A mail sent to Jubilant FoodWorks elicited no response till the time of going to press. The company said it was in the mandatory silent period before its financial results.
But, in an analysts’ call recently, Pratik Pota, chief executive officer of Jubilant FoodWorks, said the “cafe plus bakery products” proposition was vibrant. “The fundamental space of cafe plus bakery products is growing and we believe there is room for Dunkin’,” he said. “The next couple of quarters would be about making sure that some of the innovations in driving consumer trials would work successfully,” Pota said, adding that the company was working on a number of initiatives in delivery as well as dining (stores).
Dunkin’s move to become a cafe would pit it directly with rivals such as Starbucks, Cafe Coffee Day, and McCafe (from McDonald’s), who are strong players in India. The domestic coffee chain market, according to experts, is Rs 20 billion in size, growing at the rate of 11-12 per cent per annum. Starbucks has 128 stores in India, McCafe has 156 outlets, and Cafe Coffee Day has 1,742 stores.
Arvind Singhal, chairman of Technopak, said growth in the coffee chain market in India had been fueled in part by disposable incomes as well as the need for a place to hang out, conduct meetings or just have fun. “While there have been examples of brands that have not worked (such as Barista), the space in recent years has seen the entry of global giants (such as Starbucks and McCafe) that have attempted to transform the market with menu innovations as well as attracting millennials via digital initiatives as well as favourable location of stores,” he said.
Last month, Coca-Cola globally announced it was acquiring Costa Coffee for $5.1 billion, becoming the latest entrant in a competitive market. The beverage major is likely to rejuvenate the brand in India as it looks to consolidate its presence in the country.
Analysts said Jubilant FoodWorks was eyeing breakeven for Dunkin' by the end of the FY18-19 and that it would look at profitably scaling up the model once break-even was achieved.