Local bakeries and cafes do not advertise. Then how do they build the loyal clientele that they possess? Word of mouth is the primary medium through which the popularity of the brand travels. With millennials being hooked to the digital medium, spreading word through Facebook, Instagram and Twitter is also another way of attracting the youth to local bakeries and cafes.
BestMediaInfo.com spoke to a few local bakeries and cafes such as Theobroma, The Bombaykery and Sassy Teaspoon, and even to a few national players such as Barista and Mad Over Donuts (MOD), to figure out what they do to stay relevant in the market.
Cyrus Shroff, CEO, Theobroma, said, “Bakery is a fragmented market with many small players and TV advertising is unaffordable. Our advertising is done by our guests, they not only return to us again and again but recommend us to their colleagues, family and friends. Our business has grown and is still growing through word of mouth.”
Theobroma is relatively well-known in areas of Mumbai where it has a presence. However, as the brand expands outside its home city and into new markets, it does announce its arrival to a new audience via posts on Facebook and Instagram. It uses Facebook because it is able to target its posts to a specific area and demographic.
The Bombaykery, based in Gurugram, had humble beginnings and bootstrapped its way to growing its business through all available online channels such as Instagram, Facebook, Twitter, Zomato Reviews, Google Reviews.
Mitali Sahani, Co-Founder, Partner and Innovator, The Bombaykery, emphasised, “We truly believe that there is no better way to market a food / bakery business than 'word of mouth'. So, inviting prospective clients to our stores and making them taste and experience the store and product is another tool that we regularly exercise to achieve our business goals. Sending samplers to regular clients and new ones garners good marketing mileage. If the customer enjoys the goods, the recommendations that you get are incomparable.”
The Bombaykery makes full use of social media platforms and tools that enable it to reach out to its existing customers and acquire new ones. Out of them, Instagram is the more favourable one for the brand. If used well, it’s extremely quick, timely and highly engaging.
For Sassy Teaspoon, which has its outlets in Mumbai and Pune, most of its marketing activities are directly targeted to its customer base through a more personal approach.
“We focus our marketing effort on BTL activities like emailers, point of purchase display collaterals, special offers and more. With a major part of our target audience being digitally savvy, we allocate most of our marketing budgets towards social media, primarily on Facebook and Instagram, as it helps reach a vast yet relevant customer base,” said Rachel Goenka, Founder & CEO, The Chocolate Spoon Company. The Chocolate Spoon Company is the parent company for Sassy Teaspoon (Mumbai and Pune).
For Sassy Teaspoon, too, social media advertising is the most preferred way of reaching out to its target audience. The medium is very versatile and enables them to showcase innovative content within a limited time frame, thus not only capturing eyeballs but also keeping the messaging quick and relevant. They have been able to successfully reach a vast customer base through in-stream ads on Facebook, Instagram ads, lead generation advertising and boosted social media posts. Their idea is to put out content that also creates conversations for the brand, leading to more visibility and awareness.
Talking about competition
Among the bigger players, there are ones such as Barista, Cafe Coffee Day (CCD), Mad Over Donuts, etc., that have similar offerings as those provided by local bakeries and cafes. So how do players like Theobroma, The Bombaykery and Sassy Teaspoon compete with them, and vice-versa?
Shroff clears, “We do nothing to deal with the other players in the market. We make simple products with good ingredients and we do it well; our business is as simple and as difficult as that.”
At the national level, The Bombaykery considers its primary competitor to be Theobroma. “Although, competition can be viewed at different stages and locations given the diverse range of products we deal in. However, locally, L'Opera, Angels in My Kitchen, Binge, Bisque, Whipped all compete at some levels. Brands like Mad Over Donuts do offer sweet goods but only focus only donuts,” said Sahani.
“Competition is always good at all times, 'it keeps you on your toes'. The market is growing tremendously and there is a space for everyone, only that we need to remain consistent but also keep innovating with our products,” she added.
Today, every brand is doing its best to stand out and be differentiated from other players, whether local or national. “We don’t view Mad Over Donuts, Barista, Cafe Coffee Day and such brands as competition since our product range is completely different. It’s more niche and the price points are very different, too. Our strategy is more personal and less mass,” pointed out Goenka.
The innovation Barista brings on to the food and beverage segment cannot be matched by local outlets. “Local outlets are mostly catering to the cost conscious segment and are more bakeries based. Constant product innovation, efficient production and inventory management is a major challenge for a neighbourhood café,” said Puneet Gulati, CEO, Barista.
Barista has aced merchandising products such as varieties of handmade cookies, exquisite chocolates, ginger honey, etc. These are state-of-the-art products that can only be enjoyed at Barista. Local cafés in return offer third-party merchandise that is not unique, the brand said. Barista offers 100% Arabica mid-roast that definitely is a unique proposition, and its blending process also is a differentiator.
Tarak Bhattacharya, COO, Mad Over Donuts, said, “What is happening is that with changing lifestyle, people have started wanting quality and hygiene. That’s why the influx of bakeries and cafes has become large in the last few years.”
“For us, the focus is very clear, what you do is your product. The product is the hero. We change our flavours also every few times. The influx of new flavours is important for our brand. Currently we have a Mango Festival, you’ll see it on the shelf of MOD. We showcase product very well. After the Mango Festival, we’ll do a Caramel Festival. Before mango, we had done a KitKat Festival. The strategy is to infuse more and more product delivery into the customer change, taste etc.,” he added.
“Cafes like Barista and CCD are 60% beverage and 40% food. Ours is 80% food (donuts) and 20% beverages,” he specified.
Differentiation and product experience
Shroff of Theobroma claims, “We make good products. We use real ingredients (real chocolate, never chocolate compound). We have a generous hand; we don't dust and sprinkle, we use generous handfuls.”
At The Bombaykery, they try and differentiate themselves not only in the goodies that they bake but also their look and feel. “The Bombaykery is a bold and fun brand, that’s not expected out of a bakery typically,” shared Sahani.
Sassy Teaspoon is a brand that has emerged from being one outlet to nearly 10 outlets in the last one year. Goenka said, “All our outlets are self-funded and quality control is very important to us. From a shop format to kiosks at malls and a soon-to-be-launched cafe, the brand is experimenting with various formats. We believe in constant innovation and our products reflect that ideology.”
“Innovation is the cornerstone at Barista, inventing new drinks and food items according to the customer’s choice has allowed us to create our niche with local and national players. Thus, our customers are always served with new a menu in every season. For example in summer of 2019, we experimented with Rose Gulkand, which in our research stood out as healthy, earthly yet living up to quench thirst,” said Gulati.
Brand Barista has been built on innovation. For example, fusion food like Seekh Kebab, Chicken Seekh Roll are coupled with their classics like Brrrista Frappe, Brrrista Blast, Cappuccino and give them an edge over local and national players.
Bhattacharya mentioned, “One, MOD is known for its indulgent flavours. So wherever we are available, people go for it. If we are not available, then obviously it’s convenience that comes into play. We are more of an indulgent category, where people see us and consume. So about them coming again and again, it depends on the consistency of the product and giving them new flavours all the time.”
“But sometimes it gets difficult as we’re not available everywhere where people want to have us. Then people explore what more options are available,” he added. MOD outlets are only 70 in number across four cities — Mumbai, Delhi, Bengaluru and Pune, right now. The brand will enter Chennai soon.
Secondly, for MOD, it is about consumer engagement, for which they have Donut Days, where they sell donuts at half the price. They also have days when they give donuts free to a few first customers. To have a connect with the kids, they have a balloon on the food court. They also have a range of kids’ donuts, one with sprinkles, and another with Gems. “With every range and category of people, we keep them engaged,” said Bhattacharya.
Dine-in or delivery?
Theobroma has a healthy mix of eat in, take away and deliveries. “Take away is the largest share of the pie and we are very fortunate to be able to fulfil the varying needs of our guests,” expressed Shroff.
For The Bombaykery, it’s a mix of both, and completely depends on the location. “We would look at it as a 50:50 mix between dine-in and take-away, across our outlets. Given that two of our outlets don't really have proper seating but garner great daily revenues,” said Sahani.
The volume of deliveries at Sassy Teaspoon is quite high since most people prefer to order in. “The convenience of ordering online from platforms like Scootsy, Swiggy and Zomato along with the various special discounts these aggregators offer further makes delivery more preferable. Most of our customers come in for takeaway, there are however a few who also prefer picking up a dessert and enjoying it while they’re at the outlet,” said Goenka.
Size of the bakery and cafe market
As per the IMARC Report of 2018, the bakery market is around $7.2 billion in India, and the cafe market is about $725 million in India. There are overlapping instances in the figures as some bakeries have evolved into cafes, and most cafes do provide bakery products.
Evolution of bakery and cafe business in India
India is essentially a tea drinking nation and the unorganised sector has always been existent ever since partition. The market started to shape up with neighbourhood stores and only around the end of last century or the beginning of this century, when the foray of coffee culture started in India. Earlier, there would only be a handful of coffee stores outside five-star hotels. Coffee was essentially a product that was available at premium places that are more synonymous with hotels and other premium joints. In the year 2000, Barista set its footprint in India. It was the pioneer of coffee culture in India and that broke the ice of having the industry to set its theme.
“The last 19 years have actually been the first stage of the evolution for the coffee market in India, which has an old habit of drinking tea. To validate it, if you were to look at the coffee consumption in India today it is between 85-110 grams per capita, which is nowhere close to what is happening in other Asian markets, Australia and Europe where the consumption pattern is almost 7-10 kilograms,” said Gulati of Barista.
In the last few years, the bakery and cafe market has evolved very well. In the last 20 years, we have seen cafes doing very well. “In the last 7-8 years, there has been a categorisation of the bakery business from bread to various offerings like us, as a donut player, or a waffle player, or specific brands like Theobroma, etc.,” said Bhattacharya of MOD.
Unlike a regular café earlier, bakery essentially provides baked food. Beverage offerings are limited. Although they have evolved along with decent beverage offerings.
Over the years, this segment has matured with the addition of varieties of cold beverages, tea coffee vending machines, seating arrangements, etc., but few have managed to turn into full-fledged cafes. In cafes, the environment is more aesthetically sound and savouries are of higher standards and the same goes for the beverages. The brands bring a standardised experience across various outlets, the innovation keeps on happening and theme-based activities are followed, which are missing components at a bakery.
Over the last two decades, the bakery and cafe business has really taken shape and is here to stay. Bhattacharya said, “Change in palette, change in taste will always happen, looking at the market today. Experimenting with food is very high at this point of time.”
“There will always be the local bakeries in the neighbourhood, but international players will change the game and take it to the next level altogether,” he said.