Over the next 18 months, Mumbai-based patisserie Theobroma, aims to grow its store network from 16 to 28 and also grow its gifting vertical
I vividly remember my first experience at Mumbai’s Theobroma; as I bit into a vodka chilli cheesecake, I was convinced this must indeed be the food of gods, as the patisserie’s name suggests. In its effort to introduce Mumbai to flavoursome, quality conscious baked goods, Theobroma has won over a mass audience, from college goers to homemakers alike. Established in 2004 by Kainaz Messman in Colaba’s Cusrow Baug, Theobroma took its time to understand the food retail business and opened its second outlet only in 2009. Today, the patisserie chain has over 16 outlets, including three in the New Delhi-NCR region.
One of the factors leading to Theobroma’s success has been the professionalising of its management. As I chat with CEO and co-owner, Cyrus Shroff, he explains how his coming on board in 2013 has helped the company get more disciplined in operations and open its doors to PE investors. “We are readying for the growth phase and given my past experience in venture capital, I was able to bridge communication between us and PE firms,” explains Shroff. For homegrown Theobroma, its resonance in the community of consumers is a standout factor and this credibility will certainly help the company gain a foothold in new geographies. Shroff shares that with a round of investment (details remain undisclosed), the company is looking to grow to 28 outlets across Mumbai, New Delhi-NCR and Pune, over the span of the next 18 months.
Slow and steady wins
Since its inception, Theobroma has moved at a calibrated pace, and the company grew on the basis of internal accruals as profits were ploughed back into the business. Given the labour intensive nature of food retail, it relied heavily on manual labour. This is also an industry where churn is high and loyalty is tough to come by. A few years in, the company managed to invest in automation through machines that divide dough and ensure even baking, eliminating some of the need for manual intervention. Investing in technology to integrate its front-end with its back-end has also helped Theobroma reduce wastage, improve cost efficiencies and better communication between channel partners.
The company has also addressed the problem of labour by introducing differences in its incentives. “The industry works on a fixed incentive plan, we revolutionised this by entering reward mechanisms including spot awards, performance linked bonus, brought in variability in incentive pay outs and all of these lead to lower attrition rates,” says Shroff.
We have a commissary for each city and stock only fresh, quality ingredients. If a quality option is unavailable, we pull the items that require that ingredient from our menu.
In the finer details
One of the effective ways the company has managed to generate revenue is to sweat each of its locations. “We choose our locations carefully and pick places with a high footfall on high streets,” says Shroff. Interestingly, top management makes surprise visits to each location, to ensure there is an upkeep of quality. There is also serious emphasis on training and rotation of staff between its various locations in a city. “We have a commissary for each city and stock only fresh, quality ingredients. If a quality option is unavailable, we pull the items that require that ingredient from our menu,” shares Shroff.
This process of constant monitoring and assessment is one of the reasons Theobroma has preferred to open self-owned stores as opposed to inviting franchisees to build its store network.
The road ahead
In addition to launching more stores and entering other cities, it will grow its gifting vertical, which at the moment, comprises only a fraction of its business. Through this vertical, Theobroma has worked with high-end brands such as Dior to customise gifting options. “India has a vast gifting culture and we will look to grow this business in such a manner that it brings in at least 10 per cent of our overall revenue,” says Shroff.
In taking business to the next level, Theobroma still depends on word-of-mouth and the company is unlikely to invest heavily in marketing initiatives. “We have some presence on social media and will look to leverage that but our focus will always remain on enhancing customer experience at our stores as that is the best way to communicate with them,” adds Shroff. As the interview draws to a close, I ask Shroff where he sees brand Theobroma over the next two years and his response is crystal; focus on maximising production capacity and focus on increasing footprint.
Snapshot: Theobroma Foods Pvt. Ltd.
Founder: Kainaz Messman
Industry: Patisserie chain, food retail