For Dubey, 29, management lessons are everywhere. This makes the founder of Chai Sutta Bar (CSB) open to taking unusual learning paths while attempting to ramp up the presence of his tea QSR outlets in India. “Delivery is about punctuality, efficiency and minimising errors, and dabbawalas are a great learning platform. I have recorded a video with them regarding success, time and team management and will try to implement the learnings,” says Dubey.
Dubey came from Reva in MP to Indore for his schooling after Class 8. In 2014, he shifted to Delhi to prepare for the UPSC exams, but soon realised he was not made for it. “Studying for UPSC needed a lot of academic discipline. But I was always tuned towards business and often found myself distracted.”
In 2016, Dubey got a call from a friend from school, Anand Nayak, and the duo started talking about businesses they could start. Without informing his family about his intentions to start a business, Dubey went back to Indore in 2016. “We did not know what we wanted to do. To get some inspiration, we went on a bike tour across the city and figured out what was working. What we noticed was that tea stalls were extremely popular and worked everywhere. Anand wanted to take a franchise of McDonald’s but we had only around Rs 3 lakh. It became clear to us that we could only start something like a tea shop,” says Dubey.
The duo knew location would be a key, and they zeroed in on a property near a girls’ hostel. “We chose the location because this could be a place where youngsters could hang around. Initially, we invited our friends for a free cup of tea. Once people saw a crowd, curiosity grew and customers started flocking the place. Our strategy paid off. We opened our first outlet in July 2016 and were able to open the second shop in just two months, and that too through the franchise way,” says Dubey. The third shop came up in Ujjain and the fourth in Mumbai, again through the franchise route.
The idea was to do something different. So, Dubey decided to serve tea in kulhad. “We started with chocolate tea in kulhad priced at Rs 7 and our customers loved it. We ensured the vibe of the place was very good and at the same time, the products were affordable. Today, we have seven flavours of tea with prices from Rs 10 to Rs 30. We also have food in our menu, making us a full-fledged QSR outlet,” says Dubey.
His experiment with kulhad is also having another positive impact. Apart from using an eco-friendly option, CSB is providing brisk business to potters, “Their business was very seasonal. They either made earthen pots in summers or diyas during Diwali. Today, they are employed throughout the year and about 1,500 families have found employment through us and our competitors. In a day, we use 3-4 lakh kulhads, which means we need about 93 lakh kulhads a month, which come from different potters across India,” says Dubey. These potters are spread across small towns like Khurja and Jamnipura near Allahabad.
The company today has 380 outlets including in Dubai and Nepal. Dubey says the expansion across the northern belt of the country is almost over. His focus would now be on South India. He also recently incorporated a company in the US, UK and Canada.
“Today, the company owns five outlets and is opening one more in Dubai. The rest are all through the franchise mode,” says the co-founder.
Dubey says franchising has been a very popular way to expand because a franchisee owner sees the value in the business. “People who want to be associated figure out there is money to be made. We take a one-time franchise fee and charge 2% royalty on sales. We help in scouting for locations, finalising the menu and providing training, marketing, logistics and the entire supply chain support,” says Dubey.
Ankit Gupta, a franchise owner of CSB, says a YouTube post piqued his curiosity about the brand. “The name is very catchy, and we felt a connection with it. In December 2019, we collaborated with CSB to be a franchise holder,” says Gupta.
He adds that working with CSB was a better option than starting his own firm from scratch, as the brand gave him the confidence that they were always there to help. Gupta opened his outlet on February 22, 2020, in Mumbai’s Airoli, a month before the nation went into the first Covid lockdown. During the first month of sales, the company did business worth Rs 24,000-Rs 25,000 every day. “But after the first month, we had to shut because of Covid. We reopened after four months. Today, when not all the offices and colleges are open, we still manage to make Rs 22,000-Rs 25,000 in average sales daily,” says Gupta.
While many would associate “sutta” in the company’s name with smoking, Dubey says they do not endorse smoking. “Since we are not a brand, we wanted a unique name, and this was a marketing technique that we used. None of our outlets support smoking and in fact, smoking is strictly forbidden in all our outlets. We even run anti-smoking campaigns,” says Dubey.
For a young entrepreneur, Dubey says the pandemic has been one of the toughest periods in his life. “From the rent of the shops to the inventory we held, we had to find ways to manage everything. Most of the people who work for us are disabled or orphans. Paying their salaries was very difficult. But amid this crisis, the inspirational initiatives that our team members undertook meant we could ride out the pandemic. We also sold our first franchise in Canada during the period and that gave us a lot of confidence in what we were were doing. Before Covid, we had about 100 franchises; now we are nearing 400,” says Dubey.
Tea is the second highest consumed beverage on this planet, after water, and India ranks 29th in global tea consumption. “Internationally, the opportunity is even larger. The UK comes second in that rank after Turkey. People in the UK like water-based tea, so we will tune our products to their liking. The large Indian and South Asian community there will also get a taste of our traditional milk-based teas. In Canada, bubble tea is very famous and we will be going up against the iconic Tim Horton. But we will act according to the needs of the market,” says Dubey.
The company clocked Rs 10 crore in revenues last financial year, while the franchises under its ambit clocked over Rs 150 crores last fiscal. The startup has been bootstrapped till now, but Dubey says he would need funding as it continues its expansionary mode.