If you want a cup of cappuccino or latte, you would have to shell out anything between Rs 200 and Rs 350, and sometimes even more. So, the general notion is that speciality coffee in India is an expensive proposition.
This is what Abhijeet Anand, an entrepreneur from IIT Dhanbad, wants to change with —a chain of tech-enabled outlets offering “affordable”, grab-and-go speciality-grade coffee.
In speciality grade coffees, the origin of the coffee beans can be traced to a single farm or plantation. Green coffee beans are said to be handpicked, uniform and defect-free. The cup score of these coffees is above 80 points (out of 100)—which is ascertained by qualified graders and experts, using criteria such as sweetness, acidity, body, flavour and aftertaste, laid down by the Specialty Coffee Association, an international organisation that monitors the quality and processes of speciality coffees around the world.
“abCoffee is solving the issue of the price point of speciality coffee through innovative tech-enabled coffee outlets (we call them coffee decks), serving one of India’s best-rated coffees at honest prices,” says Anand, Founder and CEO of Mumbai-based abCoffee, which was launched in June last year.
He claims abCoffee offers speciality coffees at one-third the price of coffee available at other speciality coffee chains in the country.
Keeping prices affordable
The price of cappuccino at abCoffee starts at Rs 97 (for 250 ml), while espresso is priced from Rs 77 (250 ml) onwards. The cold coffee is priced from Rs 107 (250 ml) onwards.
The startup’s approach is based on the QSR model, which helps maintain wastage at less than 1% and keep prices low, according to Anand.
“Our QSR decks are small. We focus on speciality-grade coffee and not on food. We bring differentiation in coffee. We also have designed our menu in such a way that many items use the same ingredients,” elaborates the 32-year-old entrepreneur, who had earlier worked in the oil and gas sector.
abCoffee has five coffee decks in Mumbai and it plans to open five more this month in the city. It serves classics such as espresso, flat white, mocha, and cappuccino and cold beverages such as iced Americano, frappuccino, iced latte, and Irish cold coffee.
abCoffee outlet in Mumbai
Tech-backed outlets with focus on quality
The startup has put in place a grab-and-go tech-enabled ordering system. Customers can walk into the QSR setup and use an NFC (near-field communication) touchpoint or scan the QR code to place an order.
The startup also uses a tech stack for customers to order on the go. Users can visit abcoffee.in, select a location, and place their order. They can then grab the coffee of their choice on their way, as they pass by the outlet. Orders can also be placed via the Swiggy and Zomato delivery apps.
Technology is also built into the frothing system to ensure consistency of the coffee in every cup, says Anand.
“Our automated temperature-control frothing system ensures quality remains consistent every time milk is frothed for each cup. This also helps eliminate or reduce manual errors that happen in frothing,” he says.
abCoffee sources coffee beans from farms in Chikkamagaluru, which are graded 85 on a 100-point scale by certified coffee tasters and licensed graders.
Anand says abCoffee’s ‘signature roasts’ cater to the Indian palate. “Extensive blend research and roast profiling of green coffee using state-of-art roasting machines have helped us develop signature roasts, which has made us reach and connect with the masses consuming espresso-based coffees and even people who are starting with coffee,” he says.
Quick turnaround time
The company strives to offer a hassle-free coffee takeaway experience built on efficiency and speed.
“We have optimised technology in our outlets in such a way that our TAT (turnaround time) from order to serving is only 1.5 minutes,” says Anand.
The TAT is maintained in three ways, says the entrepreneur.
- A Jikoda-inspired operational setup (a Japanese lean method): The espresso machine, other equipment (like the fridge), and elements such as ice, water, and syrups are placed in such a manner that any unnecessary movements are avoided and beverage preparation is made faster. “Think of it like the McDonald’s way, where there is a sequence of workflow for every order to be prepared,” says Anand.
- Superior barista training: The baristas are trained for fast hand movement, as per Standard Operating Procedure.
- A minimalistic set-up, which makes coffee preparation a quick clutter-free experience
Market opportunities and traction
The speciality coffee market in India was valued at $0.9 billion in 2022 and it is expected to reach $2.30 billion by 2030, at a CAGR of 12.5%. Players such as Blue Tokai, Starbucks, Third Wave Coffee, Café Coffee Day, and Barista Coffee Company operate in this space.
abCoffee says its differentiation lies in the fact that it operates a QSR model with a focus on takeaways, while most coffee players are in the café model.
The startup claims to have served over 28,000 cups of coffee in a span of eight months, with a customer retention rate of 69%. Anand says abCoffee’s annualised revenue run-rate is Rs 1.8 crore, and 80% of revenue comes from takeaways and deliveries.
While abCoffee does have space for customers to sit and enjoy their coffee, its outlets are smaller than cafés, with around 3-4 tables. “Our outlets are similar to McDonald’s drive-throughs or the Chai Point QSRs in corporate parks,” says Anand.
abCoffee had raised $300K in December last year from a group of angel investors and a VC firm. The startup is planning to raise another round in the next couple of months to expand across India. It aims to set up over 100 decks across the country this year—in Mumbai, Bengaluru, Delhi, Hyderabad, Gurugram, Pune, Chennai, Lucknow, Leh, Ahmedabad, and Indore.
