How Chai Sutta Bar Made ₹150 Crore Selling Chai?

Introduction

Chai Sutta Bar, a chai-based QSR chain, has achieved phenomenal success, generating a turnover of 150 crore rupees. Learn about their inspiring journey and strategies for success.

The Founding of Chai Sutabar

• Anubal Dube and his co-founder Anand Nayak built Chai Sutabar, a 500+ location QSR chain, by leveraging India’s national beverage - chai.

• Chai has been a part of Indian lifestyle for Millennia, even before the British introduced black tea to India in the 1830s.

• Chai Sutabar rapidly expanded from a single location in Indore to over 500 locations in 300+ cities, with a global presence in Dubai and upcoming locations in Canada, the UK, and the United States.

• Their cumulative turnover now totals 150 crore rupees, and they aspire to open a franchise in every country on Earth.

• Anubal and Anand drew inspiration from big F&B giants like McDonald’s, Starbucks, and Domino’s, and chose to sell chai as they believed it had a better success ratio than other domains they pursued before.

Starting a Business with Limited Resources

• Starting the business was a swift decision, without a detailed plan. They started with three lakh rupees after the bifurcation of the business without informing Ann’s father

• The decision to defy expectations and pursue entrepreneurship was met with fear, but also understanding that they needed to step out of their comfort zone

• The initial struggle of finding a suitable location and the financial constraints led to creative solutions like using a wooden board with hand-painted signage as a branding tactic

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• They strategically targeted locations near girls’ hostels to attract more customers, and this approach proved successful

• Their determination and risk-taking attitude led to the successful establishment of their first location despite financial challenges

• The strategy of choosing locations near girls’ hostels helped attract a larger customer base

• Despite facing financial challenges, they creatively marketed their brand and strategically targeted customer demographics for business growth

Expansion and Franchise Model

• Initially, the founders did not have a detailed financial strategy, and they were not using any management software to track sales and customer data. However, as they transitioned to a franchise model, expansion became easier through referrals and the asset-light nature of the model. Customer referrals played a significant role in their expansion, especially in the Indian market where trust is crucial.

• While inexperienced in franchising, they did encounter some instances where franchisees took advantage of their brand and changed the business to their own name after getting the franchise. However, the founders decided to focus on learning from their mistakes and let karma deal with those who took advantage of them.

• The decision to expand to Mumbai was largely driven by a family that visited their shop in Indore and expressed interest in opening a franchise in Mumbai. Despite initial concerns about the competitive nature of the Mumbai market, they found success with long queues and strong customer interest, attributing it to the quality, competitive pricing, and the vibe of their product.

• The founders employed a word-of-mouth marketing strategy, even resorting to talking loudly about their product in public spaces to generate interest. While unconventional, they believe that this technique may have contributed to their brand’s visibility and customer interest.

Expanding to Dubai and Overcoming Operational Challenges

• The speaker’s company decided to expand to Dubai, a significant move outside of India.

• They faced operational complexities in Dubai, including stringent regulations from the Food and Drug Association of America (FDA), different hygienic standards, and the need for government-approved employee training.

• The speaker highlighted the difficulty in meeting Dubai’s standards, such as using specific colored knives and knee-operated handwashing tabs, and the risk of being blacklisted for non-compliance.

• Despite the challenges, the company successfully launched three outlets in Dubai by January 2020, with plans for a fourth.

Chai Sutta Bar’s Journey: From Pandemic Crisis to Global Expansion

• Chai Sutta Bar, a premium Indian tea brand, faced significant challenges during the 2020 pandemic. With all the shops closed due to the risk of cross-contamination, they had to deal with expired perishable food and the need to switch to digital operations.

• Despite the challenges, Chai Sutta Bar made a remarkable transition by focusing on self-branding and leveraging social media. Their YouTube channel subscribers increased from 26k to 2.6 lakh, and their Instagram following also grew substantially. This shift to personal branding helped them connect with their audience more effectively than traditional branding strategies.

• Anu Dube, the co-founder, shared that although he initially struggled with stage fear and was hesitant to appear on camera, he found it easier to share his story and connect with people as the face of the brand. This personal touch contributed to their growing success.

• Chai Sutta Bar’s expansion plans extend beyond India, with three locations in Dubai and licenses sold for franchises in the US, the UK, Canada, and Oman. Anu Dube emphasized the need for Indian entrepreneurs to aim for global competitiveness, as India is positioning itself as a major global player.

• Looking ahead, Chai Sutta Bar aims to set up 1500 stores, a significant jump from their current 500 stores across 300 cities. They prioritize sustainability and recognize the need for thorough market research and adaptation to local cultures and tastes in each new location.

• Anu Dube’s commitment to building and growing the brand in India reflects a broader trend where successful Indian entrepreneurs are choosing to remain in India and contribute to the country’s economic growth, rather than pursuing opportunities abroad.

Conclusion

Chai Sutta Bar’s impressive growth from a single location to a global presence, overcoming challenges, and their vision for future expansion showcases the power of determination and innovation in the F&B industry.

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