Marketing the coffee culture around India
Introducing a coffee culture in a country largely dominated by tea drinkers isn't exactly everyone's cup of tea. But Barista Coffee Company's ambitious plan is to do just that - to make the coffee experience as ubiquitous as the daily cup of chai, says its CEO, Partha Dattagupta.
Proliferating the Indian café market with franchises as well as company-owned stores, Barista Coffee Company Limited's aim is to open a new outlet in every roadside kerb worth its asphalt and spreading a coffee culture reminiscent of old Italian coffee houses.
When questioned about the impact of the change in guard from Turner Morrison and Tata to being a wholly owned entity of the Sterling Infotech Group today, Partha Dattagupta, CEO, Barista Coffee Company, says, "Any new strategy will always keep in mind the prevalent competition, positioning, pricing and ambience in conjunction with global trends." Though he admits that expansions were on the backburner during the transition period, it is now perched at an enviable vantage position with over 140 outlets in 25 cities (of which 40 outlets were opened only in the last year) and 100 more planned in the current year.
The game plan
Bringing about a coffee revolution by altering firmly ingrained tea consumption patterns is by no means an easy task. But when Barista set out to do it in February 2000, it dented the elitist perception that coffee held.
It would be simplistic to dismiss the café experience today with that of the days of yore; crumbly biscuits and cutting chai replaced by a wide array of biscottis and paninis with aromatic coffee. For Barista, luring coffee drinkers with exotic blends and an option of something to munch on outside the trappings of a five star and within the confines of a warm, informal ambience worked like magic.
This tradition continues. "Our strategy will clearly be to strengthen the Barista brand by enhancing and differentiating our guest experience. We will do this by understanding their needs at all touch points," says Dattagupta. He believes that the fundamental laws of innovating products and services will be integral to customer satisfaction. "Lifestyle change is a reality and the customer today is accustomed to international standards of services and expects the same in India," explains Dattagupta. So whether it is its tie-up with Worldspace Radio for music in its 50-odd cafes or with Planet M to open espresso corners, customer satisfaction is supreme. Barista has also entered into alliances with British Council, Rock Street Journal and Corner Bookstore for book reading sessions, music and film festivals.
Technology has been the biggest support in its rapid expansion. While 25 to 30 per cent of its cafes are Wi-Fi enabled, the SAP interface at the outlets is through the Internet, which in turn plays a critical role in its Customer Relationship Management and Web-based activities. "We have been the first retail chain in India to integrate our stores with SAP retail at the backend. This will help us understand sales trends and sales mix better, plan leaner inventories, control COGS and wastage," he adds.
On the horizon
The group plans to capitalise on the booming Indian economy and growing disposable incomes. "This financial year we plan to add on 100 new outlets on our own and around 20 outlets through the franchise route. We plan to enter at least 20 more cities next year," he says.
Barista's outlet expansion strategy combines saturating the metros and expanding in non-metros. The focus on the ownership route in the metros and franchisee in the non-metro cities, where it franchises all outlets to a master franchiser, a factor crucial to maintaining quality and consistency. The non-metro towns Barista intends to focus on will be high population towns with consumption potential such as Surat, Amritsar, Ludhiana, Visakhapatnam, Ranchi and tourist towns like Panjim, Katra, Jammu, Shillong and Ooty. Coimbatore and Kochi are the first forays, with approximately 15 outlets each.
|We are clearly a tea-drinking nation, but coffee consumption has been growing five per cent per annum in the past three years. We are working with the Coffee Board to evolve ways to increase domestic consumption|
But while studying consumer trends, the company realised that a marked difference between the two segments existed. Consumers in non-metros viewed an F&B experience including café outlets, as a family dining option. This led Barista to expand its menu to include complete meals. "We will cater to the demand by introducing food items like burgers and pizzas," he says, a step forward at redefining the entire café experience. The company will also review its food strategy in B-class cities, tweaking flavours to suit the local palate. Currently, Barista outsources its food requirements in non-metros with central kitchens in metro cities.
Internationally, the company is looking at making a foray into Bangladesh this year and is also eyeing Bahrain, Qatar, Oman and Kuwait. It had previously taken the Barista experience abroad with a joint venture with Jewelex Trading Limited in Sri Lanka. It is already present in the Middle East.
Barista Crème, the lounge version of the brand that offers table service, comfort seating and plush interiors, is key to its growth plans. Another avenue that it is looking at to increase its revenues is merchandising to raise the current contribution to its total profits from 2.5 per cent to approximately seven per cent. "Leveraging the brand with mugs, T-shirts, even packaged coffee with brewing equipment, will be a key to growing the brand," Dattagupta opines. This year Barista will also kickstart outlets at select petrol pumps on the Delhi-Agra and Delhi-Chandigarh highway, a part of its strategic tie-up with Indian Oil Corporation.
Dattagupta believes that the potential in hospitality is immense. But global benchmarks are required to improve performance. "Consistency of product and services are the key. We are clearly a tea-drinking nation, but coffee consumption has been growing five per cent per annum in the past three years. We are working with the Indian Coffee Board to evolve ways to increase domestic consumption," he adds.
Demographically, India is a very young nation and the numbers in the 20-25 age group is on the rise. And with higher disposable income and increase in malls and multiplexes the consumption, he feels, is bound to increase. Duttagupta believes chain restaurants will have the advantage of economies of scale and the benefit of being brands, but standalone restaurants will have their own place. After all, he concludes, letting private enterprise flourish is a necessity for the success of the hospitality sector.
|Barista Coffee Company was established in February 2000 by Turner Morrison. In 2001, 35 per cent was bought by Tata Coffee and the rest by Sterling Infotech Group in 2004. The same year, it bought out the entire stake from Tata Coffee. |
Today, the brand along with its superior avatar - Barista Crème - is present in India, Sri Lanka and the Middle East and is perched at an enviable vantage level with over 140 outlets in 25 cities: Delhi, Gurgaon, Noida, Ghaziabad, Mumbai, Kolkata, Chennai, Pune, Bangalore, Chandigarh, Dehradun, Shimla, Mussorie, Jaipur, Kanpur, Lucknow, Mohali, Bhopal, Ahmedabad, Baroda, Bhubaneshwar, Indore, Coimbatore, Kochi and Hyderabad. It has also forayed into the international market with four outlets in Sri Lanka seven in the Middle East.