SPILLING BEANS OVER REALTY

PUNEET GULATI, CHIEF EX­EC­U­TIVE OF­FI­CER, BARISTA COF­FEE COM­PANY LTD

Realty Plus - - Contents -

What is Barista’s cur­rent mar­ket share?

Barista’s In­dia mar­ket share is close to 12% in the or­ga­nized cafe chain mar­ket. Our fo­cus is to in­vest in sus­tain­able lo­ca­tions and not chase the rat race of be­ing vis­i­ble like other com­peti­tors. Our ra­tio of clo­sure viz cat­e­gory is very low in the last 3 years. Cur­rently sit­ting pretty at 200 plus stores with a clos­ing num­ber tar­geted at 250 by March 19, we eas­ily will be at 400-500 stores in next 3-4 years. Be­sides In­dia, Barista Cof­fee also has cafés in lo­ca­tions across Sri Lanka, Myan­mar, Nepal, and the Mal­dives.

What is the fran­chise route of the brand and its tie-ups?

The fran­chise route has been a very suc­cess­ful mod­ule for us and helped us grow at a sus­tain­able pace. Ad­van­tage with Fran­chise model is a reach be­yond just the ex­ist­ing ter­ri­to­ries and work­ing with like minded part­ners who can nur­ture the brand the same way and part­ners who pos­sess much more in­tel­lect on the local mar­kets and their sus­tain­abil­ity. Fur­ther we have also been work­ing closely with many brands on di­verse plat­forms at a na­tional level such as Paytm, Swiggy etc for in­creased mar­ket reach and con­sumer ex­pe­ri­ence.

What are some of the real es­tate con­sid­er­a­tions for the brand?

Key con­sid­er­a­tions for a mall space are foot­falls of the mall, tar­get au­di­ence, lo­ca­tions within the mall, rent to rev­enue ex­pec­ta­tions, com­pe­ti­tion spread. We also work on cus­tomiz­ing some of our prod­uct port­fo­lio ba­sis the con­sumer pro­files.

How im­por­tant is the store de­sign to en­hance a brands re­call value?

Store de­sign and lay­out is one of the im­por­tant pil­lars for a brand to sus­tain as con­sumers de­light is linked to their ex­pe­ri­ence with F&B and their com­fort while din­ing. A good look­ing store will al­ways help to drive foot­falls and even­tu­ally a good prod­uct adds to the guest loy­alty. We have ded­i­cated teams that work on mul­ti­ple de­sign for­mats that are well suited for var­i­ous for­mats and lo­ca­tions. Barista works along­side the fol­low­ing four store for­mats.

• Diner – the flag­ship for­mat with live food prepa­ra­tion and rich and ur­ban in term of look and feel with larger area.

• Barista Cafe – the reg­u­lar store for­mat

“Cof­fee shops may grad­u­ally be­come an an­chor brand for the malls, though it’s still a tough play in In­dia where cof­fee has still not pen­e­trated deep. How­ever as we ma­ture as an in­dus­try, this is cer­tainly go­ing to be a re­al­ity very soon.”

• Barista Kiosk - for­mat that is well suited for atri­ums and cor­po­rate lo­ca­tions with all of­fer­ings of a café.

• Barista Express – a much small­est for­mat with a setup within 50-75sqft of space in­te­grated with quick bites and barista bev­er­ages suited for tran­sit hubs, cine­plexes, food courts and sim­i­lar catch­ments.

What is Barista’s growth strat­egy for Tier-2 & 3 cities?

Cur­rently we are al­ready ex­posed to 47 cities in In­dia and al­ready grow­ing at a good run rate. Tier 2&3 cities to­day have also evolved in their spend­ing pat­terns and look­ing at met­ros and Tier 1 cities for brand ex­po­sure, a known brand would al­ways do well in Tier 2 and Tier 3 at the right price points, we are com­mit­ted to clus­ter wise growth to ex­pand in Tier2 and Tier 3 cities. Our strat­egy is to ex­pand through giv­ing clus­ter rights to de­velop these ar­eas.

Given high real es­tate prices, is con­sol­i­da­tion the way for­ward for F&b/cof­fee shop brands?

Cof­fee and F&B busi­ness is al­ways driven by good lo­ca­tion, reach and brand eq­uity. A good lo­ca­tion would al­ways be pre­ferred by all. Con­sol­i­da­tion may hap­pen only in a sce­nario where brands are not able to sta­bi­lize and real es­tate would not be the only rea­son. With wide spread of In­dian palate and spread of in­come groups there will al­ways be space for mul­ti­ple brands op­er­at­ing.

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