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CavinKare: Stepping into retail

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, the diversified FMCG major, is geared up to launch 100 exclusive Cavin’s Parlour, which would retail Cavin’s dairy products and also the personal care range from the house of Pvt. Ltd. Cavin’s Parlour is the company’s most recent venture and their first into organised retail for its FMCG range. In the beauty segment, the group is already running two highly successful salon chains – Green Trends and .

The concept

Elaborating on the recent retail concept, K.V. Krishnan, Business Head – Dairy Operation, CavinKare Pvt. Ltd. shares: “The Cavin’s Parlour is designed to serve consumers a range of Cavin’s dairy products for their day-to-day consumption ranging from milk, curd, cottage cheese, butter, clarified butter, etc. The parlour also sells our other dairy products like Cavin’s milk shake and lassi, which are targeted at kids and youngsters, thereby making it a one-stop shop for all the dairy needs of a family.” Launched in October 2014, the first store is designed in a franchise format and going ahead, the group plans to have a healthy mix of franchise-operated as well as company owned company operated (COCO) outlets. The concept is that of a self-service store.

Krishnan adds: “This concept is an added advantage for the franchisee in terms of business potential. With a constant supply of the products within the market, there is bound to be better visibility and awareness for Cavin’s, taking it one step closer to the end consumer.”

Combination of FOFO and COCO

Considering the fact that it is the group’s first retail venture in the FMCG space, it does raise some curiosity towards their mode of operation being that of a franchise-led outlet. Explaining the reason behind the decision, Krishnan reveals: “We wanted to leverage on the expertise of our channel partners like our very own stockiest and distributors. We proposed the idea to them as they have a wider knowledge about the market, supplies, cash flow and other logistics, thereby making the franchising route a more viable and successful option.”

To ensure adherence to quality and uphold the brand ethos, the group has drafted clear Standard Operating Procedures, which the franchisee partners are expected to follow. Krishnan explains: “In order to maintain ethics and the brand values, we have our audit teams visiting the outlets on a frequent basis. The parlours are rated and reviewed on various parameters like cleanliness, stock keeping, freshness of stocks, etc. and market feedback such as prompt coverage, regularity of supplies, etc.” Currently, there are 15 CavinKare outlets operational in Tamil Nadu and all the parlours are franchisee operated.

Franchisee pre-requisites

Sharing details on the franchise requirements, Krishnan says: “The space required for setting up a Cavin’s Parlour is between 250 sq.ft. and 350 sq.ft., and a preferable location would be an area with a mix of good commercial and residential population. The investment would range from Rs.2 lakh to Rs.2.5 lakh.” The investment also includes a refundable deposit of Rs. 50,000 approximately while the remaining money goes into doing the interiors, setting up refrigerators and doing the stock. There is no royalty fee involved here, which makes the business proposition extremely viable.

Jaisingh, a franchise at Red Hill, Chennai, seems happy with the business. He shares: “I was approached by personnel from CavinKare, who explained in detail about the venture. I was convinced with the various facets explained to me in terms of investments, profits, product portfolio, and support from the company, etc. CavinKare has a wide range of products in the personal care and food division apart from the dairy products, which are also available in the parlour. Having my parlour situated in Red Hills, which is just 30 km away from the main city, I have received overwhelming response. I can imagine the potential offered for parlours opened within city limits.”

Jaisingh opens his store at 4:30 a.m. and shuts down at 10 in the night. He also supplies dairy products to about 60 retail stores in this locality. As for the average ticket size, he reveals: “Our average ticket size is about Rs. 100 to Rs. 300. I make anywhere around Rs. 12,000 to Rs. 15,000 in supplying the products to the other retail and kirana outlets on a daily basis.”

The Assortment (BOX)The parlour plans to focus on selling a varied range of dairy products like Cavin’s Milk, Cavin’s UHT Milk, Cavin’s Ghee, Cavin’s Flavoured Milk, Cavin’s Curd, Cavin’s Buttermilk, Cavin’s Milkshakes, Cavin’s Lassi, and Cavin’s Soft and Diet Paneer. At a later stage, the group shall leverage the platform to retail their wide diaspora of personal care products like Chik Fairever, Nyle, Spinz Indica, Meera and Karthika; food products like Ruchi and Chinni’s Pickles; garden snacks like Alu Bhujia, Diet Sev and Soan Papdi; and Maa fruit drinks.

Reaching out to peopleTo ensure a good brand recall, innovative POPs have been utilised across various eye-catching locations in the surrounding. Krishnan adds: “To attract customers and generate maximum walk-ins on a regular basis, several discount coupons are offered and monthly milk card programmes are conducted.” As for ongoing marketing and promotion activities, the group plans to stick to the traditional method of releasing ads in dailies and magazines, and distribute leaflets and invitations prior to the launch within the neighbouring area.

Talking about all-India expansion, Krishnan says: “We will look into an aggressive national expansion in the next fiscal, 2015-16. However, in this financial year we want to increase our presence in Tamil Nadu and Kerala by opening 250 parlours as the brand and the range presence is high across these states.” He further adds: “In Tamil Nadu, we will be looking at cities and districts like Chennai, Kanchipuram, Vellore, Krishnagiri, Dharmapuri, Salem, Erode, Thiruppur, Coimbatore, Pollachi, Villupuram, Trichy, Madurai, Tanjore, Kumbakonam and Thirunelveli. In Kerala, we will look at Palkkad, Thrissur, Trivandrum, Kozhikodu and Cochin.”