How this coffee machines company caters to Starbucks, McCafe and others whilst innovating to reach small town players
They say ‘may your coffee be strong, and your Mondays be short’, but what does it take to get that perfect blend of hot cup of coffee down to pat?
From the quality of beans to the consistency of the roasters, to adding the right amount of decoction, and everything in between, the formula to brew the perfect coffee is not always that simple.
Back in early 2000, when cafe culture was sweeping through the Indian market, Suresh Jagannathan witnessed a gap in the industry. Efficient and sophisticated coffee equipment that could transform the superior quality of homegrown coffee beans into a good cup of coffee was missing. Determined to do something, in 2007, Suresh founded Kaapi Machines to bring cutting-edge coffee equipment and tech-innovations to India in partnership with leading international brands.
He founded the company along with Nils Erichsen, a German citizen, as Kaapi Machine’s Promoter-Director. At present Suresh and Nils are promoters of Kaapi Machines at a global level.
In an interaction with SMBStory, Abhinav Mathur, CEO of Kaapi Machines, talks about the company’s growth in the last 14 years, and how it counts big brands like Starbucks, McCafe, ITC Hotels, Blue Tokai, Third Wave Coffee Roasters, and more as clients.
Seizing the market
In a market dominated by Cafe Coffee Day, Lavazza, and Middleby Celfrost, Kaapi Machines has established itself as one of the leading players in the country.
A B2B coffee consulting, training, equipment solution and service entity, Abhinav says that the company helps its clients to start a coffee venture or even a D2C coffee brand, and assists them right from concept to execution. The company clocked a revenue of Rs 24 crore in FY 19-20.
Kaapi Machines deals in commercial automatic and semi-automatic coffee machines, blenders, grinders, ripple makers, and brewers. The machines are imported from Germany in association with reputed international partners like Rancilio, WMF, La Marzocco, Vitamix, Mahlkonig, Bunn, Urnex, Ditting, to name a few.
Abhinav is at present leading the development of the company and has recently taken the chair of Director and shareholder.
Kaapi Machine's equipment
Recently, Kaapi Machines also launched one of India’s first Modbar at Araku Cafe in Bangalore. A Modbar is an innovative espresso brewing system that can be tucked away under the counter, allowing the owners to create their modular bar, aka Modbar.
When the pandemic hit
Abhinav admits the last 12-15 months have been the most challenging, as Kaapi Machines' primary customers – cafe and restaurant owners - were trying their best to survive, and new ventures were getting postponed.
“We provided support to our customers through after sales service all through the pandemic as they expanded their home delivery business. Surprisingly, when the markets opened, the café segment bounced back quickly, as many consumers preferred to go out and have a quick cup of coffee rather than planning an entire fine-dine experience,” he adds.
The Indian coffee machine market is projected to grow at a CAGR of over 16 percent by 2023, on account of rising coffee culture and increasing dual household income across the country. Kaapi Machines has also observed a shift in the coffee industry - the launch of many new Roasters and specialty cafes during the pandemic. “We worked with these new coffee businesses to get them off the ground quickly through the supply of specialised equipment, training and service support,” Abhinav tells SMBStory.
Reaching smaller players
With the F&B industry bouncing back in spurts, Abhinav says that many small players diversified into the coffee business, and the industry also witnessed many new entrants in the market.
“Last year, the period between March to June gave us zero revenue, but July onwards, business started, and we gained momentum from October. That was the time many small entrepreneurs from small cities started up as well,” Abhinav says.
Demand from smaller cities got Kaapi Machines busy too. “With so many people migrating to their hometowns during the first wave of the pandemic, and starting up on their dreams, we received calls from Tier II towns like Ludhiana, Jabalpur, Jodhpur, Jalandhar, and more.”
To cater to the smaller players, Kaapi Machines innovated, and launched speciality machines that were affordable.
Kaapi Machines is keen to lead innovation in the coffee industry. Through its portfolio of international brands, the company aims to constantly launch new technologies soon.
The company also recently launched its proprietary Internet of Things (iOT) software to control the selection, and dispensing of coffee from automatic machines.
“Many of the top international café chains are all set to enter India. We are also excited to see the emergence of a number of D2C coffee brands, and believe that our growth will come from supporting such ventures as they chart their own growths,” Abhinav says, talking about the company’s growth plans.
Kaapi Machines is also looking into diversifying into the bakery, dessert and shakes chains into coffee-based beverages, and expects that all such trends are bound to assist Kaapi Machines in its growth plans. A factory to manufacture coffee roasters is also in the pipeline.