Chaayos looks to premiumise its offerings with trials at select outlets

livemint.com:

Mint in an exclusive interview. The company has been conducting trials at select cafes, such as adding new items to the menu, improving food and beverage presentation, and polishing cafe design and infrastructure, Chaayos's finance chief Pranav Dahiya said. It has also begun serving drinks in ceramic cups instead of the usual paper cups at Delhi's Cyber Hub cafe as a part of its premiumisation efforts.

These efforts to upgrade the customer experience make a good case for Chaayos to charge a premium, said Ankur Bisen, head of retail at India's Technopak Advisors. This comes at a time when larger cafe chains such Starbucks, Blue Tokai Coffee and Third Wave Coffee Roasters are in fierce competition to win a bigger share of India's tea and coffee market. Brands like Chai Point and Chaayos have an average order value (AOV) of ₹170, compared to ₹250 for Starbucks.

Blue Tokai and Third Wave Coffee, which brew more artisanal varieties, may have an even higher AOV (about ₹300) as they have fewer outlets than Starbucks, Bisen said. Chaayos, which operates under parent company Sunshine Teahouse Pvt Ltd, serves a variety of tea, snacks and other beverages. It gets about 35-40% of its revenue through aggregators such as Swiggy and Zomato.

Last week it expanded its offerings to include cold drinks such as Mixed Berry Smoothie, Choco Peanut Smoothie and Mango Icy Slush. "Our new cold menu just went live in Mumbai and Bengaluru and will soon go live in NCR as well. This year our cold product launch comprises an extensive range of beverages made from fresh and natural ingredients for the upcoming summer," said Dahiya, adding that the company plans to execute three new launches every year.