The concept of takeaway is growing among Indians as they shop across malls, travel or just take a walk. Keeping in mind this changing trend, a lot of food and beverages service companies have started putting up smaller shops to offer a takeaway service. These takeaway zones are called kiosks, which are now becoming a greater trend as compared to restaurants. In fact, to some extent, the service providers are now giving more importance to the kiosks as they are easier to set up in terms of space and other costs involved.
“The kiosk system is a hugely successful takeaway concept. In today’s fast paced lives, our CDX kiosks are a unique food retailing concept launched to provide fast, hygienic, convenient-to-eat and affordable food and beverages. This low investment-high returns business model can started within 10-15 days of the location agreement being signed. The model is simple and the returns on investment (ROI) are good,” says A G Puttaraj, President, Coffee Day Xpress (CDX).
Santhosh Unni, CEO, Costa Coffee India, says, “Kiosks are now becoming a trend and a right format for corporate houses, hospitals and malls, where the footfall is high and people generally prefer a takeaway concept. Though the business offers stagnant sales, it is emerging as a good business prospect as the cost involved is comparatively low.”
CAPEX to set up a kiosk:
- CCD Xpress: Rs 5 lakh
- Costa Coffee: Rs 15 lakh
- Kaati Zone (excluding rent deposit): Indoor kiosk – Rs 8 lakh
Outdoor kiosk – Rs 10 lakh
What works for a kiosk
Kiosks are easy to operate but only if a few criteria are set in place for space, customers, hygiene and menu.
In terms of menu, the companies are likely to offer the products available at their bigger stores so as to ensure that the customer doesn’t miss out on any of their offerings.
CDX takes a step ahead in this by developing new items and changing the menu completely every two months. “This constant change makes the customers walk in to find new food items, apart from the basic products. Hence, they never get bored. Our most recent addition is a new range of delicious and healthy tomato and chicken soups, Badam Milk, varieties of pastries and desserts,” says Puttaraj.
Important aspects of business
The target customers and the area of operations of a kiosk are the two most important and inter-dependent aspects of the business. Kiosks have a very limited section of target customers and area of operation. To choose the right space to operate a kiosk is one of the crucial parts of the complete operation. “Kiosks have a different set of target customers, especially for our kind of food. We cater to Sec A and Sec B consumers in the age group of 17 to 50. Kiosks ideally serve customers in busy environments, such as shopping areas, high streets, malls, business parks, and transit locations like airports, railway stations and highway,” says Kiran Nadkarni, CEO, Kaati Zone.
In order to acquire a kiosk, every company has a different process. Costa pre-acquires space for kiosks through its property acquisition team, keeping in mind the location and footfall. All the Costa kiosks are company owned.
“We operate in two kinds of formats – indoor and outdoor. Our business development team visits the location, does the feasibility study and if approved, proceeds further for documentation. We open only company-owned outlets, except in very rare cases, where a franchisee owns the location. For acquiring a CDX franchisee, a deposit needs to be paid for a three to five year lock-in period. All the capital items, including the kiosk, machinery and food items are supplied by the company,” says Puttaraj.
Nadkarni explains, “Our business development team and franchisees are always looking for ideal locations for kiosk stores. Our kiosks and equipment have a standard design and are manufactured by approved vendors to our specifications. The kiosk structure is shipped to the store location in completely knocked down condition and assembled within 24 hours.”
Cleanliness is important for business
A major area of concern in operating a kiosk is maintenance and hygiene, which needs to be taken care of with utmost importance. A company ensures quality check of food supplies, while the kiosk manager has to ensure cleanliness around the kiosk.
Unni says “As far as the food supply is concerned, we follow stringent certifications and our suppliers are certified, but when it comes to cleanliness in and around the kiosks, it is the duty of the manager at the kiosk to take care of it.”
CDX does not believe in over-decorating the kiosks and keeps them neat to avoid mess. “We have quality checks and control measurements at regular intervals. Moreover, our kiosks are designed with international standards, which ensure that our hygiene standards are well maintained during the operations.” add Puttaraj.
Kaati Zone, along with adhering to its food quality standards, also has separate food storage and preparation areas for vegetarian and non-vegetarian items, which the staff handles with gloves.
Kiosks are now gaining their momentum within the business and offering a decent percentage of returns to the companies. For Kaati Zone, an upcoming chain in south and west India, kiosks are a small percentage of the total retail space. But these stores are providing its franchisees return on investment of over 50 per cent per annum.
With the opening of a lot of avenues, kiosks are slowly and gradually becoming an important vertical of many food and beverage service companies. “The business is in its nascent stages and though the profits are not very high, it is still a win-win proposition as the investments are very low and the returns are fair,” concludes Unni.
Current number of kiosks in India:
- CDX: 900-plus in tier II and tier III cities
- Kaati Zone: 7 operating in Bangalore, Hyderabad and Mumbai
- Costa Coffee: 25 in Delhi, Mumbai, Bangalore and Pune