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Feb, 11 2013

BREWING BIZ PROFIT & RELISHING IT TOO

Delivering the value for money to its clients, Café Desire capitalises on its existing facility of manufacturing and welcoming response from the market in sustaining its position of being the most trusted supplier of hot beverage solutions in the domest

DESIRE is the cause of invention, and the statement is very well justified by this brand that initiated its entrepreneurial venture with the objective of becoming an integral part of everyone's daily life.  Yes, we are talking about Café Desire, the proud supplier of hot beverage solutions.

Destined to fulfill its desire of becoming the fastest growing company with high level of customer retention, unmatched and proven service, Café Desire is today India's leading hot beverages solution provider, offering jet pace installations. It offers a wide range of products, team dynamism, and highly experiential services.

Conceptualised with a simple idea of installing tea and coffee vending machines and supplying beverage mixes, Café Desire has grown tremendously over the years and relishes the success in the process of making its customers and franchisees happy by providing them the best products of high quality.

Garnering excitement from the escalating demand and welcoming response from the market, the company took the wise and ambitious decision to embark on this prospective business venture. Speaking about the growth and success of the company so far Ghouse Mohiuddin, MD,  Café Desire, informs: “Our company's growth has come up to our expectations till now. However, I feel there is a lot more left to be done in years to come.”

Growth patterns

Coffee and tea industry in India accounts for more than Rs 12,000 crore whereas the vending industry is around Rs 1,000 crore and has been growing at the rate of 25 per cent per annum, Y-O-Y. This has been possible primarily because of the increase in percentage of coffee consumption among youths and serving tea; coffee becoming a minimum staff welfare activity in every office, and it is no more considered to be a South Indian drink.

Business model

Café Desire being a brand of coffee, tea vending machines and beverage mixes, the company's business model is more of a B2B type where the franchisees deal with institutions directly by appointing a delivery boy to deliver the beverage mixes to the locations where vending machines are installed. Presently the company has more than 150 business partners across the country in the form of authorised franchisees, dealers, stockists and C&Fs.

Franchise success

The company opted for the franchise route in 2006 for vending machines vertical. It was a very conscious move by the company to strengthen the brand's expansion via franchising. Franchising, the company believes, offers a win-win situation for both the franchisees and franchisor. Franchising has helped the company to expand the brand all over the nation in a prudent way. The company boasts that with franchising it has made its presence felt across important markets in the country.

Why to franchise with Café Desire?

Franchising of vending machines is all about installing coffee and tea vending machines and supplying beverage mixes regularly to small, medium and large corporate offices, software companies, educational institutes, hospitals, shops, bakeries, hotels, malls, etc. The advantages of taking up the franchise of Café Desire are:

Regular stream of profits: By installing a few vending machines, the franchisee will have regular business of supplying beverage mixes to the same customers every month, thus creating a regular stream of profits.

Ever green business concept: In Café Desire's vending machines business, the franchisee will never reach a saturation point.

Convenient sourcing of vending machines: Customers will have the option of sourcing the vending machine from Café  Desire's authorised franchisee under two options i.e., A) Smart Plan: The customer will make the outright purchase of the vending machine by paying the full cost.

Corporate Plan: The customer will source the vending machine from the authorised franchisee under a one-year maintenance contract by paying Rs 6000 per annum, wherein the customer will get periodical preventive maintenance, unlimited breakdown complaints support with free replacement of spare parts.

Instant profits every month: Customers need uninterrupted supply of beverage mixes to meet their coffee and tea needs and this is done by the brand's authorised franchisee by generating invoice and collecting payment directly from customers to make instant profits every month.

Complete service support: The company provides a direct service team and the franchisee does not need to invest on service team, as the company will be taking care of every service need of the customer.

Attending customers' complaints: Customers will login their service complaints directly on the company's national toll free number.

Café Desire franchisee needs to be

Passionate about the business, employs the best of the sales skills by doing various cost effective business promotions recommended by the company at regular intervals. Also the franchisee should ensure timely delivery of beverage mixes in right quantities to the customers. The franchisee should be ready to spend Rs 6-8 lakh and should have an area of 200 sq ft.

Initial handholding of franchisees

Café Desire provides training to its franchisees to come up to the expectations of the customers pertaining to operations of the franchise business. The company also ensures that its franchisees and sales executive are well equipped with all the required sales tools, sales mechanism and trained via in-house session and field training. Also the company will subsidise the cost of sales executive to the franchisee pertaining to marketing of the franchise business. Regarding the technical requirements of the business, the company maintains a direct service team to handle all the service requirements of vending machines.

Expansion strategy

The advantage of dealing with products like coffee and tea in a country like India is great, as the Indians have inculcated consumption habits of these beverages over a long period of time. Currently the company is working on its penetration plan mapped for the complete length and breadth of the country with various strategies in place. The company also has plans to take the brand to the international market. The company also has an international division engaged in identifying new markets apart from the markets like Oman, Dubai, and Iran where the company has already marked its presence.

Interview

Adding value to biz via franchising

Though happy, he is not fully contented with the huge success of Café Desire. Ghouse Mohiuddin, MD, Café Desire, shares with Pallavi Majha the company's future plans and throws some light on newer heights that need to be achieved by the company in the coming years.

Share with us your entrepreneurial journey.

My entrepreneurial journey has been more like a classroom where one gets to learn everyday, and with the attitude of learning and adopting the changes,

I could build the company step by step making it fundamentally strong. We are crystal clear in what we do. Our business process and software is designed in such a way that it generates a profit and loss account everyday by 6:30 pm and our practice of working with the best of the vendors across the world sourcing the right kind of ingredients for our manufacturing process, building a passionate team and looking for development at regular intervals has been helping us in a great way. We had been quite particular about having positive cash flow as we do not work on debt for internal policy. We are open for equity as we have reserved our plan of getting external funds through an IPO which the company is planning in the near future. We are happy but not contented as we have heights to achieve in future.

How do you think franchising has contributed to the growth and success of your brand?

When we decided to scale up our business operations, franchising added the required speed to the process. But one must be very careful about the kind of franchisees one partners with, this is very crucial. We also learnt over a period of time, the importance of shortlisting the right kind of franchisees which has helped us in adding great value to the company.

Elaborate on your marketing and promotional strategies for the growth and expansion of the brand.

Our experience of 14 years in this business has helped us to narrow down the required marketing and promotional strategies for the growth of the business. As mentioned earlier this is more of B2B type of business. Our vending machine cannot be sold through a hoarding or print advertisement that is the reason why you might not have seen any vending machine advertisement till date. We understand that to promote this business our franchisee and his sales executive should be well trained with product knowledge and mapping their respective markets so that they can go to these places and give a product presentation and generate an order. And last but not the least, we are thankful to our existing customers who provide us a good number of references at regular intervals.

Products and services

Vending machines: The company has double and quadra option vending machines where the customer can have a choice of his drink on just press of a button. These are state-of-the-art, robust, export quality vending machines.

Service technicians: The service technician deals with the complete service operations of all vending machines installed across the nation and internationally. These service technicians are the direct employees of the company who work for the franchisees. The Café Desire service team is India's largest service team.

Beverage mixes: These mixes are manufactured in GMP (Good Manufacturing Practice) certified plant which is one of its kind in India and is also certified by the Indian government body - FSSAI (Food Safety and Standards Authority of India). This certification offers customers and franchisees a high level of confidence on the quality and safety aspects of the product and the brand. All the beverages are Nitrogen Flushed, a process that utilises nitrogen to remove the oxygen from packaged coffee and tea in order to preserve its freshness.

Types of beverage mixes

  • Most popular category: Coffee, cardamom tea
  • Appetisers: tomato soup, ginger tea
  • Hero product: Lemon tea
  • Health drinks: Diet tea, low sugar tea, diet coffee, low sugar coffee, chocó feast, white malt

Business verticals

Franchise Vertical: The company appoints franchisees in urban and semi urban areas for its vending machines and hot beverages division

Dealer Vertical: Dealers are appointed in rural areas for vending machines and hot beverages division

International Vertical: The company has recently started bulk exports and has started expanding itself globally via franchising.

Single Serve Sachet Vertical: This vertical deals with small packs of ‘ready to drink’ hot beverages like coffee, tea, lemon tea, soups, etc., especially designed for micro offices and homes. The consumer just needs to add hot water to the product and the coffee or tea is ready.

Retentions and Renewal Vertical: This vertical deals with customer retention and contract renewals with the existing customers.

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