How SLAY Coffee focused on coffee outside the café to brew strong sales amid the pandemic
Founded by a couple who missed New York’s coffee culture, Bangalore-based cloud-kitchen delivery startup Slay Coffee claims 3X growth amid the pandemic, and is now eyeing expansion.
When Chaitanya Chitta moved back to Bengaluru from New York around 2015 with his wife, Lakshmi Dasaka, one of the things they missed the most was the Big Apple’s coffee culture.
“There are cafes everywhere, and you find good coffee so easily. In Bangalore, you have Udupi restaurants mostly serving filter coffees. They are really good, but not the same,” Chaitanya says.
The couple decided to solve their own pain point and in 2015 started DropKaffe Food & Beverages Pvt. Ltd., which sells SLAY Coffee through a cloud kitchen model.
The brand promises to deliver hot gourmet coffee within 30 minutes, with a snack for Rs 200-300. “You can think of it as Domino's pizza’s business model, but for coffee,” he says.
Operating in the “coffee outside the cafe” space, Slay is now present at 150+ cloud locations and at 10+ sites in an on-the-go coffee bar format. The coffees, handcrafted by baristas and delivered in spill-proof, temperature-controlled packaging, include innovative products like the SLAY-X, SLAY PourOver, and the SLAY DIY HomeBrewing Kit.
Before starting DropKaffe Food & Beverages, Chaitanya founded Smarton Learning Solutions. Lakshmi, a Cornell University Graduate, was the co-founder of her husband’s education learning solution enterprise.
The beverage company raised a pre-Series A round of $550,000 in 2016. The firm was then operating in the cold coffee space and planning to launch a smoothie range. The coffee startup adopted the cloud kitchen model after multiple cloud-kitchen brand owner Rebel Foods Pvt. Ltd. became their partners.
Slay Coffee is currently selling across Mumbai, Bengaluru and Delhi, among other cities.
In the beginning
The cloud kitchen model came into existence after many trials and errors. In 2015, the firm was facing competition from Delhi-based Muhavra Enterprises Pvt. Ltd.’s Blue Tokai, which was started in 2012, and other established FMCG coffee brands.
The lack of internet penetration meant Chaitanya and Lakshmi would have to focus more on the retail route, just like any other new F&B brand back then.
The founding duo shared a coffee-specific survey on Facebook and garnered responses from 10,000 people. One of the learnings was that people wanted quality coffee at lower price points.
“Not everyone wants to spend so much money on going to a cafe and having good coffee. So, we wanted to bring quality coffees to people’s doorsteps. Instead of you going to the coffee, at cafes, the coffee can come to you,” Chaitanya says.
The brand currently has 150 cloud kitchens, in collaboration with their investor Rebel Foods, across 10 cities including Mumbai and Bengaluru.
Since there is no real estate cost of maintaining cafes and paying on-ground staff, SLAY Coffee’s beverages usually retail between Rs 95 and Rs 200. The brand also offers deals with snacks such as rolls and cakes from Rebel Food’s cloud kitchen brands Faasos and Sweet Truth, among others.
Strong focus on the brew
Chaitanya and Lakshmi decided to focus on procuring premium quality coffee from coffee estates across Karnataka, including Chikmagalur, which is renowned for its coffee plantations; packaging that keeps the product hot or cold till it reaches customers, and changing consumer behaviour of ordering coffee online.
“It is not like we cracked this on the first day. We had to go through a lot of changes,” Chaitanya says.
The cloud coffee brand is about two years old, and the founders spent the earlier years launching a retail focused readymade coffee. During this time, they also retailed a range of SLAY home brewing kits online.
But now, a major chunk of the business comes from the cloud kitchens. The firm claims every cloud kitchen gets at least 100 orders on an average with outlets in high density areas notching up to 300-400 orders per day.
Business and more
The coffee seller is currently competing with the likes of Tata Consumer Pvt. Ltd.’s Starbucks, in the coffee ordering segment. DropKaffe competes with biggies such as Nescafe and direct-to-consumer brands including Blue Tokai and Kolkata-based Country Bean in the coffee powder and bean segment.
With people locked in their homes, online ordering has increased and food delivery aggregators, including Zomato and Swiggy, have reported record orders.
Chaitanya says brand discovery increased during the lockdowns and there has been a steady flow of orders. The brand claims to have grown 3X in FY21 compared to FY20, and saw a 5 percent growth in orders during the second pandemic wave in April 2021.
The company, which raised $5 million from Rebel Foods and other investors in 2019, and has so far invested Rs 40 crore in the business.
The founders have set their sights on international expansion and have plans to enter Dubai, Indonesia, and other Southeast Asian markets in the coming years.
The brand is also planning to expand their SLAY Coffee Bars for a “grab-and-go experience”.
“There will be a few seats available and customers can just take their coffee and get on with things,” Chaitanya says. These small-size bars will be located at airports, shopping areas, and offices. “We plan to open around 15 100 sq ft cafes in Bangalore, among other metro cities.”
Edited by Teja Lele