The company started in 2007 and has been able to grow organically. However, for newer growth initiatives under discussion, it may consider an equity fund raise in the near future, according to Abhinav Mathur, CEO & managing director, Kaapi Machines.
“Coffee machines no longer mean a single category of products. There are under-counter machines like Modbar, specialty machines like La Marzocco Strada, as well as machines like Brood to make a Nitro Coffee or Tone Touch3, one of the world’s first boilerless coffee machine. The amount of innovation in this category is breath-taking and there are yet more innovations on the way,” he added.
The key trend is the emergence of many local coffee roasters in almost every major city in India. We have sold more coffee roasters during last 2 years than in all previous 10 years combined. There is also a clear emergence of Specialty Coffee cafes and Roasteries – popular ones being Araku Coffee & Subko, alongside many newer ones emerging from newer markets like Surat, Ahmedabad, Pune, Jaipur, Jabalpur and even North-East, all previously considered tea drinking markets.
“With the emergence of a more discerning consumer, the primary challenge for this segment is how to maintain consistency of product as cafes scale and to differentiate and keep the customers interest alive,” Mathur said while speaking to FnB News.
The company imports most of its products from Europe and the US. Even though the international supply chain had disruptions, yet the import duty structure has been fairly stable and well understood.
The company has a partnership with Probat, Germany, the world’s largest coffee roasting equipment manufacturer through a joint venture, under which it has been manufacturing roasters for over 5 years now. “There is interest from a select few international partners on various technical collaborations including possible manufacturing, and we may see some of those projects break ground sometime this year,” he said.
Much of the growth is expected through planned expansion of chains and new coffee projects. Emerging spaces like Retail, D2C, co-working spaces as well as café culture coming to tier-II and tier-III cities are also expected to fuel growth. It sees itself as the partner of choice for all coffee business in India for a small café, a five-star hotel, a coffee roaster or even an emerging D2C coffee brand.
Currently, the company’s growth is coming from new markets like Surat, Ahmedabad, Hyderabad, Ludhiana and Jaipur. Driven by the pandemic, the work from home (WFH) culture has led families in the metros migrate to smaller cities but are still expecting good coffee to be available which is a positive factor to drive growth.
The company functions as a full-stack coffee consultancy, equipment and after sales company in a market dominated by pure-play trading entities. This gives the company an edge amongst competitors as none of the others have created a strong infrastructure with regional and local support for training and after sales service. Newer innovations like its Kaapi iOT platform for vending machines and online e-commerce and CRM tools are also clearly ahead of the industry. It conducts coffee events including Barista contests, coffee community meet-ups and online masterclasses to maintain its leadership position in the industry, according to Mathur.