Private equity firm ICICI Venture Funds-backed patisserie Theobroma Foods Pvt. Ltd has set out on an aggressive expansion plan as it looks to multiply its sales fourfold over the next three to four years, two senior executives of the company said in an interview.
“We plan to grow our sales to ₹500 crore, the number of stores to 150 and our employee strength to 3,000 over the next three to four years. We are also looking to serve two million customers in that time," said Rishi Gour, chief executive officer, Theobroma.
Having started as a family-run café at Colaba in 2004, the Mumbai-based baker has grown to 50 stores with 1,000 employees across Mumbai, Delhi and Pune, and a topline of ₹120 crore, according to Kainaz Messman, the founder of the firm.
“When we started, there was no organized bakery firm in the market and it was either the high-end shops in five-star hotels or local bakery outlets. We tried to place ourselves somewhere in between and, today, while our core products are brownies, savouries and pastries, we are also focusing on other product lines such as snacks, breads, salads and drinks," she added.
The brand has a customer base of 500,000, of which nearly 85% are take-away customers, or orders online. The company operates across three store formats: Café, express and kiosks, offering over 200 items.
“Our brand has loyal customers and our repeat customers buy from us 3-5 times a month. Beyond our stores, we also ship our products across 25 cities in the country from our central kitchen in Mumbai," said Messman.
The company got its first private equity funding of ₹100 crore from ICICI Venture Funds in 2017. The funds were allocated in two equal tranches, of which the first tranche was used to expand the brand to Delhi-NCR, besides deepening its presence in Mumbai and Pune.
“The second tranche came recently and will be used to expand our presence in Bengaluru and Hyderabad. We will have a combination of express stores and cafés, along with central production units in four cities, with satellite cities being supplied from the base locations," said Gour. “We have enough capital in hand to grow the business for the next three years. We do not have any loss-making stores and are also reasonably profitable on the corporate level, which is why we are able to fund most of our growth from internal cash generation."
The brand witnessed a compounded annual revenue growth rate of 35% over the last five years. In its endeavour to push revenue growth, the firm is also toying with innovative strategies such as subscription models for certain product lines.
“We are also experimenting with subscription models and alternative sales channels for our bakery products and brownies. In terms of new product lines, we plan to focus more on chocolates and hampers for corporate gifting purposes. For now, our focus will entirely be on scaling up the business, while not compromising on quality, because it is the taste of our products that lingers with our customers," Messman added.