Tier 2 Markets Have Been Quite Robust For Us: Rajat Agrawal, CEO, Barista

In 2018, Barista launched a new format of business Barista Diner with the first outlet in Delhi-NCR. Since then, this Coffee Chain has opened five more outlets under the Diner format and has the plan to grow it rapidly in the coming years. The diner is the flagship format of the house of Barista and we would want to be very selective in our location strategies. In an interview with BW Businessworld, Rajat Agrawal, CEO, of Barista, talks about the expansion, challenges, experience of running a full-service diner and more.

The last two years were challenging for the hospitality industry; how did you cope-up with the situation? 

We have been able to capitalize well during the pandemic period with robust growth of almost 95 outlets during the 2 years of the pandemic period. Further, we capitalized well on the market opportunities especially affordable real estate. Backend infrastructure was always a strong point for us which also helped us to manage our business well during the pandemic period. We were able to negotiate our leases, and vendor contacts and worked out newer models of growth like Delivery/Digital ordering/ Newer formats of business like Express formats to further penetrate at a rapid pace along with FMCG business. A strong consolidated supply chain ecosystem around food also helped us to create a consistent consumer experience which was location agnostic.  

How many new stores have you launched post-pandemic? 

During the pandemic years from Mar-20- April 22 we opened 95 stores, post-April 22 we have been opening 4-5 stores/per month.

How difficult is getting a restaurant license focused on dining in different cities? 

Each city has its own licensing norm, our liasoning team has been strong enough to get us the licenses on time without much hassle. For us, it has not been difficult to procure licenses as we are 100 per cent compliant with various rules and regulations prescribed by the local authorities.

In 2018, Barista launched a new full-service diner. What was the idea behind it? How are these diner restaurants doing in terms of profit? 

The diner is a casual dining concept from the house of a barista and serves continental-style food ranging from Salads, Burgers, Pizzas, pasta and a few fusion foods, food offering has also been customised keeping in mind the place of operation. The format has done well for us in past and generates a healthy ROI (return-on-investment), we are focused to grow this model in future and you would see more Diners soon.

If we talk about the revenue numbers - How much weightage are these diners providing to it?

The diner is still a very nascent phenomenon and we as of now operate only 5-6 units under the Diner format compared to the overall spread of the brand which is 330 plus. Guest feedback has been encouraging for us till date in all the locations we operate.

The market is overpopulated with coffee chains. So how is Barista standing strong amid tough competition? 

The café industry is growing at large with an increase in consumption; there is a huge space still to grow, which is why the space is warming up with newer players entering the market, including International.  Over the past few years, Barista has been able to work on teams and infrastructure to drive high-octane growth, understand consumer/market sentiments well, and identify its zone well. All of this put together, Barista is confident of its success. Recently, Barista was awarded by Business Growth of the Year 2022 award in a recently conducted Restaurant India award show.

Did you notice any change in the eating habits of people post-covid? What is your weekly footfall? 

Delivery/Takeaway business has become a big post covid. Further, consumers today are willing to pay extra for branded products which guarantee them hygiene and safety. There was a big shift towards hot beverages during the covid period which is now settled and our beverage mix is back to pre-covid levels. Post covid the business has become more buoyant, eating out ratios have seen a big improvement and have helped us to post healthy growth compare to pre-covid levels. Tier 2 markets have also been quite robust for us and we have seen a large part of our growth in the last 2 years coming from these towns specially Punjab/HP. We cater to about 2-2.5 lacs guests per week.

What are the food trends to look forward to in future? 

Vegan/Gluten-free offerings along with the health segment are becoming big. Speciality coffee as a segment is also warming up well with Cold Brews/Single-origin coffees. In-home consumption of coffee as a product is on a high and people are preferring artisan/manual brews at home much more than the pre-covid levels.