The 'Chai Sutta bar' story

Valued at over 150 crores INR with 7 years of operations, spread over 550+ outlets in 320+ cities across multiple countries.

Now that I have your attention, we are talking about the growth of Chai Sutta Bar and the lessons we have learnt.

To give credit;

Chai Sutta Bar owns the category.

As a brand it has become synonymous with chai; as is Bisleri with water and Coke with cola; and that is truly remarkable.

Considerably, this is an extraordinary development not just because of the number of outlets it has now but more so that the brand has managed to sustain the momentum as well as quality of its product deliverance.

And they have now venture into retail sale of tea leaves 'maatea', which is opening up another revenue stream.

Let’s dive; point by point.

Lesson 1: Product

Be relatable to and for your Customers. Avoid tongue twisters and mind numbing products and names. Now I am not saying NO to innovation, you must do that, but make it palatable for your customer.

Case-in-point 1: Chai Sutta Bar has the most basic of the product - Chai; which we all drink rather compulsively and out of habit. Every menu addition other than chai, is simple and easy for the customer to relate to.

Lesson 2: Operations

Make sure your business model is easy to operate. Most of the time, we tend to complicate the processes for no apparent reason.

Case-in-point 2: The chai business is easy and simple to operate; with manageable inventories and stores. There is no overload of recipe standards on the operator and a certain independence to variability.

Lesson 3: Sale Returns

Your business has to be able to provide reasonable capital and profit returns for the people who invest in; the question is not how much but it is of ‘how consistently’. Never overpromise.

Case-in-point 3: With Chai Sutta Bar, there is an apparent assurance of reasonable daily sales and decent margin-returns, if not exponential. You really have to be quite a bad decision maker to fail in the chai business.

Lesson 4: Design

Your brand is represented through your business model in terms of ambience and design, the menu and the unique propositions, which make it a brand in the first place. The key is to develop Standards and stay with them and yet have room for some moderation, for markets and demands.

Case-in-point 4: The ambience design and the menu of Chai Sutta Bar are pure convenience. Of course, some do go overboard in the design part, which is okay if it does not alter the primary theme.

Lesson 5: Team & Skills

Team member skills level should match your product and experience offerings.Your business should neither have overqualified nor under-qualified staff members; just the right mix.

Case-in-point 5: To operate a Chai Sutta Bar business, one would require low to medium skilled team members. Of course, that’s because it is a simple business model (strength), the dishes are easy to prepare and distribute and have minimal experience requirements for customers. And the labour costs remain manageable.

Lesson 6: Growth

Grow your business with a consistent strength and speed; don’t over-spread the process just because now suddenly there are more admirers. Patience and Perseverance.

Case-in-point 6: Chai Sutta bar has grown very consistently over time, quietly and with a certain speed. Of course, they also have increased their fee over time which is appreciative from a business point of view.

Lesson 7: Control

When working with someone, it makes good sense to allow most operational decisions onto your partners/associates while keeping the few critically important ones within your premise to control, decide and implement.

Case-in-point 7: One reason Chai Sutta Bar has gained so much traction is because it encourages people to become entrepreneurs and take control of the outlet, as the owner. There’s not many interventions or disruptions.

Summarily; these points are a summary of what makes a brand work and be acceptable, and yet they are not the principles carved in stone. I have always insisted that every brand has a face of its own and you just cannot copy someone else and make it work. Never happens.

Yet these are good reference points; if and when you decide for your business to become a Brand.