Barista brews piping hot growth plans

Barista is the pioneer of café chains in India and has been in business for last 23 years which itself is a testimony to a proven business model and consistency and loyalty of guests. Rajat Agrawal, CEO, Barista spills beans on brand’s expansion plans and shares how franchising continues to be a focus area for the brand.

 Barista has revolutionized the Indian café market, but with time, many other national & international brands have joined the league. Why should an investor choose a Barista franchise over another coffee chain?

Essence of franchise ecosystem is consistency and trust on the brand you are investing along with its lineage. Barista is the pioneer of café chain in India and has been in business for last 23 years which itself is a testimony to a proven business model and consistency and loyalty of guests. A long tenured journey gives the franchisee investor a comfort on business model viability and returns on the capital deployed. We have been the fastest growing café chain in India today with 350 plus stores and scaling at a healthy pace targeting to be at 500 stores over next 2 years. We have innovated well as a brand over the years and are already ahead with lot of coffee players with our vast reach and backend infrastructure which is robust enough to keep up with the pace on growth.

 How has franchising business model aided the business growth for your brand?

Franchising has been an important aspect of our growth over last few years along with our own company owned stores. We have grown well in the past with both metros and non metros in focus. The best aspect is the pan-India infrastructure for supply chain, food development and training which we have been able to develop over the last few years, has helped us to grow at a rapid pace. Franchising continues to be a focus area for us even in near future with refinement on infrastructure suited to assist partner growth.

 Post pandemic, how has been the recovery in business, kindly state the numbers.

Post pandemic and even during the pandemic our growth journey was at a full steam, we opened almost 150 plus cafés in last 3 years. We are operating at a significant growth compared to pre-pandemic. Absolute growth has been quite encouraging coupled with new stores being added along with robust increase in like to like sales. We are targeting Network revenue of INR 240 crore in FY24.

 What is the percentage of your company owned and franchise stores?

Ratio is quite healthy compared to franchise brands in India today, we understand the store-level economics well which is why the model has been scaling at a good pace. Currently the % of COCO (company owned company operated) vs FOFO (franchise owned franchise operated) is 35:65. We have recently started with a FICO (franchise invested company operated) model as well which is also getting encouraging response.

 Which are your best performing markets in India, what kind of potential do you see in smaller cities and towns for your brand?

We have grown at a rapid pace in North India with Punjab & HP region being one of the key drivers. Non-Metros are maturing well with digitization and knowledge on product, with rental costs being lower in smaller towns business ROIs are much healthier. Today Indian consumers want to savor a branded product and smaller towns are one of the key consumers of this category and are ready to pay a premium for branded products which has an aspirational value.

 Barista offers different business models like, Cafe, Diner, Express and Kiosks. Which business model has the maximum reach?

Cafes & kiosks are the most acceptable formats in the current scenario, however other models like Diner & Express are also mushrooming well basis the location type.

Recently you have forayed into international market. Where all are you present internationally and which all new markets are you planning to tap?

We are the leading Café chain of Srilanka with 23 operating outlets and recently signed up Maldives. We are focused to grow in SAARC region and looking at Middle East & Africa as well for expansion.

 Any new trend catching up with the Café market post pandemic.

Cafés post pandemic are seeing a resurgence in demand, cafes are just not restricted today to being a lifestyle space. Now, it has multiple utility cases such as work from café, business meetings, family hangout places etc. Further, new opportunities on specialty coffees like single origin, cold brew etc. are also catching up fast.

 How significant is social media marketing for your brand. Can you share any successful social media marketing strategy that proved to be a game changer for the brand?

 Online channel of promotion through social media is becoming the need of the hour to be ahead in race. We as a brand are quite active on this front. We keep on doing regular campaigns on our product portfolio, guests, knowledge sharing sessions etc. to engage with our audience. Further we also use this effectively to seek for potential partners on franchise/distribution our recently initiated vending business and our online sales channel to generate leads and sales.Our recently conducted campaigns on valentines was widely accepted and yielded in good conversion at stores.

What kind of support do you offer to your franchise partners pan-India?

 Network growth is all about robust support system, our handholding process starts from Day 0. We assist in location diligence, site planning, site designing, project vendor finalization, sourcing of equipments & furniture, branding, food development, staff hiring and training, supply chain set up, launch marketing and hand holding in operations with a dedicated set of area coaches.