đ§ RIL v/s Tata: A Battle Over Coffee?
RIL and Tata are gearing up for yet another battle. Why? ReadOn!
Mr. Mukesh Ambani is rightly referred to as "The disruptor of industries and the protector of middle-class pockets".
After all, weâve got to give him credit for Jio, free IPL viewing, cheaper groceries with Independence and now Campa Cola.
Looks like Mr. Ambani is going big on food and beverages.Â
His next foray is into cafés.
Yes, Reliance Brands Ltd. has partnered with the British cafe chain, Pret A Manger. The first café is already open at the Bandra Kurla Complex in Mumbai.
This meansâŠ
*drumroll*
War with Tataâs Starbucks!
Letâs see what RIL has in mind, and what it means for Tata.
ReadOn.
â Much Ado Over Coffee
If Ambani is entering an industry, you can be sure of one thing:
The industry has HUGE potential.Â
India's cafĂ© chain market is expected to reach Rs. 4,540 crores by 2023!Â
But, why exactly is this space booming?
Gen Z and Millennials just canât do without coffee. Our coffee consumption rate is now growing by 5% since the 2000s. Global consumption has only grown by 2%.Â
Cafés are no longer just places to chill. Cafes in Bengaluru are real-life LinkedIn setups! Networking, interviews and even investor meetings are being held in cafes!
Plus, as our disposable income is now growing, people are choosing to spend on small luxuries and experiences.Â
Yep, typical YOLO mindset! Â
Letting you in on a secret: this is exactly why Starbucks has taken off in India.Â
And this is RILâs strategy with Pret A Manger.
Pret is also positioned as a semi-premium coffee chain.
It has organic coffee, organic fruits, fancy salads and breakfast items: all youâd buy for a nice Sunday treat.
Now, now.
While Indiaâs cafe space is lucrative, it is equally competitive.Â
Lots of international chains have tried to crack the market, but most have failed to make a big dent.Â
Like Coffee Bean & Tea Leaf, Gloria Jean's Coffee.
Never heard of them? Exactly.
The ones that are popular (like Third Wave Coffee, Roastery, Blue Tokai, CCD) are kinda struggling.
Things were so bad for CCD that it went from being Indiaâs favourite cafe to brewing a Rs. 3,535 Crore fraud (you can read more about the fraud here)!
Now, what does RIL have in store to make Pret A Manger big in India?
âïž RIL v/s Tata
Well, itâs not going to be easy.
First, there's the super strong competition from Starbucks. Not only is Starbucks super popular, it also has 268 stores in India already.Â
Second, this space has historically been unprofitable. Even Starbucks saw losses of Rs. 95 crores in FY22!Â
Third, running a cafe is no childâs play.
There are many moving parts to this game: finding land for expansion, managing the supply chain of outlets, and whatnot.
But but butâŠÂ
RIL is kind of like Sonpari.Â
It can make "mumkin ko namumkin and namumkin ko mumkin" (make what is possible impossible and what is impossible possible; only the OGs will get this reference).Â
Being one of the biggest conglomerates in India, it has a HUGE retail chain network.Â
So, tackling these problems could very well be a cakewalk for Mr. Ambani.
Plus, the timing could be an added benefit for RIL.
Apple just opened its first-ever Apple-owned store in BKC where Pret A Manger is, and people are going bonkers to see it!Â
So, Pret A Manger could see increased footfall.Â
But will this be enough to ensure RIL's success? Will it be able to end Starbucks' supremacy and disrupt yet another space?Â
We had some interesting comments about how RIL is burning money by entering every sector.Â
However, as a user very insightfully pointed out, Ambani could be expanding his empire to make sure that his children and their children have lots to divide amongst themselves.Â
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Little more colour on why few of the mentioned cafes failed/ are struggling would have been helpful
reliance sab mai king nahi ban sakta bakiyo mai average hi rahega