Last fortnight saw major happenings in the tiny world of coffee bars. Barista announced its willingness to be bought out, Starbucks is – finally – poised to enter the country and Barnie’s made its entry into the country, the first outlet being in the National Capital Region. That means that Barista, Café Coffee Day, Coffee World, Costa and Barnie’s are all in the fray. Though the very first outlet of Barista opened its doors over six years ago, the coffee bar as a revenue model is still undergoing refinement.
What, for example, is the optimum number of coffee bars for a single company to have? Too few – ten all over the country is miniscule – means that your brand has little or no visibility. Too many – say 200 – and you are stretching your resources (trained manpower, technical help with the machines, each of which cost around Rs 5 lakh and snacks) at the cost of your quality.
How important is coffee in the whole scheme of things? In a coffee-drinking nation, such as Italy, this question hardly bears bringing up at all, for it is assumed to be at the heart of the matter. In India, particularly in North India, coffee would seem to be incidental. Barista initially positioned themselves as a third space, “besides your home and your office”. It is fairly routine for senior management not to know any technical details about the blend of coffee that they serve – what roast, and which beans they use for instance. Anoop Sequeira, CEO of the holding company of Coffee World and Virag Joshi of Costa Coffee both confess that their food sales in India are equal to that of their beverage sales, whereas both chains (Coffee World has outlets in Thailand and Costa is a UK based company, with branches all over the world) sell far more coffee than snacks worldwide.
The coffee question is vital on two counts. In the case of international brands, importing beans in very large volumes is not economically viable. On the other hand, setting up an Indian roasterie is fraught with many perils, chief of which is fluctuating quality. Neither is importing in itself a guarantee of quality. Indian water, Indian milk and above all, the Indian palate may not take to an imported blend, which has been formulated with very different conditions in mind. That’s why Coffee World has devised a separate blend for its operations in India.
Then there’s the type of retail outlet. Have an atrium bar in a mall, and all your seats will be full throughout the day, though not necessarily with customers: mall rats need somewhere to sit, don’t they? Open a small bar in a neighbourhood market and you run the risk of being empty all day; operate a large place in a prominent market and the rent goes through the roof.
Then, there’s the question of snacks, vital for our country. Set up a commissary and your capital costs shoot up; take products from vendors and your quality falls.
Fun Facts: Costa, with branches all over the National Capital Region, has the best blend and roast of them all, while Barnie’s wins with its variety of flavours for coffee-drinkers who don’t particularly want their coffee to taste like coffee!