Food and Beverage Jun, 25 2013

Thrill of brewing profits

According to ‘India Coffee Shops / Café Market Forecast & Opportunities, 2017’, the café market in India is expected to grow threefold in the next five years to become a whopping Rs. 5,600 Crore ($ 1 billion) market by 2017. Here is a glimpse of how

By Ekta Sharma Verma, TFW Bureau
Sr. Sub-editor
Thrill of brewing profits

Alexander King Once said: “Actually, this seems to be the basic need of the human heart in nearly every great crisis - a good hot cup of coffee.”  Youngsters are not just enjoying a great sip of coffee but making it a source of money too. Cafe franchises are riding high on the youth wave. With the increase in income levels, the youth is spending more at cafe places and eating lounges and getting stirred to own one.

The youth connect

According to industry experts, more than 1,200 cafes have sprung up across India in the past decade. This has made the café industry, currently capped at Rs 1000 Crore, one of the fastest growing organised retail segments. For UniqueBrew café out of all the enquiries, more than 80 per cent are of the youth brigade. Nirav Parmar, Founder and CEO, UniqueBrew café, says: “Entrepreneurship is a difficult step to choose and today's youth is very well aware of that. The cafe business is not only about entrepreneurship or working alone but it is also about the most essential components of any business: glamour, fame and recognition. This attracts the youth to own a café franchise.”

On the increasing percentage of youths in cafe franchise area, Sachin Sabharwal, MD, Di Bella Coffee India, says: “Our franchise in Hyderabad is owned by young professionals. Both our Hyderabad stores are managed and operated by young minds. This trend is certainly growing as India is slowly but surely becoming a coffee-loving nation. This can be attributed to the increasing number of coffee shops opening stores in India, the advent of a global culture in India, increase in the number of foreign professionals setting up base in India, etc.” For Brewberry’s 70-80 per cent of the enquiries are from people within the age group of 25-35 years.

Initial hiccups

The coffee franchise industry is very diverse. Depending on how much capital a person has to invest, a potential franchisee can operate one of a wide range of coffee businesses. This makes it possible for someone with low capital to start and run a successful coffee business. During the initial phase one has to face certain challenges like that of location, marketing, etc., but most of the brands provide ongoing operational support, location and marketing assistance and design assistance. For many the advantages of opening a cafe franchise far overshadow the disadvantages. Most importantly, you get a chance to work with a proven concept and benefit from the combined skill and experience of a successful business. Amit Maheshwari, Operations Head, CBTL India, says: “The Coffee Bean and Tea Leaf is present across 29 countries with over 1000 stores worldwide. At this stage we feel that we are ready for franchising as we have got our logistics and supply chain ready to support a standardised operation across different territories. Also, in the last five years of India operations, we have been able to get the model suitably fit for India having worked on the overall experience at the cafe as per the local needs.”

Encoded rewards 

With cafe franchise, the most obvious advantage is that you have prebuilt advertising. When you choose to open a cafe franchise, you’ll have the expertise and experience of the chain’s support staff to help you in setting up the business. Brewberrys Hospitality Pvt. Ltd is Vadodara based with a mix of franchise and company-owned stores. Ankur Gupta, CEO, Brewberrys Cafe says: “Brewberrys is youth-oriented and youth-driven. We provide every possible help to the franchisee. There are many benefits of being a cafe franchise. I was just 21 when we opened our first café at Vadodara in 2005. Lower investment and lesser operating cost attracted me towards this option. Franchising helped us expand the brand nationally in a very less time. Currently, approximately 35 Brewberry franchise are owned by young professionals.”  

Training & support

One of the key factors to the success of any business is well trained employees. All franchises offer an extensive training course that covers not only all aspects of how to actually running the business, such as product marketing, product making, ordering, stocking, profits and margins, filing, accounting and register reports, but also provides training and advice on how to hire, train and instruct staff. India's coffee consumption is increasing at six per cent a year. The easiest and safest way to access the coffee business is through a well-established, solidly branded franchise that will provide both regional and national marketing and advertising. With constant training and support system, today Di Bella Coffee has 10 stores in Mumbai and two in Hyderabad. Uniquebrew cafe also provides complete onsite, online as well as offline training support to its franchisees. Brewberrys Cafe provides two-week training for new recruits at the Head office during the pre-opening and once the café is operational, they take care of replacements and advance training of team members by onsite training from hospitality managers.

Expansion on cards

Experts say some 2.25 billion cups of coffee are drunk daily. With a global population of nearly 7 billion, that’s almost one cup for every three people. With this rate and attention of the youth, even cafe franchising is increasing at a faster rate. Brands are planning for quick expansions. UniqueBrew cafe sets a target of   at least 300 franchises across the country. As the industry holds numerous opportunities for youth, Brewberrys plans to get bigger by leaps and bounds. At present, almost 50 Brewberrys Cafés have been opened across 15 states. Additionally, in an exclusive arrangement with TCS, Brewberrys Snack Bar has been set up in all the 78 passport offices across 64 cities in India. For The Coffee Bean and Tea leaf, these days 90 per cent of the potential franchisees are young entrepreneurs. Café culture is now an integral part of the routine life of today’s youth so expansion is definitely on the cards.

Stirring up the market is India's growing youth segment. According to a study, about 50 per cent of India's 1.2 billion people are 25 years old or younger. By 2015, this is expected to increase to 55 per cent. For this segment, particularly those with steady, disposable incomes, coffee shops serve as a social hub. So, chance of owning a cafe franchise is a much easier and feasible idea for them.

Franchise Facts

Brand

Area

Investment

RoI

BrewBerry’s

250-2500 sq.ft

Rs 7 -20 lakh

35-50%. 

UniqueBrew

500-3000 sq.ft

Rs 10 -1.25 crore

75 – 80%.

CBTL

1500       sq.ft

Rs 80 lakh approx

-

Di Bella Coffee

600-1200 sq.ft

Rs 25 – 60 lakh

25-30%

Related: Invest in food biz, the Goan way

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