Thanks to the Rs 40 crore (Rs 400 million) investment being made by its promoter Sterling Infotech Group, Barista Coffee Company Limited is changing gears.
Sterling, which bought 65 per cent shares in Barista from Turner Morrison and picked up the remaining 35 per cent from Tata Coffee Limited last December, is expecting the chain of coffee bars to shore up its margins and rework its corporate and marketing strategies.
Opening of the first premium café -- Barista Crème -- in the Capital may just be the beginning of that change. Barista CEO Partha Dattagupta admits that the company is on an expansion drive.
"The last few years were spent in consolidation. This year we are concentrating on growth and enhancing the Barista brand," he says.
Besides, the coffee chain hasn't done too badly either. "We have been growing at 20 per cent in sales and are profitable at the store operating margin level. Now our focus is to be cash positive by the end of this fiscal," he maintains. A food and beverage company normally takes 5-6 years to break even, he adds.
By the end of the year, Barista plans to add 60 more outlets to its existing 120 in over 20 cities. Aggressive expansion in the south appears to be on the cards as Sterling, the south India-based group sees a great potential in the coffee drinking regions of Coimbatore, Mysore and Cochin. It also plans to enter Punjab.
A new differential pricing policy is being followed to ensure that Barista coffee comes cheaper in these markets as compared to Delhi, Mumbai and Bangalore.
Besides adding a range of delectable accompaniments on the menu, streamlining costs has been on top of the management agenda.
It was towards this end that a national alliance with the Corner Book Store was forged some time back. Today about 20 outlets across the country have the bookstore sharing space and the rent.
Moreover, Barista has recently reworked its rent to revenue ratio as well. "We realised it was one of the biggest killers and we didn't want to pay very high rents. So we have fixed a benchmark of less than 18 per cent," informs the CEO.
While Barista refuses to advertise in print or television media, it is engaging in promotional activities around the outlet.
Besides, it is giving special attention to enhance the guest experience to ensure higher footfalls. The outlets are experimenting with things like inviting artists to sketch the guests free of cost, holding street plays and organising live bands on weekends.
"We're perfecting various activities to create excitement and promise that differential experience at Barista," sums up Dattagupta.
