From delighting palate with dry fruit and condiments collection to pampering body with its spa products, arome launched in 2009 as a food boutique and a one stop shop for luxury items. Neha Gorawal, Business Acquisition, arome, shares the future expansion plans of the brand
Pallavi Majha (PM): What is the size of the specialty retail market in India? What percentage of the market is occupied by the industry you are dealing into?
Neha Gorawal (NG): Specialty retail in India is still in its nascent stage and heading for a stupendous growth in the near future. Currently, the size of India's dried fruit market is $1 billion, and growing at 20 percent annually, with a demand-supply gap of over 30 million tons. With taxes on dried fruit lowered, imports have increased from one million to 10 million tons, and the market is ready for more, according to Mumbai’s dried fruit traders.
According to a non-official estimate by the Dry Fruit Sellers' Association of India, nearly 400 million Indians consume dried fruit, such as pistachios, almonds, dried plums, chilguzas (pine fruit) and dried apricots and another 400 million use them as additives for Indian sweets.
PM: Kindly elaborate on the products and services that you offer and what is the USP of your brand?
NG: arome lies at the zenith of a spectrum that caters to a discerning food connoisseur. In a hitherto unexplored segment in the Indian market, arome as a food boutique is a one stop shop for luxury items. At our specialised boutique, we understand the requirements of a niche segment that appreciates quality above all other factors. From delighting your palate with our dry fruit and condiments collection to pampering your body with our spa products, arome leaves nothing to be desired. Moreover, these products are beautifully packaged enhancing the quality of the overall product.
PM: Do you want your business to be strengthened via franchise route and Why?
NG: Yes because there is a great demand for the variety of products that we offer and it is important to have our presence in various locations in India. Moreover, with limited investments, one could establish the same standard of quality and earn goodwill and royalty from the customer since not much consumers are aware about different grades and quality that they come in.
PM: What steps have you taken to bridge the gap in the industry? What kind of training and support do you offer to your franchisees?
NG: arome is a leading importer of Dry fruits and Spices having gained invaluable experience over 35 years of business. We understand the pulse of the market giving our customers a finely honed product. What sets arome apart in this segment is the unmatched quality of our dry fruit range. Since this is an extremely delicate and perishable commodity, we ensure that it is handled and packaged with the most superior technology available, guaranteeing you a tantalisingly fresh end product. All of these products are priced competitively, ensuring a great value for money deal.
We have guidelines to train the staff. The training period ranges from a week to 15 days at our cost. Ongoing training for product storage, product handling, product knowledge etc will be done at our cost for the Agreement Tenure.
PM: What marketing strategies have you put in place to give an edge to your competitors? How do you market your brand’s name and how much do you spend on marketing your brand?
NG: Being into food and wellness category we have to constantly carry on our marketing activities for the consumers. We carry marketing strategies at three levels: ATL (Above the Line) Marketing, Store Marketing and Corporate Marketing.
We are marketing our brand ‘arome’ heavily online and have already spent Rs Two Lakh just to promote and create database for our arome facebook page. Also we have promoted through hoardings, radio advertisements, newspaper inserts etc…
PM: Through which retail formats, you retail your products? What’s the starting capital investment and area requirements for each of the retail formats? How much time does it takes to reach break-even and return on investment?
NG: We as our speciality store for arome have a standalone retail format. The starting capital investment is Rs 17 to18 lakh wherein, Rs 10 lakh is against refundable stock deposit. Rs Five to Six Lakh would be cost incurred on interiors and hardware for the store operations. Rs Two lakh is non-refundable brand fee.
The minimum space required to set up the store is 300 sq. ft and to reach the break-even it would take approximate two years depending upon the catchment area. Anticipated Return on Investment is 50 per cent.
PM: What kind of franchisee profile are you targeting?
NG: We are majorly looking for franchisee that has an owned property mainly at High Street, Residential Area, Shoping Malls (Prime Shopping Area) - Preferably Ground or First Floor.
PM: To maintain standardisation at your outlets, what type of training and business support you will be rendering to the franchisees?
NG: To maintain standardisation at our outlets, we have a franchisee manual structured to aid franchisee abide by it. It covers the store operation framework, visual merchandising, product handling and storage, handling customer complaints, receiving valuable feedback, etc.
PM: At present, how many outlets do you have? How many of these are franchised and how many more outlets are expected in near future?
NG: arome started in the year Dec 2009. At present, we have three outlets, the master outlet being at Santacruz (w), Mumbai. Another one is at Bandra Linking Road, Mumbai and one at Tilak Nagar, Nagpur. All three are company owned. There have been some inquiries and talks for franchisee outlet to commence after participation in one of the franchise exhibition and we are looking forward to sign the agreement soon.
PM: Do you have any plans to go set up base globally too?
NG: Yes. After expanding within India, we also want to set up Arome globally as we are already receiving some interest to start in Canada and Singapore.
PM: Do you think, the specialty industry has the highest growth potential in the next two years and why?
NG: Definitely, the specialty industry has the highest growth potential in next two years as people are becoming loyal to brands and want to purchase products from stores that specialise in a particular segment. Moreover, with sensitive products like dry-fruits, spices, organic food and wellness products; consumers believe in the store owner in giving the best quality. With branding and standardisation of quality; people will purchase confidently as the store caters to that particular segment only.
PM: What all legal formalities are involved in taking your franchise?
NG: Taking up our franchise would involve in just getting into an agreement with us. The agreement would be the franchise agreement which would state all terms and conditions agreed upon the franchisee and the franchisor.
PM: Where do you see your company’s growth five years down the line?
NG: Five Years down the line, we want to create name arome synonymous for Dryfruits. We are looking forward to start 50 outlets in all metros and major tier I and tier II cities in India.