Wake up and Smell the Coffee
Bonhomia understood the first mover advantage when they launched their coffee capsules and later machines in the Indian market. Since their launch in 2012, they have seen phenomenal growth and are looking at a strong expansion plan for both retail as well as hospitality.
(L to R) Kunal Bhagat, co-founder and CEO of Bonhomia with his fellow co-founder and CMO, Tuhin Jain,
KUNAL BHAGAT, the co-founder and CEO of Bonhomia, understands the importance of being a first mover. “I realised if I start something like this (single serve coffee capsules) in India, I would be ahead of the curve. In this sector it's better to be ahead of the curve because companies which started first, end up dominating the sector and continue to be relevant even decades down the line,” he told us.
And so, Bhagat packed his bags and moved to India, to set up the company in 2012 with Rs 1 crore in funding raised from himself and some of his friends in INSEAD. “When initial funding didn't come through, what I decided was that I was going to take time off from my corporate gig and work with my hands for a year and build the production line myself. I hired a couple of mechanics over eight to night months built everything ground up,” he recalled.
Tuhin Jain, the other co founder and CMO came on board a little later. “When we knew we could put a product on the shelves, I needed to have the right kind of team around me so I went looking for people. One of the persons that everyone pointed me to, who is really good in beverage and FMCG etc. I was then given the contact of Tuhin (Jain),” Bhagat added
While Tuhin was aware of this, he hadn't spent enough time in Europe to understand how big a phenomena single serve coffee was. So he was interested but cautious about the whole thing.
Since the product hit the shelves things have been moving at a phenomenal pace, both Bhagat and Jain confessed.
“We began with capsules and introduced the machines last year. The response has been phenomenal. We are open format which will remain the mainstay of our brand. We have a good twelve blends now, with parity with international costing. It's around a INR 40 cup of coffee,” Jain began by explaining the product.
As far as funding was concerned, since raising the initial money in 2012, they saw two more rounds in 2015 and two more in 2016, though Jain was unwilling to share the valuation of his company.
As far as growth is concerned, “since the machines has been launched in 2015, the growth has been 10X. Let's just put it like this. For chains like Homestop or Croma for that matter, their consumer appliances category is typically shrinking. We are one of the few brands growing at triple digit for them,” Jain said.
“If you see the Indian hospitality landscape, we are a little behind the rest in certain aspects, but I think we are reaching there, given that the clientele itself is changing. If I take a step back and look at how the world has changed. It's more self-service, the kind of formats being used, the facilities offered to guests--who don't want to be dependent on the hotel staff all the time,” he said.
India is clearly showing a growth in consumption of coffee. The youth as well as the well-travelled Indian are both becoming more discerning about what they consume--in both food as well as beverage, Jain added.
“The hospitality sector in general has also evolved to recognise this. Everyone is bringing their hotel properties up to international standards, bringing in new concepts and cuisines into the country.
India is among the top five producer of coffee in the world. Every large player you can think of contains Indian coffee which is exported, repackaged and sold back to us at a premium,” he rued.
“Once the product was launched, we were approached on day 7 itself by the Oberoi Group who wanted us to give a demo. They went through a four or five month period of intense tasting sessions before getting our products,” he proudly stated.
“We began with capsules and introduced the machines in 2015. The response has been phenomenal. We are open format which will remain the mainstay of our brand. We have a good twelve blends now, with parity with international costing. It's around a INR 40 cup of coffee,” Jain clarified.
Since the machines have been launched, the growth has been 10 times, Jain said, adding that in stores like Homestop and Croma, which have been seeing shrinking sales in their consumer appliances, Bonhomia products have been seeing triple digit growth.
“We are now working on a very strong expansion plan with all these retailers now,” he said in conclusion.
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