Category: Food

Retail News Asia is committed to providing both local and global retailers with the latest Food and Food & Beverage news throughout the Asian market. This on a daily base.

  • JD to grow its own vegetables for sale on and offline

    JD to grow its own vegetables for sale on and offline

    JD has partnered with Japanese chemical manufacturing giant Mitsubishi Chemical to open the largest hydroponic “plant factory” in China. The omnichannel retailer says the premium-quality, fresh produce produced at the new facility will provide its customers with new options for safe, nutritious and environmentally friendly food, online as well as offline at its 7Fresh supermarkets.

    The factory spans 11,040sqm and incorporates a hydroponic culturing system with solar light and a closed seedling production environment using artificial light. Currently it can produce spinach, cabbage, red and green lettuce, coriander, among others.

    All crops produced at the site are tracked from the time they are planted to when they are delivered, a step toward the future of food production and retail as consumers worldwide increasingly demand transparency. In China, in particular, consumers place high importance on food safety while the overuse of fertiliser, environmental deterioration, and rapid population increase have caused soil problems.

    In the new facility, temperature, humidity, light, and liquid fertiliser are automatically controlled by the factory’s management system, enabling more standardised production of high-quality vegetables without the challenge of seasonal changes. For example, spinach produced in the facility contains 80 per cent more folate, 32 per cent more vitamin C, 25 per cent more potassium and 37 per cent more phosphorus than if grown in the field. Meanwhile, the technology makes pesticides and agrochemicals unnecessary, reducing the need for washing.

    The factory can produce a higher output of vegetables than traditional agriculture systems; it can grow 19 batches of spinach in a year, compared to just four batches per year in a field or six per year in a greenhouse. It only requires half a litre of water to grow any of the factory’s vegetables. The factory is integrated with JD’s cold-chain logistics network, so vegetables can be delivered to consumers’ tables as soon as the same day they are harvested.

    “The JD Plant Factory in Tongzhou marks JD’s entry into the very beginning of the fresh-food production chain, allowing us to guarantee that the fresh goods we sell have been treated with the care JD applies to everything we do,” said Xiaosong Wang, president of JD FMCG and food businesses.

    “JD’s supply chain technology, logistics network and e-commerce expertise combined with Mitsubishi Chemical’s sophisticated growing technology puts us in an ideal position to create an entirely new model for agriculture, and cultivates a fresh and healthy lifestyle in China.”

    Fresh vegetables from the plant factory will be available on JD.com and at 7Fresh stores from this month. JD and Mitsubishi Chemical will cooperate to introduce more fruits and vegetables in the future.

  • Remodeled M&M’S World Shanghai reopened

    Remodeled M&M’S World Shanghai reopened

    M&Ms World Shanghai reopened yesterday in Shanghai Shimao International Plaza. The newly remodeled 1600sqm interactive store, which offers an immersive, personalised experience with the M&M brand to residents and tourists, remains the only one based in Asia.

    The store is part of the global M&Ms retail business, which includes My M&Ms’ e-commerce sites and a B2B channel in the US and Europe.

    The M&Ms World Shanghai experience store features a “Great Wall of Chocolate” made out of more than 1 million M&Ms, a personalised printer, and a device that scans customers to create a personalised M&Ms avatar. It also features an improved checkout experience that allows mobile payment options from Alipay, WeChat and Apple Pay.

  • KKR to acquire significant stake in V3, TWG Tea

    KKR to acquire significant stake in V3, TWG Tea

    Private equity company KKR is to invest as much as S$500 million (US$366 million) into V3, the parent of cafe chain TWG Tea and massage chair retailer Osim, to fund regional expansion. In a deal which mixes equity and financing, KKR will take an unspecified “significant stake” in V3, which is effectively valued at S$1.7 billion. V3 is the company which resulted from last year’s restructuring of once-listed Osim International after plans for an IPO were shelved.

    Keith Magnus, chairman of Evercore Asia, which advised V3 on the deal said that the investment by KKR represents a more than 50 per cent increase in enterprise value compared to when the group was taken private.

    “This is a phenomenal premium for [Ron] Sim,” said Magnus.

    Sim remains the chairman, chief executive and controlling shareholder of V3. Sim, who remains chairman, CEO and controlling shareholder of the business added in a statement: “I am extremely pleased to welcome KKR as a significant shareholder in V3. I am confident this investment will position the company for our next phase of growth, starting with the immediate expansion of TWG Tea in Japan and the US and of Osim in China.

    “We would also be looking into M&A opportunities that are earnings accretive.”

    V3 also owns the rights to retail GNC nutritional supplements in Singapore, Malaysia, the Philippines and Taiwan.

    Sim says V3’s revenue cleared S$600 million last year and profit was also up.

  • Zomato India to expand food delivery business to 100 cities

    Zomato India to expand food delivery business to 100 cities

    Online restaurant guide and food ordering firm Zomato on Friday said it is expanding food delivery services to 100 cities over the next week.

    The company’s food delivery services are currently present across 93 cities and lists over 75,000 restaurants on the platform, Zomato said in a statement.

    “… the food delivery business is ramping up really well with the growth in main markets, as well as the reception in tier II tier III cities,” Deepinder Goyal, Founder and CEO, Zomato said.

    Founded by Goyal and Pankaj Chaddah in 2008, Zomato is a restaurant search and discovery platform providing in-depth information for over 1.4 million restaurants across 24 countries and serves more than 50 million users every month.

  • Thai’s The Lobster Lab expands to China

    Thai’s The Lobster Lab expands to China

    Thai restaurant concept The Lobster Lab has opened its first outlet in Shanghai.

    The restaurant, operated by Bangkok-based Thai Union Group opened inside one of Alibaba’s Hema supermarkets last month. It serves lobster rolls, seafood chowder and some western dishes.

    The concept is based on Thai Union’s King Oscar brand, a dine-in and takeout restaurant which serves fresh lobsters imported from the US and Canada to meet “the growing Chinese consumer’s demand for tasty and nutritious seafood”.

    Thai Union also owns the American-style seafood restaurant chain Red Lobster and plans to open one of those stores inside IFC mall in Shanghai soon.

    The Lobster Lab is part of Thammachart Seafood Retail, of which Thai Union owns 25 per cent.

  • KFC Thailand benefits from transforming franchise model

    KFC Thailand benefits from transforming franchise model

    Fast-food restaurant chain KFC Thailand is on track to achieve double digit year-end sales growth since transforming itself into a 100-per-cent franchised model, exceeding business expectations.The largest restaurant chain in Thailand is also set to accomplish a record high of 75 new outlet openings this year, 39 per cent above target and pushing the total number of outlets in Thailand past 700, including 65 drive-through branches.

    GM for KFC, Yum Restaurants International (Thailand) Waewkanee Assoratgoon said Yum Thailand has successfully transformed itself into a 100-per cent franchisor business in only one year.

    “Our organisation is now in a good shape with an effective structure so that we can expect the most efficiency within the entire business operation.”

    KFC Thailand franchise operator Yrit secured the No 1 position and top-of-mind QSR brand as surveyed by Thai business magazinesMarketeer and Brandage, as well as picking up awards for social media penetration.

    Thailand is KFC’s eighth largest international market.

  • Kenanga Malaysia raises earnings outlook for Carlsberg

    Kenanga Research has increased its FY18 and FY19 earnings for Carlsberg Brewery Malaysia Bhd on the back of improved contributions from Lion Brewery in Sri Lanka.

    “We increased our FY18E and FY19E earnings by 4.3% and 3.5% respectively as we improved contributions from Lion Brewery. Additionally, we increased our Malaysian demand assumptions following the stronger results,” it said in its report today.

    For the nine months ended Sept 30, the group reported core Patami of RM205 million, which amounted to 82% of Kenanga Research’s full-year expectations.

    “We deem this to be above but within our consensus estimates, mainly due to better-than-expected contribution from its Sri Lankan associate, Lion Brewery. Malaysian sales were also better than expected, subsequent to our previous adjustments for softer demand post-Sales and Services Tax (SST),” it said.

    Moving forward, it expects Carlsberg’s on-trade sales (at food and beverage establishments) to be dented by Sales and Services Tax finally kicking in, as these establishments would have to bear the brunt of both taxes.

    “We anticipate demand to be skewed towards the off-trade market (retails, supermarkets), albeit being a lower margin channel. Still, the group’s continued emphasis on its premium mix could bolster the overall performance in the local scene,” it said.

    Meanwhile, HLIB Research does not expect any hike in alcohol excise duty as the structure is already the third highest globally.

    “We opine a hike in excise duty would result in growth in the illicit market at the expense of the legal volumes, which will result in reduced tax collection. For this reason, a hike in alcohol excise duties is unlikely,” it said in its report.

    It expects the government and Royal Malaysian Customs to continue their efforts to fight contraband and strengthen the legitimate tax paying portion of the beer market in Malaysia and hence the government’s revenue collection of excise duty.

    On the recent increase in the minimum age for purchasing alcohol to 21, it expects this to result in lower industry volumes due to a smaller pool of legal consumers.

    HLIB Research maintained its “buy” call with an unchanged target price of RM22.70.

    Carlsberg’s share price fell 1.62% or 32 sen to close at RM19.40 with 51,600 shares traded. It was one of the top losers on the bourse this week.

  • Vietnam Jan-Nov coffee exports up 23 pct, rice 4.8 pct

    Vietnam Jan-Nov coffee exports up 23 pct, rice 4.8 pct

    Vietnam’s coffee export volumes from January to November have grown 23 percent year-on-year and rice exports have risen by 4.8 percent, official data shows.

    Coffee

    Coffee exports from Vietnam will climb an estimated 23 percent between January and November from a year ago to 1.725 million tonnes, equal to 28.75 million 60-kg bags, the General Statistics Office said in a report on Thursday.

    Coffee export revenue for Vietnam, the world’s biggest producer of the robusta bean, will edge up 2.9 percent to $3.3 billion in the 11-month period, the report said.

    November coffee exports were estimated at 140,000 tonnes, worth $264 million.

    Rice

    Rice exports in January-November from Vietnam were forecast to rise 4.8 percent from a year ago to 5.7 million tonnes. Revenue from rice exports in the period was expected to grow 16.8 percent year-on-year to $2.86 billion.

    November rice exports from Vietnam, the world’s third-largest shipper of the grain, were estimated at 450,000 tonnes, worth $218 million.

    Energy

    Vietnam’s January-November crude oil exports were seen plunging 42.5 percent year-on-year to an estimated 3.6 million tonnes.

    Crude oil export revenue in the first 11 months of 2018 were expected to decline 20.4 percent to $2.1 billion.

    Oil product imports in the 11-month period were estimated at 10.7 million tonnes, falling 8.1 percent from the same period last year, while the value of product imports rose 15.4 percent to $7.3 billion.

    Vietnam’s January-to-November liquefied petroleum gas imports were seen increasing 1.5 percent from a year earlier to 1.3 million tonnes.

  • Cafe Amazon preparing Coffee Shop concept to challenge Starbucks

    Cafe Amazon preparing Coffee Shop concept to challenge Starbucks

    Thai oil company PTT plans to spin off its Cafe Amazon division and build a coffee chain it says will one day rival Starbucks. The company says it will open 20,000 cafes globally, nearly 10 times the current network of 2300 outlets in Thailand, the Philippines, Laos, Cambodia, Myanmar and Japan.

    PTT will invest US$1.3 billion in the Cafe Amazon brand over the next five years to develop the franchise business.

    “We aim to build the Cafe Amazon into a top 10 global brand over the next five years,” said PTT Oil and Retail CEO Jiraporn Khaosawas.

    The move signals PTT’s turn towards the retail business at a time when it stands poised to be floated next year, initially into China and the Middle East via franchise partnerships.

    PTT announced plans earlier this year to sell off half of its retail holdings, which generate 20 per cent of the group’s profits, including takings of THB10 billion (US$303 million) from Cafe Amazon last year. The firm has declined to reveal how much it expects to raise in the floatation, although experts have valued the firm’s retail unit at roughly THB120 billion ($3.6 billion).

    PTT’s executive VP for the retail oil business Suchat Ramarch said: “We will not only expand Cafe Amazon, but we will also expand our petrol stations and our lube oil retail business. However, Cafe Amazon will be the highlight, with strong potential to grow.”

    Informed estimates suggest it would cost about THB2.3 million ($70,000) to open a Cafe Amazon shop in a PTT gas station, and from $100,000 to $300,000 for a stand-alone outlet.

  • Vietnam’s food processing industry an appetizing option for investors

    Vietnam’s food processing industry an appetizing option for investors

    With huge untapped potential and steady growth, Vietnam’s food processing industry promises much for foreign investors, officials say. In Ho Chi Minh City, Vietnam’s biggest city, the food processing industry grew by 8.7 percent and the beverage production sector grew by 4.6 percent in the first ten months of this year, according to the municipal trade department.

    The industry’s products are sold at 2,280 convenience stores in the city, up 507 stores over 2017, it said.

    In the past five years, Vietnam’s annual consumption of processed food and beverages has grown at an average of 9.68 percent and 6.66 percent respectively, says data compiled by the Ministry of Industry and Trade.

    In 2013-2017, the industrial production index grew by an average 6.8 percent per year for processed food and 9.7 percent for drinks, Deputy Minister of Industry and Trade Do Thang Hai said at a recent seminar in HCMC.

    The country’s annual food consumption value is estimated to make up 15 percent of its gross domestic product, he said, adding that the figure is about to grow bigger thanks to higher annual incomes and the increasing trend of consuming ready-to-eat food, especially organic ones.

    In the first nine months this year, the consumption index grew by 8 percent and 10.2 percent against the same period last year for processed food and drinks, respectively, according to the Vietnam Report Joint Stock Company, a Hanoi-based market research and business assessment firm.

    The Business Monitor International (BMI) projected earlier this year that Vietnam’s food industry will grow by 10.9 percent each year between 2015 and 2020.

    Tran Kim Oanh, director of the Investment Promotion Center for Industry under the Vietnam Trade Promotion Agency, said that in the 2010-2016 period, the number of companies operating in the sector made up two percent of the total, but their total revenue accounted for 7.3 percent, or $54 billion.

    With more than half of a population of 95 million of working age, Vietnam’s food processing industry has a lot of room to grow, said experts.

    Food and beverages currently account for the highest proportion of monthly consumer spending in Vietnam, accounting for about 35 percent of the total, she said.

    Opportunities

    Food processing is one of the industries Vietnam is giving priority to in its growth plans until 2025 with vision until 2035.

    Vu Van Chung, deputy head of the Foreign Investment Agency under the Ministry of Planning and Investment, said that so far, foreign investment in the food processing industry of Vietnam was $11.2 billion in 717 projects, excluding those formed through merger-acquisition deals.

    Most foreign investment has flowed into processing agricultural produce, seafood and producing beverages.

    The food processing industry in Vietnam is considered attractive thanks to tax preferential policies including an import tax exemption for technologies to upgrade the production chain in Vietnam.

    “Despite preferential policies for investors, Vietnam’s food processing industry has not been able to attract investments from markets that strong in this field, like Japan, the U.S., Australia and the EU,” Chung said.

    The biggest obstacle for the sector right now is that domestic material supply is unable to meet production chain demands.

    For example, domestic materials supply can only meet 25 percent of inputs for the dairy sector, and up to 90 percent of materials to make cooking oil is imported, he said.

    But deputy minister Hai was hopeful that things would improve when the free trade agreements that Vietnam has signed come into effect, opening a broader consumption market for investors in Vietnam in general and investors in the food processing industry in particular.

  • Rivalry heats up in Vietnam’s food delivery market

    Rivalry heats up in Vietnam’s food delivery market

    Last week, a sea of red filled the inside of a milk tea shop in Ho Chi Minh City instead of regular young customers usually found in such places. GoViet drivers were queuing up to purchase food ordered by customers over its online delivery app Go Food, which was running a 50-percent discount program along with free delivery within 5 kilometers.

    The very next morning, the shop was filled with green shirts of Grab drivers. Grab had launched a free delivery promotion for the first 999 cups of milk tea ordered.

    Gradually, the green shirt – red shirt war is becoming visible on the streets.

    Despite being new entrants in the online food delivery market, both Go Viet and Grab are using various measures to attract and capture customer habits. Everyday, these two tech companies spend big on promotions across a wide range of food and drinks.

    They are also recruiting stars from the entertainment industry to endorse their service.

    From the get go, Go Viet had announced a partnership with singer Son Tung M-TP, who broke the record of Asia’s most viewed music video in 24 hours last May, as the company’s brand ambassador.

    Similarly, Grab’s start-studded ads feature diva My Tam, goalkeeper Bui Tien Dung and striker Nguyen Quang Hai of the national football team.

    While having large financial and technological capabilities, both Grab and Go Viet face many challenges after entering the market later than competitors like Delivery Now by Foody, Vietnammm, and Lala, which are apps well known to many customers.

    Delivery Now offers a wider range of food on its menu than Grab and Go Viet, had has a dense network of partners from large restaurants to small pavement stalls, industry insiders say.

    Delivery Now is a product of Foody Corporation, a Vietnamese food service startup that was acquired by Singapore-based internet firm Sea LTD last year; Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands; and Lala is invested by Ho Chi Minh City-based Scommerce Group, an information technology and services firm.

    Many experts believe that the race for market share between Go Viet and Grab will resemble that of Grab and Uber when they first entered Vietnam.

    Both Grab and Go Viet are aspiring to become super apps, for which food delivery is an indispensable keystone. In addition to attracting users with incentives and advertising, the two companies are spending a lot of money on reward policies to incentive drivers and expand their network of partner restaurants.

    Grab Vietnam CEO Jerry Lim claimed GrabFood’s growth has been very impressive, with the number of its contractors increasing eight-fold in just a month of testing in Hanoi. GrabFood was released in the city early last month, after a period of testing.

    In Vietnam, Grab is reaching delivery speeds of under 25 minutes and aims for a further reduction to 20 minutes per order, the fastest in regional markets.

    Grab Food is available in both Hanoi and Ho Chi Minh City, while Go Food is only present in the latter.

    Go Viet, however, remains confident that it will meet the needs of customers, aiming to partner up with thousands more restaurants nationwide in casual dining, fast food or luxury dining.

    “Food delivery and e-wallets are promising market segments,” GO Viet CEO Nguyen Vu Duc said after a few months of competing against Grab.

    However, these delivery apps also have certain limitations. For some items on their menu, drivers have to pay up front when ordering for customers in non-partner restaurants.

    Not all drivers are happy to buy food this way as waiting is time consuming, they have to make advance payments and risk the customer not accepting delivery.

    Do Xuan Quang, deputy head of Vietnam Logistics Business Association, said Vietnam was the fastest growing e-commerce market in Southeast Asia, and along with the strong growth of the logistics industry at 15-20 percent, a similar movement in the delivery market was not surprising.

    In 5-10 years, the delivery market in Vietnam will be valued at around $10 billion, he said.

    U.K.-based market research firm EuroMonitor International values the food delivery market in Vietnam at around $33 million this year and at more than $38 million in 2020. It also puts the annual growth rate of the market at 11 percent.

  • BBQ, hotpot dining blooms in Vietnam

    BBQ, hotpot dining blooms in Vietnam

    Among non-Vietnamese cuisine channels, BBQ and hotpot are leading eating out options, and establishments offering these are growing bigger. From last year’s fourth quarter to this year’s third quarter, these two segments have posted the strongest growth in terms of diners’ visits – 46 percent for BBQ and 37 percent for hotpot, according to data compiled by HCMC-based market research firm Decision Lab.

    In terms of international cuisines, Japanese food and other Asian food grew the strongest in terms of diners’ visits – 49 percent and 23 percent respectively.

    The firm tracked all food and drink consumed out of home on a daily basis with an annual sample size of 15,000 completed interviews, and respondents were Vietnamese consumers aged above 15, who also reported on consumption by children (under 15 years) present when eating out.

    According to the survey, which covered the out-of-home eating and drinking market in Hanoi, Ho Chi Minh City and Da Nang, Vietnam’s three biggest cities since April 2016, the drivers of consumer choice for these cuisines may differ, but all hint at Vietnamese’s underlying expectations toward a dining destination.

    They choose BBQ places for celebration, quality of food and friendly service, and prefer hotpots because it is good for socializing, is suitable for celebrating special occasions, and provides a clean environment.

    Such customer preference has helped these service providers to register robust growth.

    For Vietnamese dining out in big cities, especially Hanoi and HCMC, Kichi-kichi, Gogihouse, SumoBBQ, ThaiExpress, Seoul Garden, KingBBQ and Hotpot Story are no strange names.

    Run by two Vietnamese operators Golden Gate Restaurant Group and Red Sun ITI Corporation, these are among most popular grill and hotpot restaurant brands in the country.

    Le Vu Minh, vice president of franchising, research and development and international relations for Redsun ITI said back in September that the company has maintained annual growth rates between 40 and 60 percent since 2015.

    The company increased its charter capital to VND150 billion ($6.6 million) from VND70 billion ($3.1 million) early this year.

    Redsun aims at setting up 400 restaurants in the next three years, half of them franchisees.

    Golden Gate’s revenues hit topped VND3.3 trillion ($142 million) last year, up 30 percent over 2016 and seven times that of 2013.

    Its pre-tax profit stayed at over VND250 billion ($10.75 million), while the company has a charter capital of VND64 billion ($2.73 million) last year.

    This year, it has targeted VND4.4 trillion ($190 billion) in revenue and VND326 billion ($13.93 million) in pre-tax profits and raising the number of outlets from 227 to 316.

    Vietnamese spend more than a third of their income on food and beverages, topping education and utilities, according to market research firm Vietnam Report.

  • Niche market of coffee lover in Korea

    Niche market of coffee lover in Korea

    South Korea’s cafe market is notoriously crowded pushing some large players to the brink and suffering from price attacks from convenience store operators. Yet niche is still a nice place to be, judging by the experiences of a small Seoul startup.

    Two young entrepreneurs have shared their vision of launching a coffee franchise called That Coffee Roasters.

    Co-CEOs Chin Kyo-hwa and Lee Chang-hoon reported that redecorating their first coffee shop to appeal more to female customers was key to their initial success.

    According to Chin, low early revenues escalated after the change.

    “It took more than three years for our coffee shop to gain popularity,” he said. “The store’s monthly sales more than doubled in the past two months on the back of word-of-mouth online and the new interior design.

    “The store is tiny and small, but we hope to launch at least three more stores in less than five years in Seoul.”

    Chin and Lee also run a roastery factory in Guro, Seoul for direct sale to clients. While the business currently serves a small client base, the pair are already planning to expand operations as the company gains more traction.

  • Taco Bell to open store in Bangkok

    Taco Bell to open store in Bangkok

    Taco Bell Thailand is scheduled to launch in Bangkok early next year. Thoresen Thai Agencies, which also holds the Thailand franchise for Taco Bell’s sister brand Pizza Hut, is planning to open the restaurant in Mercury Ville mall on the BTS Chidlom stop. The firm has already begun scouting for employees for the outlet.

    Taco Bell’s International president Liz Williams is leading the franchise on a broad expansion campaign, with progress currently being made in India, Brazil, and Spain among others where the brand has strong franchisees.

    Thoresen Thai’s CEO Chalermchai Mahagitsiri said that Taco Bell Thailand should do well in the territory as “the strong flavours meet the palate of Asian people.”

    Taco Bell’s owner Yum Brands operates around 7000 restaurants worldwide, predominantly based in the US, bringing in US$10 billion sales per year.

  • Chai Point to open 20 more outlets by FY 2019

    Chai Point to open 20 more outlets by FY 2019

    Tea, which conquers 70 percent of the non-alcoholic beverage market in India, is unofficially the national beverage of the country. Tea lovers never shy away from enjoying a hot cuppa, be it any season or any time of the day. Even the social and emotional lives of Indians are linked with tea. In an effort to brew never-ending excitement around tea, Amuleek Singh Bijral took a plunge into the tea business around eight years ago and since then there has been no looking back.

    Talking about the retail mapping of the brand, Bijral says, “We are into an Omnichannel business and have close to 106 stores. Apart from this, we also have about 2,000 plus milk-based dispensers – boxC – installed at corporate houses and our own line of packaged
    products.”

    “Going forward, we want to build a globally relevant tea platform and we are doing this with the help of our cloud-based platform – SHARK, which allows us to manage all our channels in a comprehensive fashion, connects to a common supply chain and allows us to serve customers their various demands and ensures to offer similar customer experience across all the channels,” he states.

    Initial Challenges

    According to Bijral, the initial challenges were to find the prime real estate locations as builders and landlords were not convinced about why such a concept would succeed when tea is available in every nook and corner of the city.

    “However, this notion has now changed over a period of time and the credit goes to customers who have become hygiene conscious and no longer enjoy having their tea on the roadside.”

    Marketing Strategy

    The beverage-centric brand, which gets 25-30 percent contribution towards its revenue from food, has never felt the need to do aggressive ATL spends as stores are their core brand platform.

    According to Bijral, all the brand’s spends are BTL-centric and that is the strategy Chai Point will continue to evolve and adopt.

    “Apart from this, we are very aggressive on digital awareness as our audience is digitally-savvy. We are centred around white-collared corporates and that is an area where our spends can be categorised as ATL and are likely to get more sophisticated and aggressive over time,” he explains.

    Technology Rules

    Bijral, who hails from a technology background, believes technology is an important part of the business. The tea lover has amalgamated technology with tea to provide a frictionless experience to customers.

    Explaining this further, Bijral states, “When customers enter the store, they do not want to stand in the queue, they do not want to punch in numbers to give their loyalty code, they do not want to carry loyalty cards in their wallet, but they want to be served at the earliest possible, so how will the brand solve all these problems? The answer to this problem is facial recognition.”

    “We have successfully piloted facial recognition across five stores and now we are at a stage where we are confident enough of rolling it out across other stores,”says Bijral.

    Even the loyalty program of the brand – PrioriTea – bets big on technology by combining facial recognition with Artificial Intelligence to offer enhanced experience to customers.

    Future Plans

    Singh explains, “ There is an immense opportunity in the tea business. Iced Tea which is a huge market abroad has not even opened up in India.”

    The brand is planning to open 20 more outlets in the next three to four months. As of now, all the outlets are company-owned and company-operated and going further, Chai Point will continue with the same operating model.

    “The brand is still at a relatively nascent stage and we believe that we need to have our own store to cement the system, processes and more importantly aggressively redefine and improve customer experience,” asserts Bijral.

    “Stores remain core to our brand. Delivery and boxC are faster-growing segments, which support the store format,” he adds.

    At present, stores and delivery from stores contribute 56 percent to the total revenue, 4 percent comes from packaged food business and the remaining 40 percent from BoxC business.

    “We have been operating profitable for last six years. We are aiming to be EBITDA level 100 percent profitable by this fiscal-end, covering all the expenses that we have taken towards our Omnichannel growth,” reveals Bijral.

    On a run rate basis, the brand is targeting Rs 200 crore by the end of fiscal.