Their strategic expansion into offline retail not only revived local economies but also introduced affordable gourmet products to communities craving quality and flavor. With a meticulous approach to product curation and a commitment to customer satisfaction, Bombay Gourmet Market continues to redefine the gourmet retail experience, one neighborhood at a time.

Not many brands in India have charted a course for major franchise success with affordable gourmet retailing as their compass. But Akshay Kumar and Kurush Dadabhoy, Co-founders, Bombay Gourmet Market, a chain of 18 neighborhood gourmet stores located across 6 cities in west and south India — Mumbai, Pune, Goa, Hyderabad, Rajkot and Vadodara — can be called the poster boys for creating a successful model in the business of grocery franchising and gourmet retailing.  

Before Covid struck in 2020, both Akshay and Kurush were surfing the commercial waves in their respective businesses: Akshay had put down roots as a successful restaurateur in Mumbai, operating Bombay Sultaani Biryani House in Borivali and had spent close to 5-6 years in the industry. Kurush, on the other hand, ran a well-oiled enterprise selling and trading in imported electrical switchgear.

Just as their businesses seemed to be smoothly coasting along, the Covid pandemic came baring its fangs and dealt a sucker punch. Akshay’s restaurant gig grinded to a screeching halt and Kurush saw his enterprise skid off the rails.

Rising above restaurant shutdown by pivoting to online grocery

Tossing a lifeline to someone who falls overboard can throw up surprising, often magical results. As Akshay was moping and brooding about his next course of action, he received a phone call from his Zomato and Swiggy contacts at the restaurant. “They informed me that their platforms were expanding into grocery deliveries and suggested that I list my kitchen’s products. At that time, they were operating on a marketplace model and eagerly encouraged me to showcase items like fresh sauces and ready-to-cook meats. Always open to new opportunities, I agreed to give it a try. The results surpassed my expectations many times over, which prompted me to fully embrace online sales through this channel.”

That’s how Bombay Gourmet Market got off the starting blocks in 2020, within the first few days of the imposition of complete lockdown — as on online food and grocery platform. Akshay re-jigged his restaurant space in double quick time, listed and uploaded the details of products lying in the restaurant’s kitchen with Swiggy and Zomato.

“It was my restaurant where I started, because restaurants were shut during Covid, and I just thought of putting the space to some use. I had an asset, which had to be monetized because the lockdown had made revenue zero for the business I was operating in. So, I had to monetize and do something, which was much needed in those times,” recounts Akshay.

He shares that he had about 15 minutes to think of a brand name for his online grocery business and about another ten minutes to upload items that were there in his existing restaurant kitchen. “And as I started uploading the details of products, orders started flowing in. And, you know, that actually kept us quite sane during the lockdown, if I may use that word.”  

But while the pandemic exacerbated the crisis of sustaining business operations across all industries, it also brought in a perfectly teed up opportunity for online food and grocery retailers. For many affected and pandemic-hit business owners, venturing into food and grocery became the ideal test bed for experimentation and a way to keep their business mast flying.

“During the lockdown, offline sectors across various industries, including retail, faced significant challenges. While supermarkets were able to muddle through thanks to the government notifying it as an essential service, restaurants, clothing stores, salons, and many other retail sectors shut down. This had a widespread adverse impact on the retail industry, with offline operations bearing the sting and hardest hit. However, online food and grocery experienced unprecedented gains and traction during this period,” says Akshay.

Large swathes of customers in cities and towns across India, who preferred in-store visits for their grocery shopping turned overnight into the most devoted proselytizers of online shopping. That Bombay Gourmet Market began grabbing eyeballs and instant orders from the moment it listed is proof of the voracious force  9 gale demand from customers clamoring to place orders and get their online orders fulfilled.

For the newly minted Bombay Gourmet Market, not only did its online orders keep swelling up, it also launched 4 other online stores within the next couple of months to cater to different catchments within Mumbai. “The orders just kept adding up without ebbing for once. Honestly, there was no looking back and we just kept refreshing and shuffling our inventory as we moved from one store to five stores online within months. I had never thought that it would magnify into something as large,” says Akshay.

From online success to offline retail

However, by the middle of 2021, the pandemic was receding further in the rear view mirror. After, what seemed like a long-drawn slumber, shops, markets, cinemas and salons roared back into business with a frenzy. Shoppers, tired of being cooped up during the lockdown, sent the markets into overdrive with their vengeance spending. At the same time, the tear-away growth that online grocery had seen of late seemed to have finally found its ceiling.

Bombay Gourmet Market with its five online stores too saw orders dip into a deep trough. The slowdown was further aggravated by the fact that both Swiggy and Zomato, which had earlier acted as the catalytic fuel for the retailer, had now developed their own grocery delivery infrastructures — Swiggy with Instamart and Zomato through the acquisition of Blinkit. “Our order volumes and visibility decreased as a result, which prompted us to venture into offline operations in 2021 in a bid to diversify and stabilize our business,” confides Akshay.

With Swiggy Instamart and Zomato’s Blinkit focused sharply on growing and expanding their own grocery delivery business, it was Akshay’s restaurant business, now resurrected back to life, which offered the quantum of financial solace. But having tasted success in his entrepreneurial gig as an online neighborhood gourmet retailer, Akshay was intent on creating a successful playbook for launching Bombay Gourmet Market as an offline gourmet retail brand.

But as the saying goes: If wishes were horses, beggars would ride. Launching an offline store in a city where real estate value is stratospheric is easier said than done.  Starting down the road of offline grocery retailing in a city like Mumbai is like entering the meat grinder of entrepreneurship. If you come in here with naïve ideals, you’re going to get chewed up and spat out.

Fortunately, Bombay Gourmet Market’s run and stint as an online gourmet player had racked up enough commercial bounty as well as brand recognition for Akshay to launch a 375 sq.ft. store in Mumbai’s Borivali.

As people in the locality were already familiar with the brand with many of them being Akshay’s restaurant and/or his online gourmet store’s customers, the maiden launch of Bombay Gourmet Market’s first offline store received a positive public response. The store, which is now run as a franchise business, enjoys a fervent following in the community, and has emerged as a trusted destination for food aficionados looking for higher-quality ingredients and products with an elevated flavor profile.

Success breeds more success, and the success of a business demonstrates a fitness for future tokens of success and recognition. Within three to four months of inaugurating its initial store, Bombay Gourmet Market launched its second outlet that same year in 2021. “And then I thought that this is the way forward and we will launch the next store in another three to four months,” says Akshay.

The confidence sprang from a deep-seated belief that he would be able to spin the magic wheels in his newly launched offline gourmet retailing business. But spreading the brand’s wings in Mumbai demanded bucketloads if not an avalanche of capital. It was a difficult needle to thread and required hard thinking and working on a separate track. Akshay had to find a path to navigate through the thickets of challenges ahead without breaking the conventional business guardrails.

Money lies at the heart of any business. And, for startups, it means making trips to the funding well. But Akshay did not wish to jump on that treadmill. It was at this point in time that he began seriously thinking about the franchise model as a more enduring channel for growing the supermarket business. As someone originally hailing from the restaurant industry, Akshay knew many potential investors who were keen on taking up a restaurant franchise.

“During meetings and over meals at my restaurant, many investors used to ask why I don’t franchise my restaurant. My response was that restaurant franchising isn’t simple because it heavily relies on manpower. In the restaurant industry, success hinges on both food quality and service. Personally, I lacked the motivation to franchise the restaurant business.”

Continuing on the same riff, Akshay elaborates: “However, in the aftermath of the pandemic, many people grasped this plane of reality that supermarkets are a safer business to be in. “Many of the franchisees Kurush and I engaged with had originally planned to open independent restaurants. However, our conversations revealed that they had been misled by the food franchise companies they had consulted. We brought some of them around to partner with us and become our supermarket franchisees.”

The Akshay-Kurush partnership

Having made the decision to expand the store network through the franchise route, Akshay and his business partner Kurush, prepared to get down to the brass tacks of the business and kick the enterprise up another gear. Their plans to rope in franchisees for the supermarket business had already found quite a few takers.

Akshay and Kurush first met in early 2021 only to discover that their vocation and avocation were happily one. While Akshay was already directly involved in the food business, running a restaurant and his newly founded supermarket business, Kurush too came with retailing antecedents, although in a different product line. But like Akshay, he too harbored a deep love and interest in the food business, which brought him to meet up with Akshay when he came looking to take up a franchise of Bombay Gourmet Market. The two met and immediately bonded, with Akshay making the offer to Kurush to become a master franchise instead.

“When I first got introduced to Bombay Gourmet Market, my initial intention was to open my own store as a franchisee. However, given my background as a trader, Akshay realized I could provide more value as a master franchisee. I took on the role, in which capacity I focused on managing taxation, accounting, inventory, software maintenance, and creating an operational framework, including generating various reports for our business operations. These are areas where I believed my expertise complemented Akshay’s vision.”

Before long, the intensity and gravity of purpose vibrating off of each other brought them closer still. Realizing that they both shared the same enthusiasm for the business, Akshay asked Kurush to come on board as a co-founder. “We shared a psychological alchemy and instantly knew that both us shared an all consuming passion to grow our gourmet retailing supermarket business,” recounts Akshay.      

“Akshay’s vision and contributions are unlike anything I experienced in my previous industry. The platform he provided me with is now something we offer to our franchisees. This initial support from Akshay is what I value most, and that’s how our partnership began. Since then, we have built a strong business relationship and friendship. It has been truly remarkable collaborating with someone like him,” exudes Kurush.

In fact, the two of them are like Siamese twins because if you separate them, you lose some vital parts of each. Both reinforce each other in a virtuous circle as is evident by how they go about performing their roles and responsibilities. Together, they bring a fresh, ferocious energy to the business and, between them, they get the job done fast like a ninja.

Both Akshay and Kurush have divvied up their roles and responsibilities in the business with almost Euclidean precision. Kurush manages the back-end operations, focusing on maintaining the supply chain and overseeing the terms of trade with brands, particularly regarding the addition and removal of products. He and his team are responsible for ensuring smooth operations in these areas. Their role is critical in maintaining efficient inventory management and fostering productive relationships with suppliers and brand partners.

Akshay oversees the front-end operations of the business, focusing on marketing, operational strategies, and store management. Additionally, both Akshay and Kurush are actively engaged in managing the product assortment. This is crucial for shaping the identity of Bombay Gourmet Market, which is positioned as an experiential gourmet retail store.

Redefining neighborhood gourmet retail

Since launching its first physical store in 2021, Bombay Gourmet Market has successfully established itself as a thriving grocery franchising business. The brand has strategically expanded to 18 stores currently, each contributing significantly to its sustainable growth. The store sizes range from 300 sq.ft. for the smallest to 1800 sq.ft. for the largest, with the median size being approximately 500-600 sq.ft.

Currently, Bombay Gourmet Market has 5 stores operating in Mumbai with the rest located in cities such as Pune, Goa, Hyderabad, Rajkot and Vadodara. The stores cater to a diverse audience spanning from Gen Z to Baby Boomers, offering a wide array of products that appeal to varying tastes and preferences. This includes trendy items like ramen noodles as well as organic staples, grocery essentials, snacks such as healthy namkeens, and specialty items like cold-pressed oils.

Though Bombay Gourmet Market operates 5 stores in Mumbai, the brand has strategically shifted focus to Tier II and Tier III cities. “Mumbai’s high costs make offline retail challenging, with rentals under better control in non-metro areas. Despite this, demand matches that of Mumbai, and cities like Rajkot, Goa, Pune, and Hyderabad offer higher returns on investment. While Mumbai boasts higher disposable incomes, we have observed substantial wealth generation in Tier II cities, which is catalyzing strong demand for gourmet products,” notes Akshay.

He adds that there exists a deep well of untapped demand for gourmet products in non-metro cities. This trend will become more sharply defined because the rising demand for gourmet products in Tier II and Tier III cities isn’t being fully met. “When we introduce our stores in these areas, we consistently witness a positive reaction from the local community. Residents express appreciation, eagerly welcoming the availability of gourmet offerings in their neighborhoods. This response underscores the value and satisfaction our presence brings to these underserved markets.”  

By way of an example, he cites the success of Le 15, a brand known for packaged cookies and owned by pastry chef and businesswoman Pooja Dhingra, at his Rajkot store. “Surprisingly, our Rajkot store stands out as one of the top sellers for these cookies, which shows the untapped market potential in these cities. This success highlights the importance of exploring new markets, as opportunities for growth and tapping consumer interest can often exceed our initial expectations.”

But aren’t gourmet stores perceived to be pricey and a shoo-away for the value seeking Indian consumer? “Due to the pandemic-induced lockdown, there has been a notable rise in home chefs experimenting with gourmet ingredients like mascarpone cheese for dishes such as tiramisu. Before the pandemic, these ingredients might have been unfamiliar to many, but today, there is significant demand in cities like Hyderabad, Goa, and Rajkot. The surge in social media usage has also played a crucial role in spreading awareness about such products and their versatile applications. Also, our approach focuses on offering affordable products that are tried and tested, rather than expensive options. This ensures that our offerings cater to the preferences of our customers, providing them with value for their money,” counters Akshay.

In Bombay Gourmet Market’s retail strategy, products priced over Rs. 1,000 are not part of the inventory, which highlights the retailer’s commitment to affordability and value for money. Even when including imported items, they ensure that pricing remains accessible. For instance, they avoid stocking cheeses priced at, say Rs. 4,000 per block because they know that such items would not find traction even in urban centers like Mumbai, let alone Tier II cities.

Instead, their approach to product assortment is both intuitive and calibrated, and aimed at creating an ambiance that is inviting and superlative. The emphasis is on offering essential items alongside experiential products, and to ensure that customers can easily find what they need while also discovering new and unique offerings. This strategy resonates particularly well in Tier II and Tier III cities, where there is significant demand for a wide range of products.

From essentials to exotics

The market positioning of Bombay Gourmet Market as a neighborhood gourmet retailing store reflects a deliberate strategy to cater to discerning consumers seeking high-quality, curated food products in their local community. This strategic focus and positioning not only differentiates Bombay Gourmet Market in the marketplace from traditional supermarkets or specialty stores but also strengthens its connection with the community it serves.

To their credit, both Akshay and Kurush have crafted an experience where quality and variety meets. “We bring the best curation of products for those who have a finer taste in life. The range covers imported as well as premium, top-notch home-grown products in India. We have ensured that each customer gets what they’re looking for, be it daily essentials or exotic,” avers Akshay.

From the freshest fruits and vegetables to artisanal cheeses and gourmet chocolates, every product is chosen to tickle the taste buds and stimulate the gustatory receptors. A highlight of the Bombay Gourmet Market is its own line of gourmet creations — fresh, preservative-free, and crafted in small batches. Whether its pasta & pizza sauces infused with flavors like mint & Greek or tantalizing dips & chutneys, each offering promises a taste sensation. Seasonal delights like chocolate-coated strawberries add a touch of indulgence to every month.

For those with dietary preferences, Bombay Gourmet Market offers a diverse range of vegan options. From oat milk and yoghurt to vegan cheeses and gluten-free treats, there’s something to delight every conscious food lover. The brand’s commitment to freshness extends to Namkeen snacks made in small batches with less oil, appealing to a wider audience seeking healthier choices. Apart from this, they stock the best of daily essentials like milk, butter, cheese, and freshest of breads.

Nostalgia finds a place too, with beloved classics like Phantom cigarettes and Parle poppins alongside modern favorites such as Korean instant noodles and frozen ready-to-eat meals. Sugar-free chocolates and premium exotic tonic waters cater to those with refined tastes, while the selection of single-origin Indian spices and herbs adds depth and richness to every culinary creation.

As Akshay proudly affirms, “From chocolates to cheese, from grocery to gourmet, our shelves are stocked with the best from European, Asian, and American Pantries. Whether you’re seeking the perfect ingredient for a special recipe or simply exploring new flavors, Bombay Gourmet Market promises an unparalleled shopping experience.”

Strategic product assortment and innovative merchandising

Bombay Gourmet Market stores are meticulously organized into categories like Beverages, Gourmet World Foods, Healthy Munchies, Ready-to-Eat/Cook, and many more, making it effortless to find exactly what you’re looking for. “In a store of our scale, ranging mostly from 300 to 600 square feet and having about 4,000 SKUs, we’ve tailored our inventory to ensure precision and conciseness. When you step inside, you’ll find exactly what you’re looking for,” asserts Akshay. Citing an example, he says that if a shopper comes to the store looking for juices, she will find three to four prominent Indian brands and an equal number of imported juice brands on the shelves.

Should any specific item not be readily available, the stores maintain strong customer relationships to promptly address and fulfill requests. Regular feedback from customers further guides their product selection, with a commitment to finding and offering brands or items that customers ask for and like. This customer-centric approach underscores the retailer’s dedication to meeting diverse consumer demands and fostering a positive shopping experience tailored to individual needs.

 When Akshay and Kurush are questioned about how they source the expansive array of products available at their stores, they maintain that their sourcing strategy is a closely guarded trade secret. As seasoned retailers, they emphasize the importance of careful selection and strategic partnerships in building their inventory. Their approach involves extensive market research and direct engagement with suppliers and distributors. By forging strong relationships within the industry, they gain access to a diverse range of products that cater to various consumer preferences and trends.

“Our foremost challenge revolves around determining the optimal product assortment for each store location. This decision-making process poses significant complexity and is central to our operational concerns,” admits Akshay. Given the diverse array of food categories Bombay Gourmet Market stocks — World foods, Asian and European beverages, vegan, gluten-free, and health-oriented options — optimizing space within a 300 sq.ft. smaller store, and a 600 sq.ft. medium-sized store, and ensuring  effective and prominent display of all products can be a daunting challenge.      

 Akshay and Kurush explain that they have been able to overcome the challenge by listening to and earnestly acting on the feedback received from local distributors. They also get insights from the brands and from an AI-based tool they utilize, which helps them to understand customer consumption patterns based on which they make informed decisions.

Using AI tools, Akshay and Kurush analyze whether the market is predominantly vegetarian or non-vegetarian, and whether it caters primarily to the upper-middle-class demographic. Additionally, they assess the dining habits of the local audience and determine the product mix for their stores based on these insights. Both recognize that there is no universal one-size-fits-all formula to assortment and inventory management.

At the same time, Akshay and Kurush prioritize quality and innovation in their product offerings. They conduct rigorous evaluations, including product trials and quality assessments, to ensure that each item meets their standards before it reaches the shelves. Their commitment to customer satisfaction drives them to continuously seek new and exciting additions to their inventory. This proactive approach not only enriches the shopping experience for their clientele but also positions their stores as hubs of discovery and convenience.

“We tailor assortment and inventory to meet the unique demographic needs of each store. Therefore, each store is approached as a distinct entity from its inception. We are currently developing an automated inventory replenishment system that will replenish inventory based on sales patterns, thus streamlining operations and enhancing efficiency across the board,” informs Kurush. This proactive and innovative approach to merchandising and assortment has enabled Bombay Gourmet Market to develop its unique selling proposition centered on providing a seamless shopping experience where customers easily find what they seek upon entering the store.  

As expert retailers, Akshay and Kurush understand that sourcing is not just about acquiring products but about curating an experience. By maintaining their trade secret and staying agile in their sourcing practices, they aim to consistently deliver a unique and compelling assortment that distinguishes their brand in the competitive retail landscape.

“Initially, Akshay and I handle the assortment for our franchisees. But after one month, two months, three months, the store owners themselves begin giving us feedback. They inform us about customer preferences and local brands they want us to stock. We value this ground-level feedback because it helps us understand diverse demographics and buying patterns across the country,” informs Kurush.

Laying on the theme further, he adds: “Every city has its own conditions and consumption patterns shaped by demographics and cultural factors. Understanding these differences is crucial for tailoring our offerings to meet the specific needs of each community.”

Akshay emphasizes that it is important for retailers to recognize and understand the unique needs of each location. “Products that sell in Goa, like impulse items and party products, may not be suitable for Rajkot, where consumer behavior and preferences differ significantly. It’s counterproductive to go by rigid rules like trying to match inventory in Mumbai with that in Rajkot or Goa. We adapt accordingly and are flexible in our approach to building the assortment across our stores.”

To ensure newness and novelty in the product basket, Akshay and Kurush prioritize supporting independent brands, particularly new and health-conscious ventures seeking entry into the retail sector. “We actively engage with these brands, evaluating their products through trial testing and background checks before incorporating them into our offerings,” says Akshay.

Bombay Gourmet Market adheres to stringent terms when introducing new, health-focused brands. The approach includes rigorous sampling to ensure customers experience and appreciate the product before making a purchase decision. This proactive sampling strategy not only enhances customer engagement but also boosts product uptake and ensures that items are well-received rather than left idle on the shelves.

“Our approach is flexible. We do not enforce rigid criteria that could exclude promising new brands. Instead, we seek partnerships with like-minded brands committed to robust business goals and growth within the retail industry. At the heart of our strategy is delivering a personalized customer experience. Introducing new brands enhances this experience as our loyal customers eagerly anticipate discovering fresh additions to our selection,” explains Kurush.

“When customers visit us, many inquire eagerly about our latest offerings, asking ‘naya kya hai?’ This curiosity drives us to continuously surprise and delight them with innovative products. Whether vegan alternatives, sugar-free options, or baked snacks with a focus on health, our goal is to bring these offerings to tier two and tier three cities, thereby promoting Indian brands and enriching community experiences,” adds Kurush.

A playbook for grocery franchising

Following the initial launch of a few self-owned stores, Akshay and Kurush transitioned completely to a franchise model for Bombay Gourmet Market. Today, all stores are operated and owned by franchisees. “We shifted away from company-owned stores due to the substantial backend operations required to ensure seamless service to our franchisees. This includes maintaining a consistent product assortment and continuously improving overall store operations,” says Akshay.

Aksahy and Kurush concluded that maintaining both company-owned stores and franchise operations would lead to potential biases favoring the company-owned outlets due to higher interest. Therefore, they made a conscious decision to exclusively collaborate with franchisees and focus on alleviating the logistical complexities of franchisees in managing supply chains, optimizing assortments, adding new inventory, negotiating margins, and other operational tasks.

Operating as partners with their franchisees, they ensure mutual respect and autonomy in outlet management. This strategic shift allows them ample resources and focus to foster business growth comfortably. “We will reevaluate the possibility of reintroducing company-owned stores once the business expands to a desired scale,” reveals Akshay.

Explaining their process of franchisee selection, Kurush shares that there are some important boxes to check. “When considering potential franchisees, our foremost criterion is their alignment with our operational ethos. We seek partners who share our passion for products and customer relationships. For us, financial capability comes second: What truly matters is their commitment to running the store hands-on.”

For those interested, the initial investment ranges from 50-60 lakh rupees. This includes transparent costs detailed in a layout plan covering structure, tiling, branding, and more. Franchisees are free to manage construction independently or with their own contractors. Additionally, Akshay and Kurush provide franchisees with a list of specified brands and products but allow flexibility in procurement. A nominal franchise fee is also required, along with stocking costs, totaling around 15 lakh rupees for a typical 400-500 sq.ft. store.

“For us, how much money a potential franchise can bring to the table is secondary. It surely is an important issue to address — but it’s just one piece of the pie,” observes Kurush. The most important consideration for Akshay and Kurush is that franchisees must immerse themselves in daily operations. This involvement ensures that franchisees understand the business dynamics and maintain effective relationships with staff and customers. It’s a prerequisite that safeguards against potential disputes and aligns with Bombay Gourmet Market’s franchisee-owned, franchisee-operated model.

“Ultimately, our ideal investor is someone eager to engage directly in the gourmet product market, treating the franchise as their own business. This approach fosters a cohesive partnership where mutual goals of growth and brand success are prioritized,” says Kurush.

Emphasizing their distinctive franchise model, Akshay and Kurush assert that no one else in the industry operates franchises in the same way. Outlining comprehensive details about operational processes, innovations, challenges, and support mechanisms offered to franchisees, they underscore the intricacies of managing the supply chain and how their proactive efforts ensure seamless operations across all franchise locations.

Kurush and his team impart a week-long crash course to the onboarding franchisee in all operational and retailing aspects. The training is rigorous with a level of detail so precise so as to be almost clinical. Lessons in handling merchandising and assortment, inventory management, customer relationship and personalization are all imparted in a way that they become almost tattooed on the back of the hand of the franchise operator.

“Franchising our business model involves more than just branding. We provide a comprehensive supply chain solution. Coordinating with over 500 distributors for our 4,000 SKUs is a massive undertaking but we ensure seamless stock management for each store. To further simplify and streamline operations, we’re working on, as mentioned earlier, developing an AI-powered system that automatically restocks inventory. This new technology demonstrates our commitment to keeping up with market needs and improving our services,” points out Kurush.

Once the franchisee completes the store setup, Kurush and his team conducts a thorough local market analysis. Utilizing a database of 18,000 items, optimal product assortments tailored to customer demand patterns are curated. Following the finalization of product selections, purchase orders are generated directly through the software and streamlining of procurement is done with suppliers via WhatsApp or email.

Akshay and Kurush have established relationships with national and regional distributors, which facilitate swift order processing. Upon receipt of purchase orders, goods are integrated into the system through detailed purchase entries. The inventory is monitored to address any discrepancies and to ensure that stores are fully stocked within 10-15 days.

“By supporting franchisees through every step, we provide comprehensive training on software operations, inventory management, accounting, and compliance. This hands-on approach guarantees operational excellence across all locations. Occasionally, logistical challenges arise, particularly in remote areas where specific gourmet products may be scarce. To mitigate this, we maintain a small warehouse in our main office in Mumbai, which enables direct fulfillment when local distributors fall short,” says Kurush.

This collaborative approach underpins Bombay Gourmet Market’s successful franchising strategy and how Akshay and Kurush’s commitment towards franchisees extends beyond the initial setup. To address any emerging needs, the duo also conducts regular visits and virtual meetings to reinforce operational standards and retailing excellence.

Integrating ERP technology and online solutions

Bombay Gourmet Market has long relied on its ERP software, specifically Gofrugal, which has been integral to their operations since their inception. Despite occasional challenges with the software, they continuously adapt and optimize its use.

Akash and Kurush emphasize that while the software is crucial, understanding its reports and insights is equally vital. Interpreting sales reports, for instance, allows them to discern trends for popular items such as Coca-Cola, Parle-G biscuits, or Italian tomato sauce. This understanding informs strategic decisions to enhance product offerings and sales strategies.

On a monthly or bi-monthly basis, the two adjust product assortments based on sales trends and consumer behavior. This dynamic approach ensures that inventory levels are consistently optimized to meet customer demand effectively.

Recently, Bombay Gourmet Market announced a strategic partnership with Yango Tech, known for its innovative solutions in global technology. Central to this partnership is Yango Tech’s White-Label Store App, an advanced tool designed to elevate the online grocery shopping experience. Powered by sophisticated machine learning, it delivers personalized recommendations for a streamlined user journey. The App’s pre-built design reduces development time and will enable Bombay Gourmet Market to swiftly integrate advanced online grocery services.

This collaboration aligns seamlessly with Bombay Gourmet Market’s strategy to ramp up its online presence and cater more effectively to customer needs. The focus is on optimizing the online app experience to increase customer engagement and convenience. In addition, the partnership will enable Bombay Gourmet Market to white label a wide array of products, spanning from ready-to-eat to ready-to-cook ranges. By white labeling, the retailer aims to imbue each product category with the hallmark of freshness and small-batch craftsmanship, thereby ensuring that every item meets stringent quality standards.

White labeling will also allow Bombay Gourmet Market to leverage its expertise in sourcing and curating premium ingredients, and crafting them into gourmet offerings. This approach not only ensures consistency in taste and quality but also enables the brand to maintain competitive pricing without compromising on excellence.

Yango Tech’s White-Label Store App will allow Bombay Gourmet Market to roll out live order tracking and dynamic pricing based on real-time demand, besides ensuring competitive prices. The App supports flexible payment options including credit cards, debit cards, and e-wallets for added convenience. The App will also allow Bombay Gourmet Market to highlight its unique brand identity with visually appealing product displays and help the retailer to introduce a transforming online grocery experience that combines technological innovation with the richness of gourmet selections.

The road ahead

After 4 years of grocery retailing operations in both online and offline mode, the time has come for Bombay Gourmet Market to press the gas pedal hard and crank up the top gear. The retailer is already rolling the dice by doubling down on its AI-based app and launching new stores under its franchise network. “We are already into developing AI solutions with the aim to enhance the customer experience and provide instant and intuitive interactions rather than traditional search methods. Our goal is to create a seamless, mood-based interface. As we progress towards this vision, our plan includes expanding our store network and launching our own digital app,” says Akshay.

Over the next three years, Akshay and Kurush plan to grow their franchise store count from the current 18 to maybe another 300 odd stores. “For now, we want to stick to west and south India, where we already have a good brand presence. Once we are, you know, another 35-40 outlets strong, we will then start moving northwards and eastwards as well. We plan expanding to cities like Nashik, Indore and Jaipur but that’s going to be over some time,” reveals Akshay, before signing off.

The post How Bombay Gourmet Market is charting franchise success with affordable gourmet retailing appeared first on Business of Food.

Its unique franchise model has helped turn aspiring rural entrepreneurs into successful supermarket owners, besides creating a nurturing ecosystem for supporting new retail  ventures and opening up new entrepreneurial avenues for rural  communities.

Its much-acclaimed franchise model has earned hearty mart widespread kudos, nationally and globally.  Apart from its food and grocery retail franchise business, hearty mart has also diversified into other sectors of the food business and has successfully created and built 9 micro-enterprises by  partnering with micro entrepreneurs of villages.

How many grocery chains in the country earn the stripes to make it to a study project at India’s top and most prestigious business school? Well, Gujarat-based Hearty Mart has not only been a case study at IIM Ahmedabad and other leading Management institutes, its business model has also been taught globally at the European Case Clearing House for many years now.

The Hearty Mart chain, which operates its flagship company-owned store in Ahmedabad and manages another 15 franchised stores in the villages of central, south, and north Gujarat under the Hearty Mart brand, has earned national and international recognition for offering a modern retail experience to the bottom-of-the-pyramid consumers in semi-urban and rural markets across the State since 2004.

The story of Hearty Mart  has also been covered by marquee international magazines like Forbes and Fortune, and leading Indian publications like Open magazine, The Economic Times, New Indian Express, Hindu BusinessLine, and others.

How the Journey Began

Hearty Mart’s storied retail journey started with a 1600 sq.ft. store at Vishala Circle in the Juhapura neighborhood of Ahmedabad, in February 2004. But the location and timing seemed hardly conducive to the birth of a new business.

Following the bloody 2002 riots in Godhra, Juhapura had turned into a haven for Muslim refugees from all over the city and neighboring districts. The population had swelled to about 5 lakh, making it the largest Muslim neighborhood in Gujarat.

It was against this backdrop that Hearty Mart launched its first store, which was envisioned as a mini-supermarket for grocery and daily-need products and, in the aftermath of the riots, it came to be seen as a beacon of post-riot harmony and progress.

The shop offered discounted prices, which were lapped up by the residents in the locality. At the same time, it offered a shopping experience that was modern and contemporary but without frills and yet fulfilled the desires and aspirations of people who missed out on big-brand organized retail.

“With the aim of bringing convenience to the locality, the Hearty Mart maiden retail venture was modeled as an ideal neighborhood convenience store whose value proposition of ‘Sabse Khaas Ghar ke Paas’ offered the promise of being a one-stop-solution for meeting the daily needs of groceries, cosmetics, food grains and other basic merchandise,” says Nadeem Jafri, Founder & Chief Mentor, Hearty Mart

Meanwhile, the influx of a large Muslim population into Juhapura created a booming demand for real estate in the locality, with the added promise of imminent future development.  But the Juhapura neighborhood, despite the value appreciation of its real-estate, still did not have a proper organized retail store, which could provide the convenience of purchase to its residents.

Invoking an expression that refers to new and untapped markets as ‘blue oceans’, Jafri says that the decision to open Hearty Mart’s first outlet in Juhapura was a Blue Ocean strategy.  Jafri’s acumen lay in spotting this gap and in identifying the opportunity to start an organized food and grocery store in the fastest developing area within Juhapura.

“Although there were other superstores such as Reliance Fresh and Big Bazaar in Ahmedabad, none had ventured into restive Juhapura,” recalls Jafri. The mention of Big Bazaar lights up a nostalgic link and an old cherished memory in Jafri. After completing his MBA from IMS Indore in 1998, Jafri worked in the media and advertising businesses for eight years. The idea to get into entrepreneurship with food retailing was born out of his frequent visits to a Big Bazaar outlet near his office

“It was 2002 and I was working for an advertising agency whose office was located inside the Phoenix Mill Compound at Parel, Mumbai. Just opposite our office stood a Big Bazaar store. I used to visit the store regularly and enjoyed my shopping experience there. The merchandise on display left me very impressed. This was my first experience with an organized retail store of that magnitude and the impressions they left catalyzed my own deep desires to venture into Modern Trade retail,” remembers Jafri.

Two years on, Jafri quit his job to launch his own food & grocery retail business with a capital of Rs. 62.5 lakh, which he raised in partnership with a few friends in the real estate and hotel industry.

Hardships and Travails of Food & Grocery Business

However, Jafri soon realized how tough it was for a newbie entrepreneur to run and sustain a food retail business on a profitable basis.Hearty Mart used every trick in the book – from customer loyalty programs and home-delivery services – to raise its bottom line, but progress was very slow. It required sales of Rs. 3.75 lakh a month to break even, and it was proving to be a stretch.

To support and finance his new business, Jafri turned to his family and friends for help. As someone who hails from Gujarat and is a native resident of Ahmedabad, it was natural for Jafri to look up to his relatively prosperous Cheliya Muslim community to support the venture. It helped that his uncle was the community head of the sect, making it relatively easier for Jafri to raise the capital from friends and relatives

“The initial five years of my retail journey were really tough as the store did not break even during this period. But disappointments and failures are a part of the entrepreneurial journey. As an entrepreneur, I was required to remain calm through this testing time,” reminisces Jafri.

He left the day-to-day running of the store to his colleagues and took up a job selling space at Times of India and later, joined Grey Worldwide, an advertising company where he worked in an earlier stint. Jafri also started teaching advertising and organized retail at business schools such as Proton Business School, NRIBM, and Idea Foundation, in and around his hometown Ahmedabad

He taught for six years in different colleges and B-Schools from 2006 to 2011. This experience, apart from buoying the financial survival of his debut business, also proved to be enriching and groomed him into becoming a mentor. It gave him a chance to interact and mentor young students and he came to realize that he was good at mentoring. “I took this learning to Hearty Mart and helped my team with the necessary mentoring and groomed them. I found a suitable role for myself I groomed our top leadership in my set-up and they, in turn, groomed their subordinates further,” shares Jafri.

He attributes his success as a mentor to the support of the rural community he belongs to, which is into farming at the rural level and into the hotel/ restaurant business in cities. “I belong to the family of their spiritual head, and hence gaining their trust was easier for me. The mutual respect we have for each other – me and the community, has helped us grow together. They are ready to experiment on my ideas and take my advice positively and work on it to execute with perfection.

My exposure to the outside world in media, advertising and communication industry and their knowledge of the farming and food-grocery products has created a winning combination as they produce the best of products while I find the ways to create a brand out of those products.”

At the same time, the initial setback in business taught Jafri two things, which helped to shape his onward entrepreneurial journey. First, the experience of dealing with students made him a better mentor to his business team and, second, the failure at his store inspired Jafri and his team to think more innovatively and create a unique retail franchise model for the business.

How the Franchise Idea Became a Turning Point

“I feel that failure can act as a much-needed booster dose for would-be entrepreneurs. It can help ignite the fire in an entrepreneur and inspire him to do better,” says Jafri, recounting how, despite the continuing struggle to stabilize his business, he still went ahead and launched a retail franchise network, besides also foraying into the HoReCa segment

By 2007, the Juhapura store business had started showing signs of stabilizing, providing the impetus for Jafri and his team to launch their rural franchising concept. The concept was born out of the learnings that Jafri and his team gleaned from entering into an unexplored Juhapura and provided them with the insights and courage to target other unexplored areas of rural Gujarat.

Finally, the page turned, and Jafri’s Juhapura store broke even on the positive side of the ledger in 2009. Since then, it has kept growing 15-20% annually, pulling in over Rs. 3 crore in revenue in 2020. “Had we succeeded in earning profits straightaway, we would have remained a one-store venture without innovation,” feels Jafri.

“There are many aspiring entrepreneurs who would like to take up organized grocery retail as a business but feel handicapped to pursue their ambition. More importantly, the long-term strategy for growth in the retail industry is to have multiple stores. Even we wanted to expand in this manner but found that the lack of funds made it difficult. Hence, we came up with the innovative idea of expansion through franchise stores by tapping into the social network of rural community residing in villages,” says Jafri.

With the help of his team, comprising B-school graduates and senior partners at Hearty Mart, Jafri set up a Franchise Development Cell, whose objective was to provide a retail ecosystem to its franchises and work as a guiding force for them.

A Franchise Model for Rural Entrepreneurs

“With our franchise model, we train the entrepreneurs at our Juhapura supermarket, share with them the insights and knowledge of organized retail, and guide them to run their own franchise store at their respective villages. Creating entrepreneurs at a rural level with our franchise model and hand-holding and supporting them through our Franchise Development Cell makes for a unique business model at Hearty Mart,” states Jafri.

“Our vision can be best defined as: To touch the life of every Indian and provide him with the best merchandise that suits his lifestyle and to constantly work on opening up new entrepreneurial avenues for rural communities. We help the entrepreneurs with their franchise business as we believe that our growth would be reflected in their growth. We nurture them and train them and even invest in their companies to make them own a venture,” adds Jafri

In that sense, Hearty Mart works on an inclusive growth strategy. The social impact is that it generates entrepreneurs and promotes entrepreneurship at the rural level. Franchisees have to pay a one-time fee and a brand royalty under the Hearty Mart franchise model. “We take a fixed fee ranging from Rs. 5 lakh to 10 lakh, depending on the quantum of efforts we anticipate in developing the franchise. A recurring brand royalty of 0.5% on annual sales is also part of our license fee structure, points out Jafri.

On its part, Hearty Mart takes up the responsibility to do the store layouting, purchasing the inventory, training the managerial staff of the franchise in various aspects of organized retail such as usage of software, SKU building, among other things. It also monitors their data related to sale & purchase and guides them regularly on their inventory management decisions and promotional schemes on a periodic basis.

To design and execute the promotional strategies, the Hearty Mart team regularly visits franchise stores to sew up tailor-made offers and schemes that suits the needs of the respective franchises and their customers. It has introduced smart card and loyalty programs for key customers of the stores besides also launching monthly promotional discounts on select products in the stores.

At the same time, Hearty Mart expects its franchise stores to follow faithfully the guidelines of its franchise document and be honest in their dealings with their customers and the mother brand. “Basically, it is their store and they need to work on the topline and bottom-line even though we are always there to support and handhold them as and when needed,” says Jafri.

Distributorship for certain brands is also managed by Hearty Mart through which it purchases merchandising stock centrally and sends it across to its 16 franchisees. “The rural franchisee network under the Hearty Mart model has thrived because it is backed by a robust ecosystem. We have created an ecosystem that handholds our rural franchisees, helps them procure products profitably and guides them in running their store efficiently,” shares Jafri.

Success Recipe Behind the Franchise Model

Right from its first franchise store in 2007, which opened in Ilol Talav village near Himmatnagar district, Hearty Mart has been working closely with rural retailers as their franchise partners. As on date, Hearty Mart operates a chain of 15 franchise stores at the taluka level, semi-urban centres and in rural villages.

That the first franchise store at Ilol village still continues to operate even 17 years after hitching its star to Hearty Mart’s wagon attests to the success and credibility of the latter’s franchise model.  “The parameter of success isn’t always the number of stores owned by a retail chain but about creating successful stores. Multiple loss-making stores, including those belonging to large retail networks, shut down regularly or risk closing down. We have witnessed many prominent food-grocery retail chains closing down their operations in the face of sustained losses,” observes Jafri.

On its part, Hearty Mart strives to work closely with its franchises to help them earn good profits. This unwavering belief that Hearty Mart’s own success is incumbent on the progress and performance of its franchises has resulted in most of the franchise stores doing good business in their respective villages and towns.

The Dholka franchise is yet another case of successful organic expansion under Hearty Mart. The store was set up in 2012 and in 2019, the franchise partner added one more store at a different location in Dholka. Another franchise, in Pimpodar village, added an additional floor to his shop in 2016.

“Our franchise supermarket owners have been very successful and happy in continuing their association with us. Our innovative model is discussed as a case study in premier B-Schools, including the IIM-A, and our business model is taught overseas for helping and handholding rural retailers with the right guidance and skills-set to become modern supermarket owners,” avers Jafri.

But of all the deserving recognition of Hearty Mart’s incredibly successful franchise model, he counts the book titled “Super Market for Rural Customers – A Study of Community Oriented Social Enterprise in Gujarat” published by The Academic Foundation as the most special and best acknowledgment so far.

It is a dedicated book on Hearty Mart written by two research professors – Subrata Dutta & Munish Alagh – of Sardar Patel Institute of Economic and Social Research (an ICSSR Institute), Ahmedabad.

They did a detailed research study on our business model. The US-based economist Dr. Abu Saleh Sharif has written a forward for the book. It is available online on The Academic Foundation website. ‘‘I consider this as the best accolade on our work so far, as it has the potential to motivate young entrepreneurs to study our business model, get inspired and strive to do something similar or better than what we could do,” says Jafri.

The result of the hard work it has put in to make its rural franchise model a success has won laurels for Hearty Mart and  has also paved the way for Hearty Mart’s entry into more villages in Gujarat. The retailers’ 15 franchise-operated stores in Gujarat’s rural market cover small towns and villages like Dholka, Ilol, Chhapi, Pipodar, Kakoshi, Vadnagar, Idar, and many more covers over 23,000 sq.ft. in retailing area

While Hearty Mart also has bigger stores spanning 1,000-2,500 sq.ft. to even 6,000+ sq.ft. in towns like Ahmedabad, Dholka and Sidhpur, most of its franchise outlets are smaller stores ranging from 300 to 550 sq.ft. in size depending on the demographic profile and real estate cost of the location. “A total investment of approximately Rs. 40-45 lakh is needed for opening a decent 1,000 sq. ft. store in a rural set-up. The net margin for the retailer is 7-8 per cent. This makes it a business of turnover. Typically, a 1,000 square feet store in a rural setup would take around three years to break even,” informs Jafri.

Another big difference is that Super Bazaar is an investor-backed franchisee, unlike Hearty Mart’s other supermarket franchises, which are owned and backed by rural retailers who invest in the shop and run it. The Super Bazaar franchise has the freedom to purchase the inventory from anywhere as per their liking and understanding and they need to only maintain the quality standard.

But unlike Hearty Mart’s other franchises, which are food-grocery convenience stores in a small size format ranging from 1,000 to 2,500 square feet, Super Bazaar has 6,000+ square feet of retail space, which has a food-court, a grocery shop, a lifestyle and apparel shop, a bakery and kids’ play area.

Hearty Mart calls it Super Bazaar model as ‘Freedom Model’ and it is run by Hearty Mart Marketing & Logistics, a subsidiary of Hearty Mart Enterprise. “We provide them with the entire inventory and we have placed managers to run the store under our guidance. We visit the outlet periodically to chalk out the future growth plans. Under the Super Bazaar. Freedom Model, we co-own the store along with the investors whereas other Hearty Mart franchisees, in most cases, are owned by the rural retailers and their partners who run the stores in their respective villages,” reveals Hearty Mart’s Group CEO and MD, Vajir Ali Momin.

Inventory and Merchandising

Being a food-grocery retail chain, Hearty Mart’s small convenience stores stock products from regional and local brands as well as those of leading brands like HUL and P&G, which occupy over 40% the shelf-space.

The product categories related to food, groceries, and beverages are the fastest-moving at Hearty Mart stores. The popular food categories include loose lentils and rice along with packaged spices and flavorings like coriander, cumin, and chili powder belonging to national and regional brands like Everest, Badshah, MDH, and Ramdev. In the villages, the more localized brands in the same product line, but with an economical pricing, are sold.

In beverages, regional teas compete with the might of the national players like Tata Tea and Lipton. Jivraj Tea, Wagh Bakri and Navkar are the few brands that fight tooth and nail with the established and multinational tea brands. Hindustan Unilever’s and Proctor & Gamble products in cosmetics, shampoos, dental care and hair care form a large part of other fast-moving categories at Hearty Mart

Managing the product inventory of stores is a critical element contributing to the success of Hearty Mart’s franchisee model. Inventory Management makes Hearty Mart stores different from other grocery chains in that it works more on area-specific inventory taking a completely customer-centric approach, which is based on the consumer and trade research of the proposed area of operation

“We conduct consumer survey of the buying patterns, particularly of fast-moving consumer products and food groceries, of people residing in the proposed location and take observational tours of competing stores located there to check the products/ brands available with them before we invest in the inventory for starting up a franchisee. This helps us in coming up with the right product inventory mix for the residents of the locality,” says Sabirhusen Momin – Retail & Franchise Head, Hearty Mart.

Most multi-locational chain of stores, either owned by an individual, corporate or a venture capitalist, have centralized purchase and inventory decisions. But at Hearty Mart chain of franchise stores, which have different store owners running different franchises at different locations, the inventory decisions are decentralized according to the needs of the specific store and the locality and, hence, the store inventory differs from store to store.

“The needs for products change every few kilometers in our country of diverse consumption tastes and culture. However, our in-house private brands are sold across our network of stores. The quantity and number of SKUs in each store might differ depending on the demand for these brands in that specific area but they are invariably sold through all our stores. You can say that our retail stores are known for providing convenience to our customers by offering them a wide range of products at an optimum price,” states Momin.

Diversification to Become Complete Food Company  

Apart from its food and grocery retail franchise business, Hearty Mart has also successfully diversified into other sectors of the food industry. It has successfully created and built 9 micro-enterprises by partnering with micro entrepreneurs of villages. These enterprises are into manufacturing of different product lines such as tea, bakery, atta, paper napkins, toiletries, spices and flavorings, among others.

All these businesses are part of the Hearty Mart brand companies, and the products manufactured by them are sold through its network of stores. The synergetic harnessing of the production skills and market development skills of different companies under the Hearty Mart Group has worked well for the Group as a whole and for its business partners, rural entrepreneurs, franchises and other stakeholders

One of Hearty Mart’s early initiatives to diversify and branch out into new sectors of the food business was taken in 2008 when it launched a wholesale business of food grocery and hotel supplies – Hearty Mart Enterprise Pvt. Ltd. The creation of Hearty Mart Enterprise came about as a successful meeting of minds between Jafri and Vazir Ali, who had started Ashish Enterprises – a HoReCa Supplier – with Hussain Abbas, another entrepreneur. Ali and Abbas proposed a merger and Jafri accepted on the condition that they would help build Hearty Mart Enterprise into a food company with interests in the entire farm-to-shelf value chain.

The backward integration paid off. Soon, HM Enterprise was throwing up cash, and its scale was helping Jafri stock Hearty Mart at much lower costs, thus offering increased margins. “The creation of HME was a milestone for our group as we merged Hearty Mart with Ashish Enterprise, a company already working into the HoReCa domain. Today, Hearty Mart Enterprise caters to more than 1,000 restaurants across Gujarat, Rajasthan and Maharashtra, and is known as an established HoReCa wholesale supplier in these markets,” says Jafri.

With the expansion in numbers and geographical outreach, the need to integrate the businesses to maintain uniformity of quality and service deliverables became essential. This led to the inception of Hearty Mart Marketing & Logistics in 2010, which was aimed at providing back-end support to the Hearty Mart franchise network by helping them in procuring products for their stores, at an economical price.

Like all supermarket chains, Hearty Mart’s success also lies in its ability to source products at low costs. The scale of purchases helps chains such as Big Bazaar and Reliance Fresh, or international ones like Walmart and Tesco. But the size and scope of Hearty Mart stores cannot bring in the cost advantage. Hearty Mart has gotten around the problem by integrating a wholesale supply business to the retail one. With the range of consumer and food products from Hearty Mart Enterprise at its disposal, Hearty Mart Marketing & Logistics entered into the wholesale business of these products.

Besides, it helped to connect HME and the franchises and in tapping the network of store owners, mom & pop kirana stores and retailers and also becoming a channel of distribution for Hearty Mart products as well as products from other brands. Hearty Mart Marketing & Logistics became an independent super-stockist and distributor for many outside brands like Cadbury and Crave Eatables, and also for the in-house brands introduced by Hearty Mart Enterprise

All these ventures opened up a window of new opportunities. One such opportunity gave birth to Hearty Mart Tea Packers, which launched a new brand of tea – Day Break Tea – and tapped onto the huge potential market of highway restaurants.

Under Hearty Mart Enterprise, the company launched its own private label brands – Chef Ki Pasand spices and masalas to cater to the hotel and restaurant industry; FMCG brands like ‘GoodTime’ spices and flavourings; ‘Zareef’ spices and masalas, and also ‘Khamir ATTA’ to cater to the retail market. In recent years, the Hearty Mart Group has also launched Hearty Mart Bakers Point, its in-house bakery products’ business, besides launching its own online store.

Technology Adoption

Hearty Mart, though being a predominantly rural chain of stores, has adopted technology with perfection. “Our franchises today understand the usage of data analytics in monitoring inventory-mix performance and consumer trends. And in order to further augment this process, we have implemented ERP solutions by investing in the centralized server at our office. The data thus collected at our server helps us in monitoring the overall store performance and devising customized product bundling strategies for different stores and other promotional schemes,” informs Jafri

With e-commerce and online grocery pulling ahead as a more convenient medium of shopping, Hearty Mart launched its online store www.heartymart.com/shop to widen its customer base and beef up its brand’s presence online.

For efficient billing and stock keeping, each store has installed point-of-sales software, which tracks the inventory movement and helps the store in-charge in identifying the slow-moving products. Such products can then be removed from the shelf and the process thus helps in refining the inventory mix further and making it more market-ready.

In order to bring the franchises on a common platform, Hearty Mart uses the Trello software application extensively to manage its meetings and for exchanging business ideas. All franchises are also equipped with hi-tech security systems that allow them to monitor their shop-floor behavior from anywhere at any given time. “We understand the value of e-commerce in today’s fast-changing consumer world and hence have started selling our products through prominent online marketplaces like Amazon and Flipkart and our own online shop www.heartymart.com/shop to reach out to our online customers effectively,” says Jafri.

Helping MSMEs & Local Brands

To pursue its objective of creating and building on the rural entrepreneurship ecosystem in right earnest, Hearty Mart has established a stellar track record of encouraging and supporting young and aspiring entrepreneurs, brands and suppliers

Its hand-holding efforts to nurture retailers in the rural parts and its liberal allocation of shelf space to Micro, Small and Medium Enterprises lends enough credibility to the brand’s assertion of helping rural entrepreneurs

Jafri’s personal association in the capacity of a mentor with the CIIE-IIMA incubation centre and GUSEC-Gujarat University is helping many food-grocery start-ups from these centres to get access to Hearty Mart’s Juhapura store for product testing and other marketing activities. “If we see potential in their product quality and offerings, we help them place their products at our stores. There are a couple of ready-to-drink juice brands coming out of these incubation centres, which have been able to get shelf space at our Juhapura and Makarba stores, reveals Jafri.

Very recently, it gave space to a start-up perfume brand and also helped it with promotions. The brand is now being sold through all Hearty Mart stores. “These initiatives have definitely helped the Hearty Mart brand create and build its image as a rural and a startup- friendly brand,” affirms Jafri. Other than helping small local brands to mark their presence at its stores, Hearty Mart also actively collaborates with bigger, more established brands to build new categories and reach out to newer and wider customer base

On Brand-Retailer partnership, Jafri says that it is necessary for a retailer wishing to earn higher margins as it can create a win-win situation for both – the brand and its retail partner. A retailer is extra attentive to the brands whose exclusive rights have been given to him. In India, we saw the classic case of Xiaomi brand launched with an exclusive tie-up with Flipkart.”

Use of Innovative Retailing Concepts

Dwelling on the interesting concepts or innovations that Hearty Mart has introduced at its stores, Jafri says that his food and grocery retail customers prefer good quality products at an economical price. But they tend to avoid experimenting with unfamiliar, new brands or products, which they haven’t used in the past. This is where a bundling or a cross-bundling strategy helps to introduce new products on the shop-floor and create demand for the same

Jafri narrates a small incident that happened at his store where he introduced a premium brown bread with an introductory retail offer. The store staff waited for few days expecting to see good uptake of the product. But due to the pricing of the bread – it was a premium bread and prices were higher than the other breads available at the store – along with non-familiarity with the brand, the product movement was very slow.

“We introduced a product-bundling strategy and branded a section of the shelf as ‘Breakfast Basket’. Here, the new premium brown bread was bundled with a 100-gm pack of popular butter, a small pack of cheese spread/ cheese cubes and a bottle of jam/ ketchup. We priced it smartly, showcasing expected savings due to this bundling of products. This helped the premium brown bread make inroads in the consumer households of our regular customers and it eventually resulted in developing a regular demand for the product.”

Pointing to another case of innovative retailing at his store, Jafri recalls the period five years ago when demonetization was being implemented resulting in the sucking out of almost 86% of Indian currency from the market and leaving people to face a severe cash crunch

“We introduced an ‘ideal daily ration kart’ at Hearty Mart – it was a subsidized ration kart for our regular customers, which would help them purchase their daily ration at an economical price. The product mix of the daily ration kart was selected based on the purchase pattern of our customers, but it didn’t necessarily include established brands. The product mix was economical and offered lots of savings, which was the need of the hour then.

We created buzz around the ration kart by circulating the information amongst our customers via WhatsApp and SMS. We continued with this scheme for two months from November 2016 to January 2017. Not only was the concept lapped up, it also helped us in enhancing our image as a concerned and customer-friendly retailer with the customers showing their appreciation for this proactive step.”

In another example of the use of innovative retailing concepts, Hearty Mart keeps introducing regular promotional and seasonal merchandizing schemes based on the catchment and customer profile at its stores. For example, at its Juhapura store, which predominantly caters to Muslim customers, the holy month of Ramzan is the peak business period. “We come up with iftar packages and introduce discount schemes on beverages and dates. Every Ramzan, we introduce an ‘iftar kit’ by bundling dates, falooda mix and sharbat and create a dedicated shelf space for this special offering in our store,” says Sabir Momin

Like the Juhapura store, the rest of the franchisees that cater to all communities, roll out attractive discounts during the festive season of Diwali, Christmas, apart from Ramzan. “The organized food grocery stores main concern is to attract footfalls. Once the customer enters the store, the purchase is almost ensured. Hence, all the efforts of our promotional activities are aimed in the direction of luring customers to the store and maintaining a long-term relationship with them,” adds Momin.

Future Plans and Goals

Looking back at the road travelled so far and contemplating of the future, Jafri says that the ultimate goal is to take the Hearty Mart brand to the international level by manufacturing good quality Indian spices and other food & grocery products and exporting them overseas.

Hearty Mart’s Good Time Spices is already being exported to Canada and the US markets along with Dubai and the UK markets. “Though we haven’t been able to crack these markets fully due to Covid restrictions currently, the initial feedback and response from these markets on our products are encouraging. And we are looking forward to focus heavily on exports as we feel that we have the potential to grow and expand our export base,” says Jafri.

When asked to how he would like to describe his own strengths and best achievements as a food entrepreneur, Jafri ruminates: “Every individual is blessed with inherent strengths, which are unique to him. If he figures out this well in time, he can create a world of difference for himself and people associated with him. We fail because we try to follow or emulate others blindly without trying to understand our own strengths and the skills-set we possess.”

“Today, as a founder and chief mentor of Hearty Mart, I feel satisfied with my decision to have ventured into entrepreneurshipand sticking along. Any entrepreneur, with proper planning, innovative thinking, and an unflinching passion to succeed can create a new destiny not only for himself but also for the people associated with him,” concludes Jafri.

The post Hearty Mart: Retailer with a Rural Heart appeared first on Business of Food.

Recounting how his entrepreneurial journey took off, Gaurav Manchanda, Founder, The Organic World (TOW), a leading organic food and grocery retail chain in Bangalore, has an interesting tale to narrate. “My journey into entrepreneurship was shaped by my upbringing in Bangalore and experiences in the United States,” he says.

Having grown up in Bangalore, Gaurav’s path took a turn when he ventured to the US for higher education and work. “During my tenure in the US, I lived in Boston, New York, and California. My academic pursuits culminated with the completion of a master’s degree. Additionally, I honed my professional acumen in New York while serving as a strategy consultant,” Gaurav recalls.

While living in the US, Gaurav cultivated a passion for cooking and embraced a healthier lifestyle, inspired by the easy availability of organic and nutritious foods. “The easy accessibility to organic and nutritious foods in the US was something I admittedly took for granted. However, upon returning to India in 2016, I recognized a significant gap in the availability of such foods, including organic and clean-labeled options, which were still nascent in the market.”

Driven by his passion for healthy and organic eating, as well as a desire to address this gap, Gaurav envisioned creating a platform that would make such foods accessible to a wider community in Bangalore. Thus, the idea of establishing a retail format, known as The Organic World, took shape.

What helped to actualize Gaurav’s entrepreneurial vision was the family’s ownership of farms in the eastern region of Karnataka. Perceiving the opportunity to incorporate their organic farm produce into a retail environment, Gaurav initiated his venture in 2017 with the establishment of The Organic World stores in prominent Bangalore locales.  

Over the subsequent six-year period, TOW has undergone substantial growth, and now boasts of 17 stores, spanning some 23,000 sq.ft. of retailing area. The outlets are strategically located across several prime neighborhoods in Bangalore, which includes JP Nagar, JP Nagar RBI Layout, Jayanagar, Banashankari, HRBR Layout, Whitefield, Bellandur, Yelahanka, Malleshwaram, Koramangala, Indiranagar, HSR Layout, Cunningham Road, and other central locales.

One-Stop Destination for Healthier Alternatives

For many consumers, the gateway to embracing an organic lifestyle begins with fruits and vegetables. These fresh and clean foods serve as the initial step towards organic choices when entering the store. Their appeal lies not only in their nutritional value but also in their appearance — crispness, crunchiness, and freshness are immediate indicators of their organic quality. Fruits and vegetables serve as an immediate visual indicator of organic quality, making them the preferred choice for buyers at TOW stores.

The Organic World began as a retail establishment specializing in fresh organic fruits and vegetables has evolved into a full-basket grocer with a comprehensive collection of organic goods. The Organic World today offers the widest range of chemical- and preservative-free groceries under one roof – 3000+ SKUs that meet all the monthly consumption needs of a family. “We are India’s largest multi-store retailer for organic and natural groceries and a full-basket grocer,” avers Gaurav.

“As customers embark on their organic journey, they often progress from ‘I want to eat organic’ to ‘I want to live organic.’ This journey typically starts with incorporating organic staples like fruits, vegetables, and milk into their diets,” explains Gaurav. Over time, this commitment extends to include personal care and home care products, characterized by a preference for items devoid of harmful chemicals and allergens.

According to Gaurav, this shift reflects a conscious endeavor to prioritize health and well-being across various aspects of life. He further highlights the growing inclination towards plant-based alternatives in skincare and household cleaning, which offer gentler, safer options for individuals, their families, and the environment.

The retailer has its own in-house brand – Wellbe Foods – which offers a range of healthy alternatives ranging from pantry essentials to snacks and wellness products that suffices to meet the daily food consumption needs of a family. Whether it is snacks, breakfast cereals, health and wellness products or kitchen staples, the focus is on providing organic and natural products, completely free of chemicals and preservatives.

Fruits and vegetables at The Organic World are sourced from the retailer’s organic farm network. One such farm is Mapletree Farm in Hosur, which is one of the pioneers in organic farming in India. All farms in the network are carefully vetted by the retailer to ensure they follow the strictest organic and sustainable farming practices.

“As a conscientious and principled retailer, we firmly believe in providing our farmers with fair compensation for their crops, recognizing them as essential partners in our mission. Our goal is to foster a mutually beneficial relationship where both parties thrive. By nurturing the organic ecosystem, we aim to ensure that everyone involved – from consumers to producers to stakeholders – enjoys maximum value in a sustainable way,” says Gaurav.

The retailer also partners with brands who share its vision to offer chemical- and preservative-free better choices to the consumer. It works with like-minded local brands, SMEs, women entrepreneurs and gives them a platform to compete against the big box retailers. “Throughout our retail journey, we have taken pride in our ability to attract numerous like-minded brands to join The Organic World family, including local businesses, SMEs, and women entrepreneurs,” Gaurav explains.

Commitment to Better Choice Products for Varied Customer Segments

The Organic World caters to a diverse clientele, each with their own unique preferences and priorities. Among them are the empowered working mothers, aged 35 and above, who are deeply mindful of their family’s well-being. For these women, the top priority is providing their loved ones with the very best. That means opting for ‘better choice’ products that are organic, natural, and made without any harmful chemicals. This cohort seeks out traditional, wholesome options that align with their values and ensure the health and happiness of their families.

Another valuable customer segment for the retailer are discerning working fathers, aged 40 and above. They appreciate products that bring something extra to the table and share a common goal with their families: embracing ‘better choice’ options that elevate their lifestyle. They seek out value-added products that not only meet their high standards but also contribute to their family’s overall well-being and vision for a healthier future.

The 50+ age group also makes up a big chunk of the retailer’s consumer base. This demographic comprises consumers who are price-conscious, prioritize freshness and look for traditional products. At The Organic World, there are a lot of grandparents who can be seen shopping with their grandchildren, and looking for products they believe are truly good for their family.

Young working professionals also form a significant customer base as there are an increasing number of young working professionals who prioritize healthy food and look for better alternatives. This trend has accentuated, particularly in the wake of the pandemic and also because of the buzz about food trends on social media.

When it comes to meeting the needs and tastes of today’s younger generation, The Organic World has offerings aligned to their requirements. “Our stores stock a widely popular range of Clean Beauty and Immunity Boosting products, as well as Healthy Snacking Alternatives that appeal to this target audience,” says Gaurav.

In order to further appeal to the sensibilities of young shoppers, The Organic World also hosts key events across the city — there are contests across social media involving various brands that offer unique shopping experiences. Besides, the retailer organizes events with fitness experts and conducts live social media interactions with key brands involving exciting giveaways.

To encourage customer stickiness, The Organic World platform is designed to follow its customer’s journey right through their everyday and monthly shopping needs. “Our personalized offers are created with a theme relevant to customer experiences with respect to their daily activities. We also encourage customer stickiness through our intuitive offers complementing previous purchases. Customers also appreciate our seasonal deals. For instance, during the festive season, customers can expect special promotions on oils, ghee, and jaggery, while the focus shifts to warm foods like millets during the winter months,” says Gaurav.

As part of its customer centricity, the retailer engages and interacts with its customer base on a regular basis through social media platforms as well as through emails and WhatsApp. It also runs a campaign called #AskUsAnything, which seeks to promote transparency and work towards awareness-building by giving the customers a chance to ask the retailer about anything related to organic farming, its brands, products, and retailing practices.

When it comes to enhancing the customers’ shopping experience, The Organic World has several initiatives in place. All its 17 stores have a ‘zero waste’ section, where customers can dispense exactly what they need, thus minimizing waste and maximizing sustainability. “It’s all about empowering our shoppers to make eco-friendly choices. Many of our customers bring their own containers or jute bags, but we also offer cloth bags and glass bottles for oils, ensuring every visit is not just convenient, but environmentally conscious too,” shares Gaurav.

Another initiative The Organic World has introduced is aimed at encouraging customers to make more informed choices when shopping. They’ve developed an industry-first “Not In Our Aisle List,” which defines their entire range of products. This initiative gently guides customers away from a purely need-driven consumption pattern towards a more thoughtful and informed approach to shopping.

The “Not In Our Aisle List” is a prominent feature implemented across all 17 stores of The Organic World. This initiative prohibits the sale of products containing chemicals and harmful ingredients, prioritizing the well-being and safety of consumers. The list comprises various harmful ingredients commonly found in everyday products. These include high fructose corn syrup, often used as a sweetener in beverages, candies, cereals, and packaged snacks; artificial flavorings and colors commonly added to snacks and processed foods; Tertiary Butylhydroquinone (TBHQ), an antioxidant present in biscuits, microwave popcorn, margarine, and chicken nuggets; carrageenan, utilized as an emulsifier and thickener in products like cottage cheese and ice cream; parabens, sulfates, and phthalates commonly found in personal and beauty care items; as well as a range of acids and toxins present in household cleaning products.

In fact, the “Not In Our Aisle List” forms the cornerstone of The Organic World’s selection process. “If a brand does not conform to these standards, you will not find it on our store shelves. By ensuring the products we keep on our shelves live up to a higher standard than industry-established ones, we truly offer our customers a better choice products. This is a definitive and hard stand we have taken to give our customers the confidence that every single product on our shelves is a better choice for them and also reinforces our commitment as a responsible retailer,” says Gaurav.

The initiative has helped several brands change their product formulation, obtain the necessary certification, etc., to conform to The Organic World’s standards and be part of its offerings. This demonstrates the brands’ confidence in the retailer’s vision and contributes significantly to the cohesive synergy between brands and retailers.

Targets 25-30 Stores in Bangalore, Eyes Nationwide Growth

As all 17 stores of The Organic World are located in Bangalore, it in many ways affirms the city’s status as the nucleus of India’s organic food retailing landscape. Acknowledging that Bangalore indeed stands out as a hub for organic retail and organic offerings, Gaurav says that the city is as a prime testing ground for the acceptance of new products and innovative ideas.

He attributes Bangalore’s receptivity for organic offerings to the city’s dense population and diverse demographic composition, which includes individuals from different states and cities, as well as both local residents and migrants. “The amalgamation of these factors makes Bangalore an ideal locale for testing diverse products, whether they are technological, culinary, or pioneering in nature,” he says.

He further explains that from an organic perspective, TOW’s reception within the city has been very positive, which explains why the brand is continuing to expand its presence in Bangalore despite already having 17 stores. “We’re aiming to establish a total of 25 to 30 stores in Bangalore alone. While we’re also considering expansion into other cities, Bangalore remains a priority due to its favorable reception,” says Gaurav, adding that he is also planning expansion into additional cities such as Hyderabad, Pune, and Chennai within the year. The company envisions these new locations as strategic growth opportunities to broaden its reach and cater to a wider demographic.

Regarding price points and other factors, Gaurav says that TOW encounters similar challenges related to affordability, accessibility, and authenticity. “These are universal concerns that arise regardless of the city. However, it’s worth noting that Bangalore, as a Tier one city, shares similar price acceptance patterns with other major cities like Mumbai, Delhi, Chennai, and Hyderabad. However, Tier two cities may have their own level of price sensitivity, but they still prioritize authenticity and accessibility. Overall, the price sensitivity in these cities aligns closely with that of Tier 1 cities,” he observes.

Organic Retail Challenges: Affordability, Authenticity, and Accessibility

Gaurav emphasizes the significant challenges involved in running an organic food retail business, identifying three key pillars. Affordability takes precedence, emphasizing the importance of keeping products reasonably priced to meet customer preferences, while also considering factors like choosing the best locations for accessibility and authenticity of products.

TOW’s F&B products are generally priced at approximately 1.2 times higher in comparison to conventional items. “The lower shelf life of organic food contributes to its higher price, known as “premium”, which is generally 1.2X over non-organic products. However this premium does not translate into extra profit for farmers or retailers. Instead, it represents the total cost of the product due to factors like certification, testing, post-harvest losses, and reduced shelf life,” says Gaurav.  

When asked how organic products can be made more affordable, Gaurav believes that addressing this challenge requires collaboration among various stakeholders. “Farmers need support to transition to organic methods and navigate certification processes. Retailers also play a crucial role in organizing the sector and increasing scale to accommodate organic harvests. Additionally, educating consumers about the benefits of organic foods is essential. Government intervention through programs and subsidies is also vital for the success of this endeavor. Cooperation among stakeholders is necessary to make organic products more accessible to everyone.”

When it comes to prioritizing transparency in the pricing structure, TOW makes it possible by leveraging their scale and consolidation within Bangalore. With 17 stores under their belt, they rank among the major players in the organic food sector in the city. Leveraging their scale and addressing supply chain inefficiencies, they’ve managed to narrow the pricing gap to approximately 1.2 x that of conventional products.

The stores also use clear labeling to show how the prices of their organic products compare to those of similar items elsewhere. By providing such straightforward comparison, customers gain insight and can see the difference in price and understand and appreciate the affordability of its products. This approach ensures that TOW’s pricing structure is both transparent and accessible to customers.

Another crucial aspect is ensuring the authenticity of products, which is at the forefront of consumers’ concerns when buying organic. Buyers seek assurance regarding the true authenticity and organic nature of products, and they want to know if the products meet rigorous certification standards. “In terms of authenticity, our commitment is underscored by certifications and documentation for all our sources. These certificates are readily available in our stores, and for those seeking further reassurance, our help desk provides access to additional certificates and lab tests upon request. This meticulous authentication process ensures that our products are genuinely certified and free from harmful chemicals, offering peace of mind to our discerning customers,” points out Gaurav.

Mentioning the significant financial implications associated with product testing and certification processes, Gaurav explains that each test conducted per Stock Keeping Unit (SKU) incurs a cost of approximately 3,500 rupees, which accumulates substantially over time across various SKUs and testing intervals. “Moreover, farmers, Farmer Producer Organizations (FPOs), and suppliers also bear expenses for periodic testing and certification, typically over a three to five year timeframe. Certification costs can range from 30,000 to 200,000 rupees depending on the specific requirements. These expenditures significantly impact the overall economics of the process.”

TOW’s awareness activations also help the retailer to build on the brand’s trust and deepen its relationship with the farmers as well as the customers. “In our stores, we organize awareness events where farmers spend a day or even a week with us. This gives customers a firsthand look into the world of organic farming. These interactions create a strong bond; customers enjoy talking to farmers, learning about the ins and outs of organic cultivation. These genuine conversations, often in local languages, help build trust—a crucial part of what we do. These efforts are just part of our ongoing dedication to building trust and relationships with both farmers and customers,” says Gaurav.

He adds: “We firmly believe that just as individuals know their doctors intimately, they should also cultivate a relationship with their farmers. While doctors deal with problems after they happen, farmers work to prevent problems before they occur. Knowing one’s farmer ensures a deeper understanding of the food consumed and promotes a healthier lifestyle. To foster this connection, we facilitate farm visits where customers can witness firsthand the cultivation process and engage with the farmers.”

From an authenticity perspective, the company also collaborates with a network of farms known as Happy House Farms. This initiative involves partnering with various farms, Farmer Producer Organizations (FPOs), and markets to ensure the sourcing of high-quality organic fruits, vegetables, and produce. Farms that meet these standards become part of the Happy House Farms network.

The farms within the Happy House Farms network undergo rigorous certification processes to ensure their organic status. This involves thorough audits, including examinations of their farming practices, inputs, and soil quality. “Additionally, our team conducts internal testing regularly to verify organic compliance. For farms transitioning to organic methods, we provide guidance and support throughout the process, offering advice on inputs and assisting with certification procedures,” shares Gaurav. This commitment to authenticity involves comprehensive testing, authentication, and certification procedures.

Additionally, accessibility plays a pivotal role, as consumers prioritize convenient channels through which they can access these products, whether online, offline, or through brick-and-mortar retail stores located conveniently in their neighborhoods. The company employs various channels for accessibility, including a mobile app, website, and partnerships with last-mile delivery services like Dunzo and Swiggy. Additionally, TOW is part of the national commerce network ONDC, integrated into the India tech stack. The approach isn’t about online versus offline; rather, it’s about strategizing for each channel to best serve the customer.

In the process of selecting store locations, a key element in enhancing TOW’s outreach and accessibility, the primary consideration revolves around population density. This metric serves as a key indicator of the concentration of individuals and households within a specific geographic area. Bangalore boasts pockets of significant density, particularly in areas like Electronic City, Sarjapur Road, and certain parts of North Bangalore. These areas are distinguished by their proliferation of high-rise residential complexes and bustling communities, making them prime locations for TOW’s operations.

“While we do consider socio-economic factors in our decision-making process, it’s important to note that our customer base spans across various economic brackets. Organic food consumption is not merely a luxury but a lifestyle choice driven by a desire for healthier, more nutritious options. In fact, organic farming has deep roots in India’s agricultural heritage, reflecting a return to traditional practices where individuals cultivated their own produce or sourced directly from trusted farmers,” says Gaurav.

His comments reinforce the fact that organic food isn’t solely a premium or niche offering but rather a return to our culinary roots, and echoes the dietary habits of previous generations. “Therefore, our emphasis lies in locating stores in densely populated areas, thus ensuring accessibility to a diverse demographic. It’s noteworthy that some of our franchisees have chosen locations that may not have been our initial preference, yet they thrive due to their dense foot traffic and appeal across socio-economic groups.”

By focusing on these three overarching areas — affordability, authenticity, and accessibility — which present formidable challenges for organic food retailers — TOW has been successful in strategically positioning itself as a leader in Bangalore’s organic food market. “Over the past few years, our team has dedicated significant efforts towards addressing these challenges, and we strive to ensure that our products are affordable, genuine, and easily accessible to consumers,” says Gaurav.

Thanks to TOW’s efforts in advancing crucial metrics in organic food retail, the brand has successfully instilled confidence and trust in its products among customers. Consequently, the repeat rate of TOW’s customers returning to its stores to buy products is quite significant.

Gaurav says that customers tend to return to the stores approximately 3.2 times per month, which is considered healthy for the grocery industry. This frequency indicates loyalty and trust in the brand. “Our customer base is exceptionally loyal, believing in our mission and values, particularly in promoting an organic and healthy lifestyle,” affirms Gaurav.

The retailer aims to meet customer needs through various channels, whether online or offline, with trust, convenience, and accessibility as key elements contributing to customer satisfaction. Moreover, the retailer is also actively addressing affordability concerns, recognizing it as an area needing improvement. “Overall, it’s the combination of trust, convenience, accessibility, and affordability that addresses the challenges faced by our industry and ultimately keep our customers returning to us,” says Gaurav.

Profitability in Organic Retail

When it comes to organic food retailing, a perplexing question lingers: Why do numerous organic stores sprout up each year, only to wither away into obscurity shortly after? What lies at the heart of this existential crisis? Amidst a growing community of health-conscious consumers, the sobering reality of business mortality prompts reflection.

Gaurav agrees that it’s a significant observation and point to consider. “Many ventures in this field begin with passionate individual entrepreneurs who face common challenges of affordability, accessibility, and authenticity. These issues are intricate and not easily addressed. Affordability, in particular, hinges on customers being willing to shop at a certain price in the stores. Addressing these challenges often requires scaling up the business, which necessitates both private and public investments to ensure scalability on both the supply and demand sides.”

Boosting supply access and demand can lower prices, making organic products more affordable. Bringing in more participants and organizing the sector can also help with pricing. As prices align with conventional products, individual organic stores are likely to thrive more. Gaurav notes, “Organic stores are usually small-scale and located in less prominent areas, not main streets. This lack of density and limited product variety presents challenges to the business model, worsening the mentioned issues.”

Sharing his thoughts on the recipe for profitability for organic retailers, Gaurav says, “In general, the grocery retail sector is highly competitive and commoditized. It’s not for the faint-hearted. This applies equally to organic grocery retail. However, with increasing demand, acceptance, affluence, and awareness surrounding clean and healthy foods, we’re witnessing several factors that provide favorable conditions. Over time, with the right scale, supply chain, and efficiencies, positive outcomes are inevitable. Ultimately, upcoming retailers will recognize this and embrace sustainability. There’s no doubt about it.”

Regarding the operation of an organic food store via the franchise route, Gaurav underscores the courage required to run an organic business franchise. This is especially true given the anticipated low volumes in organic food retailing, which contrasts with the emphasis on volume in the food and grocery trade.

Taking a TOW franchise requires an investment of approximately INR 20,00,000. This investment is sufficient to open franchise store in a 500 square foot space. Typically, the operational break-even period for franchisees ranges from 3 to 6 months, contingent upon factors such as location and population density.

“Regarding our 4 franchised stores, we have observed positive developments from an operational perspective. Leveraging our scale, we have been able to strategically expand and source materials. This enables us to offer competitive pricing for fruits and vegetables that surpass what franchisees could obtain independently. By addressing these challenges at scale, we provide a significant advantage to our franchise owners,” avers Gaurav.

Plans for the Future

With a strategic vision to extend its retail presence beyond Bangalore to cities such as Hyderabad, Pune, and beyond, TOW has commenced its expansion plans in the short to medium term. Over the next 5 years, there are plans to launch a minimum of 100 stores. These stores will be strategically located in key cities, encompassing both Tier 1 and Tier 2 cities. “Moreover, we are committed to fostering entrepreneurship by engaging other individuals in this journey and empowering them to become entrepreneurs themselves. This initiative is a pivotal focus for us, and we are dedicated to its success, working diligently to realize this vision,” says Gaurav.

Asked if is considering any investors aside from the franchise model, or contemplating alternative funding methods for expansion, Gaurav says: “No, currently, our ownership structure is held and owned privately. However, as we progress and reach our milestone of one hundred stores, we will certainly entertain the possibility of involving investors.”

As per an IMARC study, the India vegan food market size reached US$ 1,324 Million in 2022. It is expected to reach US$ 2,463 Million by 2028, at a growth rate (CAGR) of 10.9% during 2023-2028. Tapping into this opportunity, TOW aims to get 10% of its total sales from the vegan category.

Speaking about the expansion, Gaurav says, “The decision to broaden TOW’s vegan product line is inspired by a growing interest among our customers. Initially, we expanded with fundamental products like tofu and chocolates and later extended our range to include more diverse offerings such as ice cream, bread, and beauty products. The rising popularity of the growing vegan market has led to the need for trusted vegan brands, which has significantly influenced and reinforced our commitment to this expansion so that we can serve our customers at every point in this journey.”

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About the Brand

The Chocolate Room started its brand journey in the year 2007. From the very beginning, the brand has shown continuous innovation in the chocolate cafe segment. TCR follows a franchise model to scale the brand pan-India. Today they have crossed more than 300 + chocolate cafes and spreading more cafes across the globe. 

The main branches are located in Ahmedabad, Hyderabad, Bangalore, Mumbai, Pune, Kolkata and Chennai. The brand has an average national monthly revenue of over INR 8 cr per month. 

Brand’s USP

The brand’s USP is its chocolate desserts and chocolate hot beverages namely Hot Chocolate. The Chocolate Room is a one-stop solution for all chocolate needs. The brand’s big strength is its customers. They have positioned themselves in the Indian market as a chocolate cafe since 2007. For the last 15 + years the brand has been gaining trust from 4 regions customers of the country. 

The brand takes pride in curating an exceptional team of skilled chocolatiers who are dedicated to achieving culinary excellence. These chocolatiers, driven by a passion for their craft, meticulously craft a range of exquisite delicacies that showcase not only their expertise but also a commitment to delivering an unparalleled chocolate experience. 

From artisanal chocolates to indulgent desserts, each creation is a testament to the skill and artistry of the culinary team. Through continuous innovation and a pursuit of perfection, the chocolatiers elevate the chocolate-savoring experience, ensuring that every bite is a symphony of flavors and textures that captivates the senses.

Brand’s Vision

The brand aspires to secure a coveted position among the top chocolate-serving cafes. TCR has a clear and compelling vision that revolves around delivering excellence in both product quality and the immersive experience offered by its chocolate cafes, which stand as foundational pillars for its success.

Drawing insights from the observation of the local audience, TCR is committed to continuous innovation and development of new products finely tuned to the discerning preferences of the local palate, ensuring a dynamic and tailored approach to meet the unique tastes of the community they serve.

Future Plans

The brand envisions reaching a milestone of 500+ chocolate cafes, strategically extending its footprint to smaller cities across India. The brands aim to raise public funds and thus open more cafes in regional cities of the country. This expansion plan is not limited to merely serving delectable chocolates; rather, it encompasses a comprehensive offering that includes an array of chocolate-related beverages, desserts, and a curated selection of Western food items. It reflects the brand’s commitment to bringing exceptional chocolate experiences to a broader audience, enriching the culinary landscape in smaller cities with a diverse and enticing menu.

The post Brand Profile: The Chocolate Room brings unique chocolate cafes to India appeared first on Business of Food.