Main Feature

A creme de la creme experience

Barista is not just about coffee, it is about the experience. The company has been treading newer paths to set the experiential coffee trend in the country. Vyas Sivanand takes a look at its strategy

Barista, a wholly owned entity of the Chennai-based Sterling Infotech Group, established itself with a big bang in February 2000. But the coffee segment faced a sudden rush by many players offering new ways of service, exposure to international varieties, and espresso methods. The country's youth had new hang-outs.

But Barista, a guest-focused company, strategically decided to sit back and reduce the number of outlets. "We wanted to consolidate the entire business. Far-flung outlets that could not be serviced properly were shut down. We would grow only when we were certain of our training, product and service," says Surjya Meher, head - marketing, Barista Coffee Company.

Barista currently has 135 outlets in the country. "We are targeting to touch a turnover of Rs 100 crore by March and break-even before the end of the financial year," says Meher.

When it comes to its promotions, Barista has done very little advertising compared to the Pizza Huts and McDonald's and Meher justifies by saying, "Different formats have a different promise. Every business has its own model. They are not meant to be hang-out places. They are meant to be eating-out places. The moment you think of a Pizza Hut, you don't think of a beverage. In a café format you actually go to meet friends over a cup of coffee."

While on the face of it, competition seems to be on high order, according to Meher, all the players put together do not cater to even 10 per cent of the market. The size of the chain format would be Rs 250-300 crore now, growing at 15 per cent. "There's scope for everybody. Today, we have 135 outlets. But when we talk of the entire country, including two-tier cities, highways and corporate parks, the opportunities are unlimited. In the West, the cafés are termed as 'next door café', but in India we are far from that term. We are grossly under-represented. The potential is huge and maybe in the coming few years the growth could touch 30-35 per cent," he says.

Barista believes in providing an extension to excitement to its customers, further to which it includes other modes of involvement within its café. "We now have Wi-Fi, later we will have to add more value by providing some other facility. We have to give our customers a different reason for coming in every time. The only thing that will be constant in a Barista would be the quality of its coffee, rest everything will keep changing," says Meher.

The company is not following the strategy followed by its competitor, Café Coffee Day of going for the kiosk format, where it is just coffee and no experience attached. "It is a business policy. When I talk of Barista, I talk of an experience. In a kiosk, we will be able to offer only a cup of coffee," she continues. "The Barista philosophy is not comfortable with that. I do not think that we are competing with a Café Coffee Day or a Pizza Hut, I think we are competing with probably a theater or a mall or even a park. Our advantage over others is the service backup."

Barista is now on an expansion mode with more focus towards the south, namely Bangalore and Hyderabad. These cities have fewer outlets than the city's requirements. "A city like Bangalore can take about 400 outlets and run profitably. The focus has been towards the northern sector but now the accent will be towards the south. We are essentially looking at the top six cities. But we also believe that it pays to be the first in a lower rung city like Coimbatore, Baroda, etc.," says Meher.

Innovating constantly, to meet customer expectation, Barista has also opened Barista Crème, a premium store, over a larger area with plush interiors, comfort seating, table service and new range of products.

"Each Crème is like two or three Baristas in terms of revenue, and that is huge. Next year, Crèmes would contribute about 20 per cent to our revenue. We have opened the first in Delhi. The feedback has surpassed our expectations. We would love to open one Crème per month. We just opened a Crème outlet in Hyderabad and Indore. We will be opening two more in Delhi soon," says Meher.