In Conversation: Raghav Verma, Co-founder Chaayos
If we had a national drink, then meri favourite chai would have definitely been it. Come hail, shine or rain, tea lovers will never say no to a hot cuppa at any time of the day. But now tea is no longer restricted to one cup in the evening at home, reading a book at your bay window. There is a whole host of flavours to explore and tea rooms to seek.
Brewing the excitement further are IIT Bombay graduate Nitin Saluja and IIT Delhi graduate Raghav Verma, who together decided on a unique concept – a chai cafe in Delhi called Chaayos.
Known for serving incomparable varieties of tea, Chaayos has in the last three years become a must-visit for every tea lover in the city.
In a conversation, co-founder Chaayos, Raghav Verma discusses his cafe’s unique offerings, expansion plans and a much more.
Tell us about Chaayos and what is special about it.
Chaayos is a chai company revolutionizing the way Indians drink chai. A few years ago, when anyone wanted to have chai outside their homes, it was mostly the tea-bag, vending machines, or a road side vendor. With Chaayos coming into the picture, you can now buy over 25 varieties of freshly made tea, with over 12,000 customisation options. We give people a chance to have their “meri wali chai” and tweak it too! Chaayos makes fresh chai the moment you place your order, and uses the best quality ingredients from across the country to ensure every customer has a brilliant experience when s/he consumes her cup of chai.
How has the brand grown over the years?
Chaayos started off its first cafe in November 2012, in a kiosk based corporate park format. Today, there are 23 cafes in Delhi NCR and Mumbai, and Chaayos is one of the fastest growing Indian food and beverage brands.
Chaayos also has a rapidly growing home delivery segment, where we deliver fresh chai in disposable ketlis, which keep tea hot for an hour-and-a-half. Because of its premium offering and clientele, Chaayos has been able to tie-up with many big and world renowned brands like IRCTC, the Shah Rukh Khan-starrer Dilwale and many premium multi-national brands.
What are your signature offerings and what creative trends are you following in preparation and presentation?
Our signature offering is our desi chai which is our ghar-jaisi chai. We allow our customers to customize it with 12 add-ons such as tulsi, adrak, masala, saunf and kali mirch, and vary the milk, chai patti and sugar levels according to taste. This results in 12,000 ways to make your cup of chai.
We also have some international teas like Lemongrass and Jasmine, and some quirky experiments like Hari Mirch Chai and Aam Papad Chai.
At Chaayos, everything revolves around chai. We serve Indian snacks like Bun Maska, Samosas, Keema Pav, Poha and many more – basically food that goes well with our chai.
Our outlets have a very rustic look and feel and incorporate many chai elements like kettles, chai holder cheekas and chai jute packaging.
What are the new concepts and innovations in food service at Chaayos?
Chaayos is all about experiments with chai. We try to give a contemporary twist and a personalisation to all our offerings. For example, we took the regular bun maska and gave it a twist by adding flavoured butters like Achari Butter and Mint Jalapeno Butter; both were received very well. We took a product like masala chai and gave it a cold twist, making it Thandi Chai. We are constantly looking to reinvent ourselves when it comes to our chai and food menu.
Delivery of chai and subscription model are great examples of how we are trying to experiment with age-old conventions. This is possibly the first time that a hot beverage has been delivered, globally. Our customers tell us that they wait excitedly to see what we have in store for them next.
How do you ensure that the kitchen maintains food quality and consistency?
Standardised processes have been built for scale from day 1 of operations. Continuous process improvement to deliver better service time and standardised quality, rigorous training and certification structure, and procurement of raw materials from the best sources in India to ensure a brilliant chai each and every time are the few steps we take to ensure that the kitchen maintains food quality and consistency.
How would you describe the growth journey of your stores over the years and its course of trajectory going forward? What are your expansion plans?
We launched our first cafe in Gurgaon in DLF Cyber City, in November 2012. With the amazing response that we received there, we opened our next two cafes in quick succession. We started off from a corporate park format, but we have been able to extend this and do extremely well in malls and market locations. In 2015, we started our first cafe in Bombay and are thrilled with the love we have received there.
Along the way, we have also introduced a premium Chai Patti offering for our customers to use at home, and started delivering to cater to office and home chai drinking occasions. Our idea is that we should be present at every occasion when a customer consumes a cup of chai.
In 2016, we are looking to expand to all major metro cities like Bangalore, Pune, Hyderabad and Chennai.
What is your TG?
Though our primary customer set lies in the age group of 18-45, we see much older age groups coming to us as well. This is because for Indians chai is in our DNA and needs no introduction or training unlike other foreign beverage companies that are an acquired taste and focus on the youth.
Do you have any plans to open franchise outlets?
We are exploring the possibility, though not in the immediate future.
What is your outlet location strategy?
Chai is a product that gives us a very high degree of flexibility in selecting outlet locations. We are present in major malls like DLF Promenade and The Great India Place, prominent markets like Galleria Market, Hauz Khas Village and Bandra, and inside corporate parks and companies as well. Our delivery segment and subscription model allows us to reach out to a large set of customers who otherwise would have been difficult to reach using a traditional retail model.
Technology is ruling the roost these days. What technologically-driven steps have you taken/ planning to take to expand?
Our technology is completely developed in-house. This means that we are able to link our entire back-end supply chain with our point of sale and loyalty program. This gives us amazing opportunities to create customer delight, as we can give customers personalised recommendations and offers.
Our technical integration with our partners also allows us to better control service time (both for cafe and delivery), and one of the interesting technology developments that we have recently introduced is a subscription model that allows a customer to get her chai at a pre-fixed time every day. Our technology gives us a much higher degree of control, allowing us to track and optimise various customer delight parameters.
Any plans to introduce new products?
We are constantly innovating on our product range. We recently launched “Sambossas” which is crispy samosas in paneer and chicken flavours. We also recently launched our “Thandi Chai” which is a masala chai frappe. This unique product is made with fresh tea liquor and is served in flvaours of cinnamon, elaichi, masala and saunf. This is a one-of-its-kind product in this category. We also launched gujiya as a holi special which got an amazing response.
You will also see launches of many new products in the coming months – both on the chai front and the food pairings with chai.
How should beginners go about arranging capital to open a chain like yours? Did you approach venture capitalists/ banks for investing in your business?
Our initial capital for the first cafe came from the promoters itself. Post that, we were supported by angel investment firm Powai Lake Ventures.
My thought is that in today’s environment, starting up has become a lot more acceptable because of the success stories that the last few years have shown us. Initial capital has thus become more readily available, and people are willing to bet on good, unique ventures as they realise the potential returns that can be gained from investing in startups is a high multiple of any other investment channel. There are now many individual angel investors and groups at the angel and seed funding stage who can be approached.
What trends as per you, will rule the food service industry in 2016?
Like last year, I expect delivery to grow, as increasingly customer look for convenience.
Also, with Indians now coming back to their roots, regional Indian food with a twist should see more popularity and growth. The casual dining and quick service industry might throw up some innovations in this segment. Contemporary Indian food and beverages would be the flavour of 2016.
Note: The article first appeared on indiaretailing.com