We offer every consumer 'meri waali chai': Chaayos CEO Nitin Saluja

Nitin Saluja, Founder & CEO, Chaayos
Unlike coffee where standardisation to some extent is possible, tea preferences vary greatly across regions, Nitin Saluja tells

How did you identify the business opportunity in chai cafés?

We are a tea drinking nation. A tea café chain was possibly something that was waiting to happen. Imagine, in terms of business opportunity on the consumption side, we are looking at about 30 cups of tea and one cup of coffee. Today, all the coffee brands put together account for 2,000 cafés. In the evolution of coffee cafés, Starbucks has been able to achieve what it has in the West because they are coffee drinking nations. Back in India the question that we asked ourselves was, what is it that the bulk of India is looking for? In the West people wake up and head for their favourite brewery. In India, most of us reach out for a cup of tea. Talk of tea and we realise that Indian kitchens end up with the same brand of tea year after year on their shelves. Unlike coffee where standardisation to some extent is possible, tea preferences vary greatly across north, south, east and west. In fact, within families, every member has a variant of “waali chai” (my cup of tea).

Since the tea palate of Indian varies vastly, from day one we decided that however arduous a task it may be but we will offer our customers “waali chai”.

Given the varying palate of Indians how have you developed standardised products for consumers with individual choices?

Our starting point was to figure out what kind of tea the country drinks. And the answer to that is, there is no one tea that India drinks. Tea made in my house would be different than that in yours. Within families people make and consume different types of tea. There is no one type of chai. Thus, we decided that we are not going to give you Chaayos tea, rather we will give each consumer “waali chai”. This way ordering becomes easy. The objective is to perfect the ability of making the same cup of tea (according to individual preferences) over and over again. The idea is to ensure that every customer looks at Chaayos with a high degree of reliability of getting her own variant of a cup of tea every time she visits Chaayos. The moment we do this, it is game won for us.

Having started in late 2012, Chaayos now has an extensive food menu as well. This has seen your average ticket size go up. So, what are the innovations driving your food experiments?

Our average ticket size with tea and food included is Rs 250. It is natural behaviour for people to ask for something to eat with tea. We have been tapping into this need. Over the last five years, our food menu has become more conducive for all day consumption. Now we have food offerings that consumers can pick from morning to night to go with tea. This roundness of the food menu has come about as a result of constant innovation. For example, we wanted to come up with a paratha offering for a good two years. Initially, we came up with a stuffed paratha but soon realised that we could not keep it crisp and super savoury. After working on it for two years, we ditched it. Next, we got a Malabar paratha saying we will not put anything inside the paratha but put the stuffing on top of it. People lapped it up calling it a desi pizza with the stuffing on top.

With changing consumption behaviour and preferences, consumers today are open to experimenting and trying new things. And this works in our favour. Our Malabar paratha goes well with lunch and dinner. We also have mutton cutlet and bun samosa. The entire spread of the menu is centred on chai. We run our own kitchen spread across 2,000 square feet with 35 people. The food is directly delivered to our cafés from this centralised kitchen.

You are also big on delivering chai, isn’t it?

Our delivery ticket size is nearly 1.5 times more than in-house café consumption. This is because people order for larger groups. Our delivery transaction values are somewhere near Rs 275. We have had to carry out small innovations in-house before we got into delivery. We began by designing a special kettle for delivering hot piping tea within 90 minutes of an order being placed. We have made a kettle sporting seven layers of food-grade plastic sheets that help keep tea hot. The exterior of the kettle is supported by a three-layer stylish carton with multiple layers of air keeping the tea hot.

Again apart from product innovation, we have trained our team to deliver these cartons to consumers in the shortest possible time. For this we have mapped the entire areas around our cafés. We have to make sure that it’s convenient for consumers to have tea at home, assure them of the hygiene factor through small yet interesting in-house innovations.

What’s been the hardest part of running Chaayos?

Tea is a very under-researched topic. No player or companies have put their energies behind the business. There is no existing business model to follow. For example, the coffee industry has advanced equipments, a lot of players have put their money behind the coffee business. The tea business lacks advanced equipments or other technology know-how. So one has to learn on the go, build things afresh. In the tea business, one does not have the opportunity to learn from established models.

What are your future plans?

We have been growing at more than 250 per cent year-on-year for the past five years. I believe we will continue to grow the fastest in the food service business. By March, we are trying to get to 70 cafés in Delhi-NCR, Mumbai and Chandigarh.

We are working on building a tea bot that will make sure that your every cup of tea is exactly the same. It will help give you a faster cup of tea.

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