Australian cafe chain Gloria Jean’s Coffees, which forayed into the Indian market through the Dubai headquartered Landmark group’s hospitality
arm Citymax in 2008, has grown at 23% year-on-year. With 917 cafes globally, the chain expects to brew its way into the Indian market with 100 stores by 2013. Gloria Jean’s Coffees regional general manager Tony White speaks about its lessons from this market and how it is using India as the node to serve countries from Africa to the subcontinent. Excerpts:
Where does Gloria Jean’s position itself and what has been experience like since its 2008 entry? Gloria Jean’s operates at around 10% premium over the two main cafe players in India, offering 100% arabica beans. Although we position ourselves at the upper end of the mainstream cafe market, we do not want to operate at the price points of international players as it would prevent us from achieving scale. We have grown to a presence of nine stores across Mumbai, Bangalore, Hyderabad and Chennai. Gloria Jean’s India broke even at the retail level two months back and is targeting company-level profitability by 2012. By then the Citymax would have 40 stores in place.
Is there a possibility that your tie up with master franchisee Citymax be extended to subfranchised growth? Sub-franchising is definitely an option to grow. But we will look at branching out into sub franchisees only once we reach a 50 store presence. Although most of our outlets are franchised in Australia, it is usually owned by a couples for whom it is a means of livelihood. They’ve got their skin in the business and are focused on driving sales. But in India, the franchisee does not necessarily run the business. Although we may train him, a lot of factors may get lost in translation when he reaches out to the staff. Consistency of experience is essential to not dilute the brand.
  Tony White, regional general manager, Gloria Jean's Coffees |
Where does Gloria Jean’s position itself and what has been experience like since its 2008 entry? Gloria Jean’s operates at around 10% premium over the two main cafe players in India, offering 100% arabica beans. Although we position ourselves at the upper end of the mainstream cafe market, we do not want to operate at the price points of international players as it would prevent us from achieving scale. We have grown to a presence of nine stores across Mumbai, Bangalore, Hyderabad and Chennai. Gloria Jean’s India broke even at the retail level two months back and is targeting company-level profitability by 2012. By then the Citymax would have 40 stores in place.
Is there a possibility that your tie up with master franchisee Citymax be extended to subfranchised growth? Sub-franchising is definitely an option to grow. But we will look at branching out into sub franchisees only once we reach a 50 store presence. Although most of our outlets are franchised in Australia, it is usually owned by a couples for whom it is a means of livelihood. They’ve got their skin in the business and are focused on driving sales. But in India, the franchisee does not necessarily run the business. Although we may train him, a lot of factors may get lost in translation when he reaches out to the staff. Consistency of experience is essential to not dilute the brand.
What is the progress on your roasting facility in Bangalore on stream? We have a long term commitment to this market and are setting up a roaster with a capacity to manufacture up to 12,000 cups per batch by the calendar year end. Being situated in the city, the fresh beans can be easily distributed to our outlets which are largely metro specific. Import tariffs have forced us to source locally and this facility is expected to become a hub for Asia. It will also allow us export to 11 countries across the subcontinent, Middle East and Africa, which were earlier importing beans from Australia. By 2012, 80% of the in house production will serve India while the remainder will be exported.
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