Cafe Franchise Business, Coffee Franchising In India growing with an increase in franchise brands.

With Barista completing ten years and foreign chains coming in, coffee culture is booming in India

It was the British tax on tea that, by default, increased coffee consumption in India in the late 19th century. However, more than 100 years later, it is the strong branding of Indian coffee and the multiplying coffee chains that has made this beverage popular in this tea drinkers’ nation. This also explains the 10-year reign of Barista. After making its debut in Delhi’s Basant Lok in 2000, this coffee chain now has 225 outlets in India and neighbouring countries.

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 10 years ago, it dented the elitist perception that coffee held. For Barista, luring coffee drinkers with exotic blends and an option of something to munch—outside the trappings of a five-star and within the confines of a warm, informal ambience—worked like magic. It still continues to do so. “People have been drinking tea at home for ages. With coffee came the aspirational value, and most youngsters were willing to experiment. The term ‘coffee date’ came about when we opened our outlets,” says Sanjay Coutinho, COO, Barista Coffee Company Limited. After proliferating the Indian cafe market with franchises as well as company-owned stores, Barista aims to open a new outlet in every street corner and create a coffee culture reminiscent of old Italian coffee houses.

Although Barista was the first big player, it was Cafe Coffee Day that took the coffee-drinking culture to the grassroots level. It opened its first cafe in 1996 on Brigade Road, Bangalore, and today has the largest cafe retail chain in India—with 915 cafes in 135 cities, with a large number of them situated in small towns. With its roots in Chikmagalur, the home to some of the best Indian coffees, it was easy for CCD to get its act together. “With CCD came the option of spending less money on coffee as well as spending time at a cafe all by yourself or with a book, or simply with a bunch of friends,” says lawyer Kiran Kumar, who was a student in Bangalore when the first outlet opened. “Since CCD offered sandwiches and burgers, it is a sought after takeaway joint as well,” he says.

Thanks to the cafe boom, things are looking up for coffee estate owners too. “In the last few years, the price of coffee bean has increased. With blended and single origin coffees being served at most cafes, the turnover will only increase,” says Oliver Rebello, a coffee estate owner in Coorg.

Coffee houses and cafes also reflect the economic and social changes in Indian society. They not only offer a stimulating drink, but a place to meet friends and business partners, catch up on news and access the internet. With both Barista and CCD having found their place in the heart of India’s coffee drinkers, it was only a matter of time before foreign chains like Gloria Jeans, Costa Coffee and Coffee Bean and Tea Leaf came to India.

“As India urbanises further, there is a high potential of increasing the consumer base as well,” says Manish Tondon, President Citymax, who brought Gloria Jeans Coffee to India in 2007. “Since coffee consumption is on a rise in India, it is nice to have cafes of all levels (different price ranges),” he adds. During the late 2000s the business of Barista and CCD was on the rise and the Coffee Bean and Tea Leaf entered the market to take the “sophistication factor” to another level. However, its CEO, Arun Chopra, still believes that India is largely a nation of tea drinkers, and hence they have a balanced menu. “We have 20 varieties of coffee and 22 varieties of tea,” he states.

The increase in the number of foreign chains in various metros, has forced the Indian ones to rethink their strategy. After establishing their presence in metros, Barista and CCD’s are now opening their outlets in non-metros. “We now have cafes in smaller cities like Kochi and Vadodara,” says Coutinho. He believes that there is a marked difference between the consumers in non-metros and metros. “In metros, they look forward to an F&B experience. This led us to launch our outlets Barista Crème.”

With cafes trying their best to revamp the menu every few months, it brings us to the question on how many will actually survive in the long run. “Competition is always fierce. CCD and we have been moving parallelly right from the time we set up our cafes. But then it is the fear of competition that keeps you in the league,” feels Coutinho. Chopra feels that demographically, India is a 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 coffee consumption, he feels, is bound to increase.

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Gloria Jeans Eyes Franchise Expansion of 100 Units By 2013

Gloria Jean’s eyes expansion

Bullish on the estimated Rs 1,200 crore market in the country, international coffee chain Gloria Jean’s Coffees (Gloria) is readying itself for expansion to make it profitable.

Having entered the Indian market in 2008 through master franchise model, it has only nine outlets in the country. The company currently has spent more than 12 months on reworking and refining its business model and is finally readying itsel for expansion. It is set to open one outlet each in Delhi and Pune in next two months besides setting itself a target of 100 operational outlets by 2013.

With 50 per cent of Rs 1,200 crore market being unorganised and Cafe Coffee Day and Barista taking big chunks of the remaining, Gloria believes there needs to be a concentrated effort in gaining momentum and popularity in the market.

Speaking to Deccan Herald Gloria Jean’s Coffees Regional General Manager Tony White said their emphasis is on training its staff adding Citymax Hospitality, its franchise here, has invested Rs 80 lakh on training alone. Its total investment as on this date is Rs 10 crore.

Coffee varisty

The company has set up ‘coffee university’ –– a mock coffee shop –– where it trains its staff to make coffee and also other essentials like treating the customers et al. Citymax Hospitality President Sundarrajan Rajagopal said besides having to go through rigrous levels of training, the staff will also be monitered by the ‘coffee university’ in Australia (Gloria’s base) and India. There are regional workshops conducted twice a year to further enhance quality of workforce. It also conducts competitions for baristas from across the markets it has presence so that there is an exhange of ideas and exposure to all its staff.

Further, the firm will pump in another Rs 50 crore into the Indian market –– out of which a significant sum will be spent on training –– as it believes that there is enough scope for all existing players and more. It said it will expand its presence to 16 cities from the current four.

With all other players like Barista,Cafe Coffee Day,Mocha,Nescafe,Coffee N U, Java City, Brewers,Cuppa eyeing expansion, Gloria Jeans is all set to have its share of the Pie of the Indian coffee market.

Bangalore: Jan 29, DHNS: