In a country increasingly obsessed with cappuccino and mochaccino, two IITians and friends have made a serious business out of India’s popular hot beverage, tea. Raghav Verma and Nitin Saluja knew that while everyone in this country drinks tea, it wasn’t a beverage over which people bonded anymore.
No charcha over chai ?
“Unlike the past, where chai addas were places for people to discuss politics, society and life, tea had become a drink only to be savoured at home. This heritage of chai addas was lost, and multinational coffee chains took over. Our venture, Chaayos, is a contemporary interpretation of the chai adda , serving fresh tea,” says co-founder Verma.
Chaayos started off as a tea kiosk in a corporate park format in November 2012. In less than four years, it expanded to 27 cafes in malls as well as upscale localities across Delhi, Mumbai, Noida and Gurgaon.
The tea chain’s USP is its customisation quotient. With an option of 12 add-ons, customers can ask for a brew in the flavour of their choice — ginger, tulsi , elaichi , cinnamon, mint, kali mirch and other ingredients. They can opt for Kadak (strong) or Paani Kum (light), besides variations in the use of milk, tea and sugar.
Chaayos’ crazy aam papad chai is milk-free Darjeeling tea, infused with dried mango.
Standardisation
Verma and Saluja were fully aware that to gain scale, tea-making had to be standardised. It is still an art, unlike mechanised coffee-making.
To achieve this, they decided that each employee at Chaayos will attend an industrial training and certification programme, followed by two weeks of in-store training. “After one month, they have to pass the certification exam,” he says.
This takes care of quality and consistency in the flavours — core aspects that retains customers.
Funding
Their idea found acceptance with investors. In July 2014, the company raised ₹2 crore from Powai Ventures and ten months later, Tiger Global led a $5 million financing round in Chaayos. “Funding helped us get a good team in place and ramp up to a lot more locations. We have also used it to invest in technology and R&D,” he says.
But is not only tea that Chaayos sells. It also serves a wide range of snacks ranging from cookies and poha to bun maska and Sicilian chicken sandwich. And it is the company’s centralised hub-and-spoke model that is helping it scale up rapidly. “We have a central kitchen in every city we are present in, for daily supply to the outlets. We ready the ingredients like sandwich fillings at the kitchen. The final preparation is done at the outlets,” he points out.
“Procurement of ingredients is also done centrally from the best sources, like tulsi from Uttarakhand and cinnamon from Kerala. That helps maintain quality. People travel so much and cities are connected, so it helps to give a similar experience at all outlets,” says Verma.
The customer-centric strategies of Chaayos are already showing results. “We break even operationally around the fourth month at every outlet across formats and cities,” he points out.
With increasing demand, Chaayos has started offering home delivery service. “We deliver fresh chai in disposable kettles, which keep it hot for an hour-and-a-half. We have also got into bulk deals with some companies including Bank of America and Deloitte,” he says.
Tie-ups
But the feather in the cap is Chaayos’ tie-up with IRCTC. It supplies tea and snacks to customers at the New Delhi Railway station. To avail this, passengers have to order online or through a call two hours ahead of the train’s arrival time at the station. “The tie-up has given us a lot of visibility. We will expand to Mumbai by the end of this year,” Verma says.
Not just IRCTC, but SpiceJet too has tied up with this start-up, which has prepared an instant masala chai for the airline. “It has been getting a good response in the last three months, since we launched,” he says.
Instant teas will also soon be available at Chhayos outlets for customers, who want to prepare them at home or in office.
But the IIT-duo is not content with just this — Hyderabad, Pune and Bangalore are next on the list for expansion. “We will do it in the next one year,” Verma says.