Juice” consists of fresh orange
juice, apple juice, mint, and Earl Grey tea; “Refresh Juice” combines fresh apple juice, ginger, and
green tea; “Karakccino” blends herbal tea with milk and spices; and “Latte Khaleeji” is a latte
made from local coffee.
Funding
The Al Awadhis began looking for sources of financing to open their first restaurant in
2007, after conducting financial feasibility studies and research on restaurant operations.
They approached several banks and were rejected. At the time, bank funding for small
and medium enterprises (SMEs) was rare. They also looked for private equity funding, but
did not find investors. In 2008, they presented the concept to the Sheikh Mohammed Bin
Rashid Establishment for Young Business Leaders, which agreed to fund 70% of the venture.
The brothers contributed the remaining 30% from their own savings.
Challenges
to Scaling
Wild Peeta opened its first branch in Dubai Health Care City (DHCC) in 2008. It included a full
kitchen, seating for 34 diners, and total assets worth AED 100,000 (about US $27,000). The
founders planned to open new restaurants in Abu Dhabi and Al Ain in 2011and then franchise
Wild Peeta, with the goal of expanding to 100 locations throughout the Gulf by 2015.
The founders did open two new locations in Dubai in 2011, after closing the original location.
However, the rents were high and the setup was expensive. One location was not easily
accessible, while the other was not conveniently located for Wild Peeta’s target market. The Al
Awadhis realized that they needed to rethink their growth strategy. They chose to close those
two locations while preparing to open a new one in 2013, after incorporating the lessons they
had learned so far.
Lessons
Learned
Initially, Wild Peeta’s founders aimed to keep their target market broad: they wanted to produce
fresh, healthy food for everyone. However, the cost of producing daily fresh meals is high,
particularly in a country that imports many of its food products.
In 2009, Wild Peeta was charging AED 15.00 (US $4.00) for an 8-inch sandwich. In 2010, Wild
Peeta raised its price to AED 17.00 (US $5.00). The founders had chosen their pricing strategy
based on an analysis of their competing products: traditional shawarma sandwiches, burgers,
Subway sandwiches, and meals from more expensive international chains. In 2010, their
competitors’ pricing was as follows:
• AED 4.00 or AED 8.00 (US $1.00 - $2.00)
for four-inch long traditional shawarma sandwiches with few ingredients
• AED 9.00 to AED 11.00 (US $2.50- $3.00)
for a six-inch Subway sandwich cost
• AED 15.00 (US $4.00)
for a regular burger at Burger King
Wild Peeta’s price started off just a bit lower than Burger King’s, even though its production costs
were higher. The brothers decided to start with a low price to bring in new customers.
By 2013, Wild Peeta’s price increased to about AED 25.00 in order to maintain a wide enough
profit margin. Producing fresh food comes with a higher price tag. Whereas competitors can
use products that have a long shelf life (processed meats and ketchup with preservatives, for
instance), Wild Peeta only uses fresh ingredients, which increases not only labor costs (sauces
that are mixed daily, bread that is baked on location) but also procurement costs (ingredients
spoil faster, which means they go to waste more often).
The founders point out that customers should be willing to pay more for a Wild Peeta sandwich
because their offering is larger, richer, and healthier than their competitors’ offerings. Moving
forward, the founders say they will need to abandon their initial intention to serve a broad
market, focusing instead on a target market that can afford to price tag associated with healthy,
fresh food. They will also need to continue to increase their menu prices, possibly another 25%.
One more challenge that Wild Peeta has faced has been related to advertising. As a small business,
Wild Peeta has not had access to a large budget for traditional marketing. The restaurant has
depended mainly on social media to drive awareness.
In order to reduce costs, the owners have considered re-negotiating supplier contracts,
especially for high quality imports and plan to gain a better understanding of their market in
order to forecast trends. This would enable them to order the right quantities of raw materials,
reducing the cost associated with waste.
Wild Peeta’s founders have also debated on how to grow their brand. On the one hand, they
are interested in opening new branches themselves, but know that that would require a large
investment. On the other hand, they have considered franchising their brand - particularly
because they have received inquiries from Montreal, Bangkok, Amman, Los Angeles, and
Karachi - but they have hesitated to take any steps that could jeopardize the quality and values
that they uphold. If they do choose to franchise, they say they will have to standardize their
processes and their menu items, develop an operations manual, and implement a rigorous
recruitment and training system that would ensure the quality of the food and the service
at each Wild Peeta franchise.
Competitive
Advantages
Despite the challenges it has faced, Wild Peeta has also had some notable successes. In 2010,
its revenue was AED 1.5 million (US $400,000) and it served more than 50,000 customers.
An important strategy included extending the operating hours at their branches. While
most restaurants in the Dubai Healthcare City (DHCC) area are only open during business
hours on workdays because they target the working population, Wild Peeta remained open
until midnight every day. Approximately 65% of its business was done outside of traditional
working hours, which indicates that there is a demand for the foodservice industry in the area
to operate in the evenings.
In its efforts to uphold its founders’ values and sustain a loyal clientele, Wild Peeta has forged
a unique brand that emphasizes its localness, healthiness, and social consciousness. They
prominently display the following information:
•Wild Peeta is proud to be an Emirati enterprise: The restaurant also supports other UAE
industries by buying supplies within the UAE and by featuring Emirati art in their outlets.
•Wild Peeta’s food is radically fresh: All menu items are made fresh on a daily basis and have no
preservatives; no canned products are used.
•Wild Peeta has an attractive vegetarian offer: The restaurant boasts the first and only
vegetarian “shawarma” made with grilled vegetables.
•Wild Peeta promotes consumerism with a conscience: This is part of the business ethic at
Wild Peeta. The founders have been careful to promote healthy eating; after consulting with a
professional nutritionist, they chose to include “superfoods” (chickpeas, lentils, red cabbage,
carrots, and green vegetables) in their ingredients. Their sandwiches also have a healthy
protein-to-vegetable ratio.
•Wild Peeta is community focused: The company strives to build a close relationship with its
customers. Fairness, understanding, and ethics between the management, staff, customers,
and vendors are imbued into the Wild Peeta culture during training sessions. The founders
cultivate their fans over Facebook and Twitter (they have over 13,000 followers) and consider
them to be a rich and valuable source of ideas. In addition to requesting traditional customer
feedback, they invite their clients to make various decisions e.g., what music to play in the
restaurant, how tables and chairs should be arranged, and what sauces should be available
on the menu. The owners consider their customers to be the main source of insight for
the company and refer to the community as their “Goam” (khaleeji for “tribe”). They have
successfully garnered a “tribe” of followers who embrace their mission. The first Thursday after
Wild Peeta’s initial branch had opened, it was flooded with clients sitting on tables, on the
floors, and wherever else they could find a spot.
Future Plans
The Al Awadhi brothers are now embarking on a new project that stemmed from their experience
with Wild Peeta. Combining their passion for social media and their desire for the Gulf region to
be an innovative global leader, they are now piloting the first ever social travel TV series. Peeta
Planet is a show that tracks Mohamed’s and Peyman’s travels around the world. The brothers
plan their travel activities based on ideas contributed by their social media audience. The show
has social missions as well: the brothers wear traditional local clothing to build awareness of
their culture as they travel, and make efforts to build networks between the communities they
visit along the way. They have nearly 150,000 followers on Google+. After they return from their
travels, they will start working on opening a new branch of Wild Peeta.
References
www.wildpeeta.com
www.peetaplanet.com
www.timeoutdubai.com/restaurants/reviews/25875
http://gulfnews.com/business/general/wild-peeta-brothers-tweet-their-way-onto-gourmetspotlight-1.523457
http://gulfnews.com/about-gulf-news/al-nisr-portfolio/tabloid/emirati-brothers-pioneernew-way-of-travel-peeta-planet-1.1170356
www.ameinfo.com/216915.html
www.quickbooker.com/uae/travel-guide/uae-food.html
www.reuters.com/article/2012/08/20/idUS134761+20-Aug-2012+BW20120820
www.expo-centre.ae/InjazIssue4English.pdf
Personal interview with Mohamed Parham December 2010. Follow-up interview with Mohamed
Parham conducted by Iliana Montauk April 2013.