SME profile: Dubai entrepreneur’s appetite for risk

You might think the last thing the DIFC needed was another eatery.

There are dozens of places in the centre catering to the 15,000 people who work there every day, from top notch international cuisine in the Gate Village, rapidly becoming a gourmet’s delight, to the sandwich bars and takeaways of the DIFC concourse, which once led to jokes about Dubai International Food Courts.

But Alexander Clavel, a 36-year-old Swiss Italian, believes there is nothing like his deli-cum-sandwich bar, Panifico, which nestles on one of the open-air terraces of the Village. “We want to do something different, to bring quality to the mid-market food outlets here. Nobody’s really doing it.” he says.

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What about the array of existing places such as Bateel, Dome, More, 1762, all of which have found a market in the middle-of-the-range market?

“Panifico is aiming at mid-market quality. We’re better quality than Subway, but we’re better value than Bateel. We’re cheaper than the big restaurants, of course. Our average spend is around Dh50 to Dh55 for lunch or a snack.”

The idea, Mr Clavel explains, was to give something of the flavour of a 1960s coffee bar with the feeling of a New York deli. The image is completed by the ambience music — bluesy American pop from the 1970s mixed with classic Motown.

That was the concept that Mr Clavel, who has previous experience in the restaurant and food business, brought to the DIFC authorities in 2013.

He had identified a location, a public balcony by the exit from one of the pedestrian walkways that links the Village to the Gate complex that had previously been a little-used empty space.

“The idea was mine. I went to DIFC and suggested the location could be leased,” he says. “It had hardly been used as a balcony before. I designed a structure that was homogenous with the rest of the buildings, and showed it to DIFC. They got the idea, and were helpful.”

The DIFC referred him to Idama, the facilities management company that handles the nitty-gritty of daily life in the centre. “There was a little disconnect between the DIFC’s vision and the ability of Idama to deliver it, and it turned into rather a bigger job than we’d imagined. It was a challenge to get it all done,” he says diplomatically.

A new small building had to be constructed, with the utilities and power connections a food business would need. Power was an issue.

“Idama offered to provide 3kw, but I needed 22kw. Solar was not practical because of the high-rise buildings around, which blocked out sunlight. We thought of a battery powered coffee-shop, but that wasn’t practical either.” The issue was eventually resolved, thanks to Idama, and he got his power.

Not that he believes in wasting it. “The idea is that the outlet operates independently. All the food and drinks are prepared on the spot, there is no central processing plant with a big delivery network.

“That means that all the food preparation is visible to the customers, which I like. All the packaging is recyclable material, and I like that, too. We don’t leave a big carbon footprint. We’re pretty self-sustaining,” he adds.

That even extends to air-conditioning. The cafe is not hooked up to the main DIFC air conditioning system, but instead hopes to rely on big ceiling fans — which enhance the retro look — as well as the chill from nearby public cooling. That could be quite a challenge in the full heat of a Dubai summer.

The aim is to make Panifico financially self-sustaining as quickly as possible. The start-up capital was provided by Mr Clavel himself and by friends confident enough to think they could tell a good thing. The idea is to cover those costs in a year, and return 30 per cent to the investors. So far, Panifico, which opened last autumn, is on course for a 25 per cent return, he says.

He will consider using SME finance — in the form of bank loans or private equity funding, possibly crowd funding — to help finance the next phase of growth, which is already on the drawing board.

“The plan is to open four outlets in Dubai as ‘proof of concept’, and then look for further finance to expand. I think it’s entirely possible to have hundreds of stores,” he says.

He has one other location in the DIFC area under advanced consideration, but is not ready to announce it quite yet. “It will be another high-traffic location in an area where people are pressed for time,” he says.

The staff who run Panifico on a daily basis at the moment have come from pretty illustrious eateries: a chef from Roberto’s, the fashionable DIFC restaurant, and an operations manager from the Japanese restaurant Nobu in London’s West End.

How did he attract staff of that quality? “By getting them to share in the belief that we can achieve something that will turn into a gigantic business. They are not equity incentivised, but they’re performance-related incentivised. They’re risk takers, but well-informed ones.”

Of his own entrepreneurial inclinations, Mr Clavel is convinced. “You have to take a risk in life, and in business. Either you’re safe and sound in bonds, or you diversify. Either you get a job in the post office, or you become an entrepreneur. For me the choice was simple.

“If I has a regular job, at best I might get a 5 or 10 per cent salary increase per year; at worst I’d lose my job and my income. As I am now, the downside is the same — I’d lose my income — but the upside is unlimited.”

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