With coffee becoming the big thing in the Indian Food & Beverages segment, we frequently hear of new brands entering the market. In such competition, all it takes to become successful is being different. KS Narayanan, CEO of Blue Foods, and representative of Coffee Bean, shares the journey of the brand in the Indian market and its strong points.
Aadeetya Sriram (AS): When was Coffee bean started and how has it evolved across markets?
KS Narayanan (KN): Coffee bean started off in California and moved on from there to position itself rather sharply. Not only did the brand deliver an outstanding product with continuous innovation to its menu, the whole ambience illustrates the philosophy of the brand, the service element. So, any customer who walks in Coffee Bean is treated like a royal guest. This brand is not for any average consumer; it is clearly for the discerning consumer, who is well-travelled, who knows coffee and who has tasted different varieties. We are operating successfully across 22 countries with close to 1,000 stores and growing further. Even if we take markets that are closer to India, like Malaysia, Singapore, Korea, Middle East etc, Coffee Bean has done extremely well, built an entire coffee culture in terms of its product offerings. Same is the case with the Indian market; our experience has been good and we hope to keep it that way.
AS: Coffee Bean has entered the Indian market only recently. How has the response been?
KN: Coffee Bean entered the Indian market in 2008 and our first outlet was opened in the capital. At present, we have 17 stores in India, operating primarily through the metros in the country. Our planning is based on not only the beverages we offer but the food-menu offerings are also an integral part of our set-up. We have a central kitchen with specialist chefs taking care of the menu, hence it is not feasible for us to open in the middle of nowhere and operate. We are present in the East, with stores in Kolkata, and they have done extremely well in a short time-frame. With the Indian consumer well travelled, exposed and educated, these factors have created a surrounding where the scope for coffee-business is
AS: Could you elaborate on the varied product offerings from Coffee Bean?
KN: If you talk about the product offerings, the entire menu is coming to us from the US, including the coffee bean, 100% Arabica comes from the States. Till date, we have not tried to experiment with localising our product offerings, simply because of the fact that we aspire to maintain consistency throughout the global market, where Coffee Bean is present. Also, with the food menu, we have done thorough study and the food is prepared by the finest chefs in the industry from across the globe.
AS: Is the coffee market in India mature enough for brands like Coffee Bean to experiment? What will be your focus?
KN: I don’t think we have saturated the market; there is still a lot of scope in the F&B sector. We still have a long way to go; we will continue to focus on the markets where the discerning customers are
available, which is essential for us to operate.
AS: What are the criteria of location for a Coffee Bean outlet?
KN: Our preference for a store location primarily comprises of store size ranging at least 1,400 sq ft. As far as the location is concerned, we need to tap in the right catchment because cafes in general are spread across varied segments and it is for us to decide where would like to position ourselves with Coffee Bean, so it does not matter whether it is in malls or high-street or standalone. We are present in the affluent areas in Delhi, Mumbai and other metro cities.
AS: With increasing competition in the market, is there any danger to the brand image of Coffee
KN: Well, for us the market is going to be the usual, purely because of the fact that if you look at Coffee Bean and Tea Leaf worldwide, where they are present in 22 countries, they have held on to their position and grown in the last 3-5 years. We will continue to do what we have been doing – remain focused and not get dithered by the entering competition. Customers are already used to our products, hence the first mover benefit will aid us in this regard.
AS: India has traditionally been a tea-drinking country. How have you tapped into the contrary?
KN: Tea for us, as the name mentions, is the secondary source of revenue. That said, we have an amazing range of tea offerings sourced across from various exotic locations around the world. Tea contributes around 15 per cent of our sales, which is pretty healthy considering how much other cafes rake in from this segment. We have 25 different types of teas available with us, which range from unfermentive tea to white, black, green etc.
AS: Please tell us about your educational and professional background.
KN: I did my graduation in engineering from IIT Madras. I have been a part of the Food & Processing industry for more than 23 years. I was earlier with Unilever, handling their food business in India andEurope. I have worked with McCain Foods as its MD for South Asia.
AS: How are you managing the back-end operations for Coffee Bean, which is considered one of the
biggest challenges in the country?
KN: When you talk about supply-chain mechanism for café, it is not only about sourcing the coffee. Also a part of the set-up is the entire menu, the cold-storage, stocking of products, etc. It is a complex thing and not easy for someone to start up a café by keeping just coffee in mind. Also, one needs to make sure that one has a set of trained personnel to handle the operations, else the entire outlet can go haywire. It is imperative in the food industry that one understands that the ingredients used are checked on a consistent basis, which guarantees quality. One must ensure that adequate training is
provided to the staff, which will work in favour of the brand.
AS: What has been the marketing strategy for Coffee Bean in India?
KN: Our marketing strategy is aligned with our parent company, which is Coffee Bean worldwide. We do some amount of local activation in-store. We primarily believe in reaching out to our customers and communicating with them directly though letters, e-mailers, etc.