Even with the likes of Starbucks and Dunkin’ Donuts setting up stores in India, Australia-based premium coffee brand Gloria Jean’s Coffees claims competition is a healthy thing and that it pushes one to deliver an even better experience for the guests. Tony White, general manager – international, Gloria Jean’s Coffees, speaks to Deeksha Batra on the growing competition, branding, expansion plans and more . Edited Excerpts:
Has the entry of international coffee players like Starbucks and Dunkin’ Donuts affected the positioning of Gloria Jean’s in the Indian market?
As a brand, we have always focused on our core offer--great coffee. So, from a positioning perspective, nothing has changed with the introduction of other global brands. For us, coffee is still our “hero” and we are committed to deliver the best-quality coffee experience from the crop to the cup, served from the heart. We source, roast and retail our coffee to ensure we can consistently offer a high-quality coffee to our guests. This will always be our priority and as a brand we are committed to delivering this across our locations throughout India.
Are you looking at any other partnership or franchising options now in India since competition has grown?
As a brand, we have taken a long-term view of the Indian market. Our strategy has always been about building a solid platform and a foundation to grow our brand on. This requires time, commitment and focus and we have been committed to that path. As a brand, we have never been absorbed by what our competitors do, as we have a very clear path and a strategic plan that we follow. This has a lot to do with developing a healthy and profitable business model to ensure we are positioned for growth in years to come. To date, all of our stores have been company owned and we are yet to foray into the franchising route. Franchising is a great vehicle to scale a business, once there is a healthy platform to build it upon. Franchising is an integral part of our growth plans for India and we would be reviewing this in the months ahead.
You initiated the concept of coffee carts in India, but it’s out of the picture now. Any development on them?
Coffee carts are an integral part of our global business, but have been used mostly for promotional purposes and to complement existing outlets. We would continue to use these carts in this manner, though we do not see them forming an integral part of our pan-India development strategy.
Have your profit margins declined? Are you making operating losses?
On the contrary, our business is growing and quite healthily, with double-digit sales growth across most stores.
Are there any challenges in the backdrop of global competition?
Our brand is present in over 40 global markets, so we know a thing or two about competing with local and global brands. Competition is a healthy thing and we embrace it, as it pushes us to deliver an even better experience for our guests.
Do you have any plans for sale of equity? Are you looking for an investor for it?
We do not have any plans to sell equity. We are very happy with the relationship and strategic direction of our Indian partner.
Are you shutting down unprofitable store locations, if any? Or, do you have plans to revamp the brand image through store formats?
A part of any brand development is the evaluation of its under-performing outlets – this is a normal part of a growing business. We are no different; we are constantly evaluating stores and are committed to the profitable replication of our stores across India. In some cases, this requires closing or relocating certain stores to ensure we stay true to this conviction. As a brand, we are continually reinventing ourselves, so rather than a revamp, you will see continual improvement and evolution of our brand as we grow our presence across India.
Are you looking at opening large outlets in India?
We have a strategic plan in place that covers all-format stores, including large-format stores in high-street locations; kiosk and cart locations in malls and institutional sites. That is a part of the beauty of our brand – we have so many store sizes and format options to suit the site – flexibility in format and approach is important for brand growth in India.
What is the breakup of all the formats in India?
There are 22 full-size formats, six kiosks and two carts.
What are the locations you’re focussing on — high-streets or malls?
We are focusing on both. A healthy brand requires a good mix of both to get solid brand penetration.
Where are your stores located now?
Currently, we have 30 stores, covering Mumbai (8), Delhi (7), Pune (6), Bangalore (4), Chennai (3) and Hyderabad (2)
How many more stores are you planning to roll-out in 2013-14?
For us, it is not about the number of stores. We have a resolve and commitment to have a major store presence in India. Getting the supply chain right and operational oversight via clustered store development is another key priority for us as a brand. It is more about the quality of the product offered, the engagement with our guests, and the profitability of our stores and partners, once we get these key things right; store growth and brand loyalty would inevitably follow. What I can say is expect to see a lot more Gloria Jean’s Coffees stores opening in the main metro cities over the course of the next year.
