Spilling the beans over real estate strategies
Established in the year 2000, Barista Coffee Company is the pioneer of coffee culture in India. Puneet Gulati, Chief Executive Officer, Barista Coffee Company Ltd spoke to Realty+ about its market expansion & real estate strategy.
What is Barista’s current market share?
Barista’s India market share is close to 12% in the organized cafe chain market. Our focus is to invest in sustainable locations and not chase the rat race of being visible like other competitors. Our ratio of closure viz category is very low in the last 3 years. Currently sitting pretty at 200 plus stores with a closing number targeted at 250 by March 19, we easily will be at 400-500 stores in next 3-4 years. Besides India, Barista Coffee also has cafés in locations across Sri Lanka, Myanmar, Nepal, and the Maldives.
What is the franchise route of the brand and its tie-ups?
The franchise route has been a very successful module for us and helped us grow at a sustainable pace. Advantage with Franchise model is a reach beyond just the existing territories and working with likeminded partners who can nurture the brand the same way and partners who possess much more intellect on the local markets and their sustainability. Further we have also been working closely with many brands on diverse platforms at a national level such as Paytm, Swiggyetc for increased market reach and consumer experience.
What are some of the real estate considerations for the brand?
Key considerations for a mall space are footfalls of the mall, target audience, locations within the mall, rent to revenue expectations, competition spread. We also work on customizing some of our product portfolio basis the consumer profiles.
How important is the store design to enhance brands recall value?
Store design and layout is one of the important pillars for a brand to sustain as consumers delight is linked to their experience with F&B and their comfort while dining. A good looking store will always help to drive footfalls and eventually a good product adds to the guest loyalty. We have dedicated teams that work on multiple design formats that are well suited for various formats and locations. Barista works alongside the following four store formats.
- Diner – the flagship format with live food preparation and rich and urban in term of look and feel with larger area.
- Barista Cafe – the regular store format
- Barista Kiosk – format that is well suited for atriums and corporate locations with all offerings of a café.
- Barista Express – a much smallest format with a setup within 50-75sqft of space integrated with quick bites and barista beverages suited for transit hubs, cineplexes, food courts and similar catchments.
What is Barista growth strategy for Tier-2 & 3 cities?
Currently we are already exposed to 47 cities in India and already growing at a good run rate. Tier 2&3 cities today have also evolved in their spending patterns and looking at metros and Tier 1 cities for brand exposure, a known brand would always do well in Tier 2 and Tier 3 at the right price points, we are committed to cluster wise growth to expand in Tier2 and Tier 3 cities. Our strategy is to expand through giving cluster rights to develop these areas.
Given high real estate prices, is consolidation the way forward for F&B/Coffee shop brands?
Coffee and F&B business is always driven by good location, reach and brand equity. A good location would always be preferred by all. Consolidation may happen only in a scenario where brands are not able to stabilize and real estate would not be the only reason. With wide spread of Indian palate and spread of income groups there will always be space for multiple brands operating.