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Jul, 11 2013

BREWING PROFITS ANEW

From the habitual Indian Coffee Houses or a restaurant for a drink to these high-end lounges and bars with dazzling lights and sharp music, the industry has evolved and has moved a leap ahead hitting right on the nerve of the consumers who love to take a

CAFES and Lounges are new segments introduced in the food and beverage industry and have becoming exceedingly popular in the last few years. Cafe Coffee Day (CCD) and its lounge format have been mushrooming across the country. Among the leading cafes and lounges are Sports Bar, Fusion Lounge, Juice Lounge, Buzz, Brewberrys Cafe, CDX, S Lounge, Chocolate Room, Café Oz, Costa Coffee, The Coffee Bean & Tea Leaf, Café Mocha and Hard Rock Café. The market size of the café industry is growing at a steady rate of 12 per cent annually. It is expected to reach Rs 913 crore by 2015 from Rs 572 crore in 2011. The café industry has a segment share of about 3 per cent in the overall restaurant industry. Recent growth rates are likely to increase the share of the café industry in the near future.

A few major brands already have a formidable base all over the country, but the positive aspect is that there are very few established players in this industry which opens a window of opportunity to become a brand and succeed.

Prospects ahead

Café is the current buzzword all around. Café culture has grown substantially over the years.  Recent trends depict that apart from coffee even tea cafés have been established under a similar concept of a coffee café and are doing quite well. As of now, the threat is low as café culture is on the rise, but a tea-drinking nation always poses a challenge to the coffee café market.In order to overcome the challenges, café owners are looking at opening small outlets to bring cafés near the consumer neighbourhood. It is done with a view that after a long day, people can stroll down to the nearby café to relax, be comfortable and feel at home. This will increase the reach of the brands and is likely to raise their sales figures. An innovative approach has been taken as well towards the format of cafés like music café, garden café, lounge café, book café, and highway café to target the imaginative customers. The companies also change their menu and setup according to seasonal changes that also attracts customers and helps them stay ahead in the competition.

Handholding franchisees

For any franchisee to survive and gain profits, it's pertinent to receive an organised and meticulous training and unrelenting support of the franchisor. On the training and support provided, Ankur Gupta, CEO and Director Brewberrys, says: “We provide complete training to the franchisee and also manage the store for him on a day-to-day level, starting from comprehensive onsite and offsite training, dedicated marketing support, centralised café software, location based cafe modules. Commenting on the growing eating out culture of Indians, Rahul Leekha, General Manager and Partner at Di Bella Coffee India believes that eating out is a common phenomenon in India. Customers tend to go to different types of restaurants. They tend to show a variety seeking behaviour in terms of outlets and food. This has created a huge potential. The industry is also growing at a rapid rate with some of the formats growing at more than 20 per cent per annum. This is characterised by its fragmentation with a large proportion being unorganised. On the training and support rendered by the company, Leekha says: “We bring our expertise and commitment to our partners and offer our franchisees extensive business experience and a proven operational system to assist them to grow quickly, efficiently and successfully.” Elaborating on it he says that the coffee-chain also deploys its teams full-time at the locations and handholds the business right from day one in order to ensure the franchisees can manage end-to-end operations of their store.

While the Juice Lounge founder and CEO, Manav Shital says: “For all the franchisees, we provide them thorough training before opening their outlets. We also provide them manuals, which give them every minute details of the business and help them in the day-to- day running of their outlets. We also have onsite training of the entire staff with our exclusive chefs and managers for the initial opening period. So we nearly eliminate most of the challenges which are faced by a franchisee in the F & B industry.”

In the F&B Industry he strongly feels that the food and beverage sector is still mostly unorganised and it needs a complete makeover. “In the last few years, brands have now been making a mark and we see that there is a huge potential in terms of growth in this industry,” he says.

Expansion

For growing a brand setting targets and having expansion plans are very essential.  Thus, Brewberrys plans to expand in markets like Pune, Delhi, Hyderabad, Chandigarh and Bangalore, both through company-owned and franchise outlets, within the next 1-2 years. Cafe Ludus plans to come up with a totally new dining concept in a location close to the currently operating Cafe Ludus. The brand is also getting ready for the outdoor catering market.  Di Bella Coffee have achieved consistent growth after setting foot in India last year and intend to further increase their presence through an exclusive franchise proposition. They have now begun to invite investors franchise partners who understand the credenda of the company and would like to join them and be a part of their winning team. In India, Di Bella Coffee have opted the franchise pathway as it provides brand recognition, economies of scale, and most importantly a localised management structure. Similarly, after seeing the success of Juice Lounge abroad in Doha and Maldives and with 50+ stores operational, they have plans to venture into other Asian countries as well.

Stumbling blocks

Among the hurdles being faced, Gupta lists human resources, real estate rentals and local licensing in some states, as the major ones. While Sidharth Chadha, General Manager, Cafe Ludus, says that this Industry is full of challenges which  is one of the best parts of being in this industry. “Every day comes with its own set of challenges and problems to deal with. No two days are alike in this industry. You have to be on your toes to tackle any problem that comes your way. The challenges could range from staff shortage, material shortage, to even an unsatisfied customer. You have got to deal with them all,” he adds.

The three biggest challenges Di Bella faced are related to real estate, manpower and over licensing. The first is about getting the right place at the right price, and is an ever-increasing challenge for the industry, especially in metro cities.

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