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“We are farm-to-cup in the truest sense”: How Blue Tokai Coffee Roasters has carved a niche for itself in a niche (but growing) space

Business Insider 2018-04-16 12:00:00

Before Rhea Sanghi joined Blue Tokai

Coffee

Roasters as its Community Manager in October 2015, she had never been much of a coffee drinker. Now, coffee is such a deeply-ingrained part of her life that it’s hard for her to imagine how she lived without it, she confesses.

In a similar vein,

Blue Tokai

aims to give India’s coffee drinkers, traditionally used to instant coffee or the likes of Barista and Cafe Coffee Day, a transformative experience with its specialty blends. The idea for Blue Tokai took root in the minds of the co-founders, Matt Chittaranjan and Namrata Asthana, when they moved from Chennai to Delhi in 2012 and found themselves out of options for fresh and accessible specialty coffee.

It all started with some farm visits

Matt and Namrata visited a number of coffee estates in southern India, mainly in Karnataka, with the end goal of sourcing beans for the domestic retail market. Rhea says that the farmers scoffed at the couple upon hearing this. They said that there wasn’t a market for specialty coffee in India.

Before Blue Tokai and other specialty coffee brands came along, these coffee farmers mainly exported their produce. India ranks among the largest producers of coffee in the world, but exports around 70% of its beans to the other countries, most notably Italy and Australia. The high quality blends were exported, while the cheaper, less flavourful beans were meant for instant coffee.

Matt and Namrata invested in a roaster and began sourcing the beans directly from the farmers. After roasting the beans, they would sell the roasted beans to customers through online channels. Slowly but surely, the company helped drive a paradigm shift in India’s coffee

culture

by introducing people to its single-estate Arabica coffees. “This is how Blue Tokai demonstrated innovation,” Rhea laughs, “by giving people good coffee that didn’t burn their tongues and tasted naturally sweet instead of bitter.”


Changing tastes

The company wasn’t alone. Blue Tokai started operations as Starbucks was ramping up its presence in India through a joint venture with Tata- an indicator that Indian consumers were ready for change. “In the last few years, specialty coffee has become the go-to choice for a specific kind of Indian,” Rhea says, “the upwardly mobile metro-dwellers who are used to a certain lifestyle. They’re looking to curate their world with good brands and are willing to travel lengths to get their daily dose of caffeine, even though they don’t necessarily have to.”

In around five years, Starbucks’ has already reached a 100 outlets in India, buoyed by an aspirational urban middle class that is looking to sip local brews while working at cafes. Apart of raising consumer awareness, Starbucks’ growth has demonstrated that the coffee market is taking off in India, and that there is room for other brands. In addition to Blue Tokai, a number of homegrown coffee brands have sprung up in the last few years - Bangalore’s Flying Squirrel and Third Wave Coffee, Goa’s Sussegado and Mumbai’s The Indian Bean - all of which have looked to plug the market gap with their domestically sourced, specialty blends. Even though they’re all vying for shelf space in retail stores, selling wholesale to restaurants and experimenting with the cafe model, their national reach is made possible through e-commerce.


The end result? Indian consumers are spoilt for choice.

Blue Tokai’s retail customer base mostly comprises people between the ages of 27 and 35 who are more aware of their choices and what they’re consuming. When asked what sets Blue Tokai’s customers apart from those of big chains, Rhea quips, “Our customers are people who know the difference between good coffee and great coffee.”

Rhea joined Blue Tokai just as it was launching its first cafe, which was attached to its roastery in Delhi’s Saiyad Ul Ajaib area. In her first few months, she was privy to the roastery’s escalation to a full-service cafe. “With each day came more customer feedback to act on, more staff to train and more additions to the menu.” She was also charged with leading the company’s social media strategy and building a community through events like brewing classes.


“Why the cafe?” I ask Rhea.

The idea was to have an espresso bar where prospective customers could taste their coffee before purchasing a particular blend of roasted beans. Blue Tokai was primarily in the business of online sales before launching the cafe. However, Matt and Namrata soon realised that no one in the market was offering good, freshly-brewed coffee for direct purchase.

“We started selling cortados, flat whites and pour overs,” Rhea says, “and once that took off, people said that they wanted food options, WiFi and power outlets.”


Caffeine-induced growth

The company’s growth is impressive.There were around 15 to 20 employees at the company when she joined. There are now 140.

I’m talking to Rhea in Blue Tokai’s fifth cafe, at Gurgaon’s Bristol Chowk. They currently have seven outlets, spread across Bombay and Delhi, with an eighth one slated to open in Panjim, Goa by the third week of April. “We never intend to go the franchising route,” Rhea explains, “all our cafes will be owned and operated by us so we can maintain our quality”.


Rhea is currently Blue Tokai’s head of marketing and partnerships. Her role covers all three facets of Blue Tokai’s business: the online retail segment, the wholesale segment, which involves supply arrangements with 400 partners such as restaurants, hotels and corporates, and finally, the cafes.

She has more than a few things on her plate at the moment. She’s building a team to handle cafe operations and customer service on a zonal basis. She’s working to streamline Blue Tokai’s social media presence. She’s growing the B2B sales program. She’s tying up with partners for a range of events such as India Art Fair, Magnetic Fields and Design ID. She’s onboarding more food partners to strengthen the menu at Blue Tokai’s cafes. She’s also working with smaller food and beverage brands on cross-promotion opportunities and pop-ups.

It seems that this emphasis on community has paid off. “We have amazingly loyal customers,” Rhea says. “We try to be as approachable as possible, which helps us get a lot of constructive feedback from customers.”


“What else sets Blue Tokai apart?” I ask her. It’s the kind of ingratiating question so common in interviews with company insiders, one that invariably unlocks a number of empty buzzwords and feel-good catchphrases.

But Rhea doesn’t disappoint: “We are farm-to-cup in the truest sense.”

The company’s purpose, from the very beginning, was to cut out the middleman and give its coffee farmers the credit they deserve. Most coffee chains or distributors buy their coffee through a series of intermediaries and sell their products weeks after the beans have been roasted. Blue Tokai sources the beans from 11 estates, as detailed on its website, roasts them at least a few times a week and sells them directly in cafes or ships them within one or two days.


Rhea also alludes to the company’s emphasis on transparency. “Everything we do is very consciously done. All our products go out with a roast date and the details of the estate that it was sourced from. Our roasteries in Bombay and Delhi are open to the public so they get a first-hand insight into the roasting process.”

We’re nearing the end of our interview. I ask Rhea about Blue Tokai’s plans for the short-to-medium term.

“We want to make our coffee more accessible,” she says, “ the idea is to open more cafes and be in as many places as possible.” In addition to Panjim, the company is considering expanding into other Tier-2 cities. “People in places like Jaipur and Surat drink A LOT of coffee,” Rhea explains. Blue Tokai is also planning to expand its product slate. “We’re looking to sell brewed coffee through retail channels - bottled, cold brew and nitro, mainly. The market for preserved, ready-to-drink coffee has a lot of potential.”


Rhea needs to get back to work, her phone has been ringing incessantly over the past hour. I conclude with one last question. “Has your experience at Blue Tokai made you confident about starting your own company one day?”

“Yes” she replies almost immediately. She laughs as she gets up. “It’s hard to imagine how it wouldn’t be coffee-related, though.”