Cafe chains are eyeing Eastern India as they target an expanding base of coffee lovers in the region, where changing lifestyles have spawned a booming market for cafes. In fact, coffee has changed from being a traditional beverage consumed mainly in South India to a mainstream beverage with a national presence, finds Shubhra Saini
It is quite ironical that a tea drinking nation like India has given such a warm embrace to coffee. In fact, the coffee culture in the country is flourishing; thanks to the efforts of a few coffee and cafe players. Even in the East India, many indigenous cafe brands have come in despite competition from international brands. Growth of cafes, says industry experts, will be impacted by the economic growth of the region.
Growing Popularity of Cafes
Says Siddhika Ghose Chaudhuri, owner of Wise Owl, “I come from a family that runs two restaurants: Tero Parbon and Krystal Chopstick. I wanted to give Kolkata a new breakfast place as there are very few apart from five-star hotels. The importance of breakfast is constantly being highlighted these days, and so is the trend of eating out at coffee shops. Thereafter, the idea of a place where people could get breakfast, lunch and dinner, and also casually spend time over a cup of coffee was born. This coffee shop has been my first venture after finishing my hotel management course from IIHM.”
Wise Owl is a meeting place for people from all walks of life and ages. The cafe serves continental breakfast from 7.30 to 11 a.m. every day of the week and has seating capacity for 36 to 40. Says Chaudhuri, “It reflects an English countryside with a patio and a lot of greenery, which comes as breath of fresh air amidst the bustling city of Kolkata. The café gets its name from the collection of owls that is showcased in the sitting area. Also, owls keep awake all night, and coffee keeps a lot of people awake in the night. We decided to add the word ‘wise’ because though owls are night birds, when it’s morning, the wise ones come for breakfast!”
Says Siddhant Shah, Owner of Revv Up, “The cafe culture in the East looks promising. People, especially youngsters, musicians, artists, the professional crowd, etc, are looking for informal places where they can hang out for long hours without fuss from the owners. Plus, these people have the spending power.” The place sees approximately 175 to 200 walk-ins everyday with the average bill around Rs 450.
He informs that plans are afoot to open two more Revv Up outlets in Kolkata, and he also sees Siliguri and Guwahati as prospective markets. According to him, the USP of Revv Up is its theme that connects with the youth. “We have put up PS3 gaming consoles and other board games and have themes such as comic characters, which make the place very colourful and funky!”
As regards competition, Shah says, “It is a very competitive market out there, and we have to keep innovating, such as combo offers, ladies night out, and karaoke events, to keep our customers interested and coming back for more schemes and surprises. Also, on a daily basis, we serve different types of cheesecakes and other desserts as ‘item of the day’ at discounted prices.”
Make way for Tea Cafes
While coffee cafes have made their presence felt, tea lovers can look forward to tea boutiques. Indians like to enjoy their cup of tea at home, but if tea boutiques can offer more variety in terms of types and flavours, then like their counterparts (the coffee cafes) they can attract a suitable number of patrons and even give the coffee cafes a run for their money. Dolly Roy has many firsts to her credit; she is the first woman tea taster and the first tea auctioneer in India. With a determination to change the tea drinking landscape of Kolkata, she opened a tea cafe at Dakshinapan Shopping Complex, naming it after her as Dolly’s Tea Shop.
Roy talks about her passion for the aromatic beverage, her tea cafe, and her vision of converting the understated beverage to a uber-cool drink. “I always wanted to share my passion for tea with everyone. When I opened Dolly’s Tea Shop in 1987, I started it as a specialty tea boutique. I took a three-month break from work and put the place together with the help of my staff.” The tea shop has a cosy, informal atmosphere where consumers can buy fine tea or have one served to them.
The differentiating point that makes Dolly’s no-frill tea cafe a success is its personal touch and hospitality. The all-female staff have been at Dolly’s since the tea shop started, and were personally trained by Roy. The pricing is affordable as the tea shop caters to many students from nearby colleges and schools. Flavoured ice-tea is priced between Rs 30 and Rs 40, and an average bill for two is around Rs 150.
“The potential of cafes are there but not all can survive the competitive market – only the best can. To survive, companies in this business will have to create brand value and increase scale with a chain of stores,” opines Anirudh Poddar, Director, Chai Break at Chowringee. Adds Poddar, “Cafes have become a good youth hang out place in the past 10 years. With increasing competition as more and more cafes sprout up across the region, it gives customers more options to choose from. For cafe owners, offering more product assortments and variety, schemes and experiences, will be the differentiator.” He informs that the average bill size at Chai Break is Rs 600, and average footfall is around 700.
Unique Cafe Formats
, of Picaddily Square – an English format cafe and bakery chain with two outlets in Kolkata, says, “The café culture has received a face lift in the last 10 years. What initially started as a one off meeting place for college goers is now an integral part of everyday life. It’s a place where teenagers hang out after school/college, where young professionals discuss business and families spend quality time together. “
She adds, “Cafes have metamorphosed from places that serve coffee to those who plate up exotic cuisines from around the world. I feel that increasingly more importance will be given to the food served, ingredients used, and the presentation. Cafes will provide a gourmet experience to a larger and more diverse target group in the years to come. The growth of stand-alone cafes in Kolkata has been phenomenal in the last year. Several young entrepreneurs have invested in the industry, and we expect an exponential growth not only in Kolkata but also in other cities of the East.”
Talking about the challenges for start-ups, she says, “In order to start any F&B project, approximately seven to eight licenses need to be acquired, and there is little or no information available on how to apply for them. It was our biggest challenge to run from pillar to post assimilating information related to licenses. After inception of our store in 2008, it was difficult to find suppliers in Kolkata for imported food ingredients such as French cheese and Italian herbs. Most of the ingredients we used had to be bought from suppliers based out of Mumbai or Delhi.”
Picaddily Square caters to young adults and teenagers. Its average bill size is Rs 600 and daily footfall is about 150. The outlet is known for its eggless, authentic crepes, waffles and cheesecakes.
Future of Cafes in the East
Cafes have now become places for people to meet up informally with coffee serving as the social glue! Cafes today co-exist at extreme proximities, and despite the competition the market has space for all the players. India has scope to accomodate many cafes strategically located close to offices, colleges and shopping malls. In advanced markets like Austria, the per capita consumption of coffee is 10 kg, while in the US it is about 5-6 kg. In India, this figure is currently at about 600 gm, which indicates a huge potential for café chains to proliferate. Growth of out-of-home coffee consumption in India has also contributed to the growth of in-home consumption in non-traditional markets.
The cafe culture will grow by leaps and bounds in major metros and other key tier II and III towns as well. Sums up Poddar of Chai Break, “I think there is a huge scope for cafes to grow in East India as the region has a lot of untapped markets. Plus, the property prices are low compared to the North and West so investment in this business is relatively lower. For players to compete, quality is the most important factor, along with the right pricing.”