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“It is about creating experience through innovative beverages”
Monday, 08 June, 2020, 08 : 00 AM [IST]
India may be one of the major exporters of coffee in the world, but when it comes to high quality coffee, the market is extremely small. If the market is expanded, then India will hold a huge potential as a high quality retailer. Coffee is more about what is in a cup, creating an experience through the ambience of stores it is vended from. Besides innovating coffee beverages on the menu with the food that complements it, Sushant Goel, co-founder and director, Third Wave Coffee, tells Nandita Vijay, in an email interview. Excerpts:

How would you describe the current scene for coffee in India?
India may be one of the major exporters of coffee in the world but when it comes to high quality coffee, the market is extremely small. If we continue to expand this market, India has a huge potential to become one of the major retailers of high-quality coffee. For an exceptionally long time India has been seen as a tea-drinking-country but this is slowly changing, thanks to millennials who are especially open to trying new stuff. Coffee has become a ‘go-to-beverage’ for them and a café with an appealing ambience is the ideal ‘go-to-place’ for experience seeking millennials.

What are the visible trends that you sight in coffee consumption and outlets in India?
Today, we see a visible shift with the consumption pattern moving from just ‘eating out’ to ‘eating out which is experience-driven’. This is mainly because of the millennials who comprise 34% of India’s population and are inclined towards coffee. This trend will fuel the QSR (quick service restaurant) segment at a much faster rate in the near future.

What are the challenges for coffee entrepreneurs like you to grow?
We aim to create an experience around coffee in India through cafes focussing on category building among millennials. In order to provide this premium experience, locations of cafes must be in prime areas. However, access to such real estate is tough in India, especially in cities like Bengaluru, Hyderabad and Pune.

How has Third Wave Coffee (TWC) fared since its inception in 2015?
Since inception, TWC has achieved tremendous success. Our focus has always been on introducing Indians to delicious coffee brewed to perfection with an innovative twist. It was not easy in the beginning as the market was exceedingly small. We spent a year on research and development and in setting up the supply chain. As of today, we have 10 stores in Bengaluru and two stores each in Pune and Hyderabad. We plan to set up more stores in the near future in across India.

How have you positioned TWC in a market which is brimming with cafes?
Now TWC prides itself on innovation and delicious coffee brewed to perfection. This is seen in the variety of beverages featured on our menu. Right from pouring the perfect French Press, Pour Over, AeroPress or Syphon to flavourful lattes like Orange Zest Mocha, La Vie En Rose, Sea Salt Mocha, the TWC drives itself towards the single-minded effort of bringing delectable coffee to Indians at accessible prices.

What are the company's key differentiators?
For us, coffee is more about what is in a cup, it is about creating an experience through the ambience in our stores, innovative beverages on the menu and the food that complements it. Our aim is to ensure that our customers have a memorable experience at the store which is worth reliving. We are providing a delicious coffee experience while building a brand. We achieve this by taking great care to ensure quality, flavour, and freshness right from bean up to the perfectly brewed delicious cup of coffee. With 100% Arabica coffee sourced directly from origin, freshly roasted in small batches and ground at the cafe, TWC aims at serving delicious coffee that is brewed to perfection.

Which are the fastest growing offerings in food and beverage?
As far as beverages go, cold brews and ice lattes are fast moving products. Our fusion-based iced lattes too are much raved. Baked food items on our menu are fast moving since they are wholesome, indulgent and complement our beverages.

How have you managed the real estate costs in the city as you expanded?
We primarily choose our location based on the concentration of our target customers. Our focus here is to build the brand among the right target customers and if required, we set up shop in locations that our target customers often frequent, even though it is at a premium.

Provide your growth path from the first cafe to the 14th and at what duration did this take place?
We started off with high street locations in Bengaluru to give customers an experience of coffee brewed to perfection. In order to cater to different consumer segments, we have adapted our store formats uniquely basis the location it will be housed in.

What kind of funding was raised to set up the first cafe and then move on to the 14th? How receptive are VCs and PEs to fund coffee ventures in India?
While the initial funding was bootstrapped, the quality of our food and beverages was one of the main factors that helped us open 14 stores. For VCs and PEs to fund, it depends on how the offerings are positioned from the competitors.

Is it the physical coffee bars or the online sales which are garnering much of the revenues for you?
Currently, with the Covid-19 lockdown restrictions, our takeaway sales are more or less equal to the sales fulfilled by our delivery partners.

What led you to have a dedicated app and how is it faring?
Well, a few years ago the idea of ‘pre-purchase’ was rare, and we realised early that the ‘app’ culture of today’s millennial would be the apt way to introduce them to the ‘experience of a perfect brew’. They were conscious of the fact that only a brand with remarkably high brand equity would make customers pre-buy future orders. Thus, we embarked on the ambitious project of creating an app that would sell subscriptions in India.

Through the app customers rewarded with Third Wave Coins for every transaction, and on reaching certain milestones the coins could be redeemed for free food and beverages. TWC then launched an array of attractive beverage offer packs on its app. A wide variety of packs were introduced for customers to choose from depending on their preferences. There are subscription packs for Summer Special packs, Cold Beverages pack, Cappuccino, Classic, Manual Brew, Coffee bean pack, etc. This was an ambitious project as there was no coffee app selling subscriptions in India. In just four weeks we witnessed 10,000 downloads, with 60% coming in from referrals, indicating the love consumers had for the brand.

You have bagged awards. Give us the details.
Our company was ranked 15th in the Top 50 Coffee Shops in the world by Big Seven Travel. The others are the National Barista Championship 2018, 2019, Won Women Star Brewing Barista Championship (WCAI) 2019, Top 10 Cafés to Open in India 2016, NDTV and the Café of the Year- Restaurant Awards 2019, South India edition and the India International Coffee Festival 2018- Best Micro Roaster-Café Award 2018 for French Press Coffee.

In this Covid-19 scenario how has the business been able to cope?
There is no doubt that the pandemic will have an impact on all businesses, but we have to stay resilient. We follow the state’s lockdown regulations with limited stores open for takeaways and deliveries. We did not want our customers to lose out on their favourite brews so went ahead with the launch of the new menu. To nudge consumers to make coffee at home, we had our Baristas create videos on making beverages at home without complex equipment. We have not let the pandemic come in the way of our customers enjoying their cup of coffee and we have ensured our coffee and coffee beans reach them through orders serviced by our delivery partners. We know our customers are missing their favourite café, so with every delivery to rekindle good memories we are sending across the ‘Spotify’ a digital music platform with playlists from our store.

What are the measures adopted to keep your staff safe? What are the likely future efforts to grow the business post this pandemic?
We have made a mandatory single-point-entry for our staff in our cafes while ensuring meticulous and regular sanitisation of our stores. We have regular temperature checks of our staff and delivery partners. We have additionally set up contactless delivery stations at our stores. We will follow the government guidelines to ensure safety of our patrons and employees.
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