In Conversation with Puneet Gulati
Several coffee shops/brands in India, including Barista, have been consolidating by shutting stores that aren't giving solid returns. How does consolidation work as a marketing strategy?
Rationalisation is a better way to categorise store closure. We have only relocated stores which cannot be turned around because of their demography. Rationalisation is a good strategy for overall economics as it reduces focus on bad assets and helps focus with optimum commitment on good/average assets.Rationalisation is a better way to categorise store closure.
How does Barista plan to invest further, in the next two-three years? What will be the focus of strategies in terms of growing the brand?
Brand growth driver has many elements, we are right sizing formats, exploring newer brand format options which are low on investment and have higher ROI specially targeted for corporate/mall kiosks location. Further, we have been able to pace up franchisee expansion which is helping us grow at a faster pace pan India and taking the brand to new towns which have spending power and are under penetrated. We wish to grow on same lines going forward for next 2-3 years, all this will help us achieve internal targets which have been set for growth.
Given that Barista has tie-ups with select aviation sector brands, how does that help as a strategy to fuel growth and revenue?
I am not sure whether we have any partnership with aviation brands, however, would be open to be partners in their growth and encash on captive audience on flights by selling Barista branded products.
As someone in a leadership role, how should future leaders be groomed according to you? Can you tell us how employees are guided in their role as team players and as future leaders?
We are focussed on creating an inclusive organisation where all employees feel engaged and are focussed on contribution and advancement in their careers. We aim to attract and retain talent and groom them to take leadership positions. We seek employees who help us to stay ahead of the industry. We aim to combine the individual’s ambitions, strengths and aspirations, and together we tailor a suitable profile to have a future leader in him/her.
What are some of the boxes required to be ticked by brands that want to go through the franchisee route for their growth? In Barista's context, could you tell us how this is done?
Brand commitment, Economically Viable Model, Brand support are three pillars to franchisee, we have been able to right size all these and the same have yielded results in India and Internationally. We are happy to announce that we have recently launched in Maldives through our franchise partners (last week March).Brand commitment, Economically Viable Model, Brand support are three pillars to franchisee, we have been able to right size all these.
Could you share some of the strategies to save costs at Barista? Eg; one notes that Barista doesn't take very large areas for stores. Could you give us other instances of how effectively Barista has saved costs without compromising on the quality for consumers?
Cost efficiencies are ladder to growth, since we took over the business from Lavazza we have been very proactive on cost control measures. Some of the key initiates have been implementing optimum manpower strategies for café basis their size, rental negotiations on sites where we were high on rentals, rationalisation of corporate level costs, COGS control with a strict focus on damages, Utilities being tracked by size and working hours. These all close knitted have helped us to save huge amounts on our fixed costs.