Australia based Gloria Jeans’, a coffee retail chain, has started a low-cost coffee cart concept in India where you get a cup for Rs 50. But the group now says its focus is to open 30 additional high-end stores by the end of 2012. Tony White, regional general manager of Gloria Jeans’, speaks to Dilasha Seth. Edited excerpts:
Gloria Jeans’ entered India in 2008. How has the going been?
The going has been good so far. We started with a store in Bandra and Goregaon in Mumbai and then two in Bangalore in 2009.Our intention was always to expand slowly in the market as we wanted to get the business model right in three years by establishing a supply chain. Today, we have 20 stores, so we are growing slowly.
You have started with the concept of coffee carts in India. Are you expanding on that front?
Yes, we have carts in Hyderabad and Bangalore. But we are going easy on the cart business at the moment, as we want to create brand awareness about Gloria Jeans’ by opening good high-end stores. If we open too many carts, people will think of us as a cart brand. We are rolling a cart programme but we want to get the positioning right, and then we will think of expanding.
You don’t seem too keen on a low-cost cart concept?
It is an amazing concept. However, on the downside, a coffee cart serves you only coffee and not food. In India, people come to coffee stores not to just have coffee but to have a little chit-chat or in India what you call gupshup. First we want to have really good looking, high end stores serving good coffee. As people will like the coffee and ask for coffee more often near their house, only then the cart concept will work.
Can you compare the investment in opening a high end store to a cart?
A 1,500 square feet high-end store requires Rs 60 lakh investment while a cart takes Rs 15 lakh investment.
India is not a traditional coffee market. What are your expectations from India?
Yes, the Indian market is not a coffee market. But even Australia was not one. They drank tea when I grew up, but in 15 years everyone drinks coffee. In India too once they taste good coffee they recognize what good coffee tastes like. In developed markets, you have home equipment to make good coffee. They start buying beans to make coffee. That’s the process to a mature market where you want coffee at home. I am sure we will see that happening with India in a few years.
How do you assess the coffee chains in India?
You have Cafe Coffee Day in every corner. Among international chains, there is Lavazza primarily. Barista it seems may eventually become Lavazza only. You have Costa Coffee in malls. Our competition really is Coffee Bean and Lavazza Crème. We only aim at providing really good coffee and food along with good hospitality in the form of good staff who can make you come back.
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Do you train your staff?
Yes, we have training programme in the form of Coffee University, where every employee goes through training progressing from green bean to gold bean.
You do not seem to have plans venturing into Tier 2-3 cities. Why?
We first want to create brand awareness in metros. In Tier 2 cities, we do not plan to venture beyond Chandigarh and Jaipur due to supply chain issues.
How many stores are you opening next year?
By the end of 2012, we aim to open 30 additional stores in India, taking the total number of stores to 50.