Jaipuria, 63, who spent his early years in Canada, owns one of the largest bottling franchisees of PepsiCo Inc. For the past 27 years, he has been working with the American food and beverage maker primarily in India, and lately in Sri Lanka, Mozambique, Zambia and Morocco.
While most of his holding company RJ Corp.’s estimated $2 billion revenue still comes from the bottling business, Jaipuria has, in recent years, spread his wings to fast food, dairy, schools, real estate and healthcare.
As a master franchisee for Singaporean luxury tea brand TWG Tea in India and UK, Jaipuria will enter the UK market with TWG Tea Salons and Boutique, a chain that serves luxury tea, dessert and snacks, besides selling tea leaves in packets and tea accessories.
TWG sells about 1,000 variants of tea—both single estate and blends—priced between $6 to $2,000 for 50 grams. The company sources tea directly from growers across 45 countries. TWG Tea products are also sold at retailers such as Harrods in London and Dean & DeLuca in New York.
“We are opening the first outlet in April in Leicestershire, followed by another in Brompton Street (London). In the first phase, spanning over six to 12 months, we’ll be spending around Rs100 crore only in the UK. The tea market is really big in UK. London alone can house at least 10 TWG outlets, before we start spreading wings across other parts of the UK," Jaipuria said, adding that the company hopes to generate revenue of £100 million from the TWG Tea business in the UK.
Consumption of tea in the UK declined by 18.8% to 89.7 thousand tonnes in 2016 from 110.6 thousand tonnes in 2002, according to a study by market research firm Euromonitor International, published on 15 August 2017.
In India, Jaipuria wants to “go slow" with TWG Tea.
“Luxury tea market in India is limited. It can be a very good gifting option. But, it is too early to predict anything. We’re starting with New Delhi, and will slowly have outlets in other major Indian cities, besides the airports," he added.
At present, the company has two TWG Tea outlets—at the Oberoi hotel in New Delhi and the luxury shopping mall DLF Emporio—for retail sales.
Jaipuria said he will not open a TWG Tea Salon and Boutique in India as he believes “the market is not ready". By the end of 2018, he will have an outlet at New Delhi airport, two stores in Mumbai and one in Kolkata with an estimated spend of Rs10 crore.
Besides the TWG Tea outlets, the company will also supply to all luxury hotels in the UK and India.
“India is an exceptional tea producing country and we have been sourcing directly from the tea estates here. India is a market we can’t leave, and finally we got the right partner to establish our presence here as we celebrate our 10th anniversary," said Taha Bouqdib, co-founder, president and chief executive officer, TWG Tea.
TWG Tea currently has a presence across 16 countries with 70 stores and is preparing to enter the US market on its own. “UK is the only big market we agreed to enter with a partner. In all big markets, we do business on our own. Over the next six to seven years, we aim to be present across all major cities in the world, with about 15 new outlets each year," said Bouqdib.
Devyani International IPO
Jaipuria said RJ Corp. is preparing to take Devyani International Pvt. Ltd, the master franchisee for several global fast food brands in India, to the market next year. While Jaipuria is yet to finalise the size of the initial public offering (IPO), he said: “It would be something like the IPO of Varun Beverages Ltd."
Varun Beverages, the bottling entity of RJ Corp., in October 2016 raised Rs1,112.50 crore through an IPO.
Devyani International, the master franchisee for Pizza Hut, KFC, Costa Coffee, and a few other brands, also operates restaurants under brands such as Vaango and Foodie’s Bar. It accounts for 7-8% of RJ Corp.’s revenue.
“To scale up, Devyani will operate 8-10 brands. Over the next couple of years, we will add 250-300 new stores across brands. This will require huge investment. Initially, we’ll fund from internal accruals, and then tap the market," Jaipuria said.
He is focusing on the fast food business as his plans for dairy and convenience retail (J-Mart) are on the back burner. “Both dairy and retail will take time to shape up," he added.
But his dream of making RJ Corp. a $5 billion firm by 2020 can’t wait. “We’ll cross that faster than targeted," Jaipuria said, adding that growth of RJ Corp.’s Varun Beverages is on track.
Last month, Varun Beverages got the distribution rights for PepsiCo India’s non-carbonated beverage brands Tropicana, Lipton tea, Gatorade and Quaker Oats. During the past three months, Varun Beverages has acquired bottling units and franchisee rights in five more states. It now has the franchise for PepsiCo products across 20 states and two Union territories in India.
“We are always open for more. But PepsiCo has to decide," added Jaipuria.