Coffeeza Eyeing 10x Growth In Next 2 Years, Says Rahul Aggarwal, Founder & CEO

Highlighting that the next decade belongs to the country, Rahul Aggarwal, founder and chief executive officer (CEO), Coffeeza has expressed his commitment to being a part of India’s growth story. The founder of the coffee brand, which now has over 15 blends in its range, has set his eyes on achieving a ten times growth in the next two years.

In an exclusive conversation with BW Businessworld, Aggarwal provided his insights and delved deeper into topics ranging from the challenges in the initial days to the innovations the brand is focusing on to ensure they come out on top in a constantly evolving and growing market. He also shared his input on how the brand is trying to tap into the diverse market of the country where the tastes and preferences have been changing over the years.

The Love For Coffee
Even though the founder of Coffeeza was once in Syndicate Group (now Siva), which specialises in RFID technologies and hospital patient identification, there was always a love for coffee brewing.

“As a student, my car's number plate used to read the words ‘caffeine’. So, whenever I used to drive my car on campus, it was me announcing to the entire campus that a coffee lover was coming. My dorm room was where all my friends would gather and say please make us a cup of coffee. So, it was a mini cafeteria for all my friends. So, the love for coffee has been there ever since many, many years,” stated Aggarwal.

Uphill Task At The Beginning
Starting any business brings with it a bouquet of challenges and the founder and CEO of Coffeeza was not untouched by it. Be it shipping or innovation aspect, the founder had to manage things to keep things up and running.

“See, in the first initial days, I think the biggest challenge was that we used to import capsules from Italy, Europe. The transit time was around one month. And then sometimes your coffee shipments would get stuck at customs. In addition, there was a 100 per cent customs duty. So, my landed cost would come very high,” explained Aggarwal.

In addition, the founder had struggles with innovation aspects as well. “I could not innovate on the flavours and blends because the manufacturing was sitting in Italy. They were giving me plastic pots and plastic capsules and I was not happy about because we wanted to be more sustainable for the environment. So, that was a very big challenge,” Aggarwal further added.

Aluminium Coffee Capsules
After experiencing the challenges of having an overseas manufacturer, the founder decided to take a risk and set up a factory in India which brought things under control. The company now manufactures coffee capsules made of aluminum, instead of plastic.

“Now, we manufacture coffee capsules that are made of aluminum, not plastic, and are 100 per cent recyclable. Going ahead, the capsules that we will source will be made of 80 per cent recycled-grade aluminum. That means, my raw material will be recycled aluminium. And even post-use, you can recycle it 100 per cent,” added Aggarwal.

Setting up the manufacturing plant in the country led to a diverse product portfolio for the company which now has over 15 blends in its range across classic blends, and functional blends.

Talking about the quality control, since the market is so competitive, tastes and preferences are always evolving. So, bringing your A-game when it comes to quality control, becomes non-negotiable. The founder of Coffeeza had his say regarding this aspect.

“First of all, the manufacturing of coffee capsules is world-class. Nobody in India has such a manufacturing setup. At least, today. Secondly, in Coffeeza, the team is very strong when it comes to quality, R&D, and product innovation. We know that we are building a brand. We are very focused, unlike other coffee brands which are trying to do 10 things. Do this, do that. Do instant coffee. We have been very focused on capsules since day one. And in that, we have to build our brand and we have kept the quality better than day one,” commented Aggarwal.

Tea Is Not Sexy Anymore
Since Coffeeza has been in the business for over half a decade, the founder has observed some trends and shifts when it comes to the tastes and preferences among consumers of a market that is constantly growing and evolving.

“Overall, the coffee category is growing very rapidly in India. As per one report, it's growing 12 per cent year-on-year. So, if I talk about taste preferences, six years back, people would still say that tea is a big category. Now, tea is not sexy anymore. Coffee is sexy. Six years back, it was a cafe-coffee day. Now, it's all about specialty coffee. And people want to have good-tasting coffee. Variety, flavours, range,” Aggarwal highlighted.

The CEO stated that their goal was to not make things sound super technical. He said, “We want to simplify it. A common coffee lover should understand what we are offering. Good coffee, good taste, good range, good blends, good flavours. Simple, but good-tasting quality coffee.”

Tapping The Rural Market
There is a perception that coffee has become a part of corporate culture and people still drink tea in the village. The country has many people residing in the rural areas. The founder elaborated on how he is attempting to tap the rural markets.

“The overall coffee industry is playing a role in that. Cafes are opening everywhere. You will not ask your girlfriend to go for tea. You will say let's go to a coffee shop because coffee is looked at as a very cool beverage to sit down and have social conversations. Once you get used to the kick of coffee, then you will not get that from tea.

The people from the tier-1 cities have a comparatively better awareness and idea about brands but the people of tier-2 and 3 cities still remember only a few top brands when asked to name them. Talking about non-metro cities, he stated, “Tier 2 and tier 3 are very aspirational people. They are the India 2. They say we are not behind Delhi or Bangalore. Our selling point is that our product is unique. What we are doing, I don't think any coffee brand is doing it. Like we are giving machines or coffee capsules. As we scale up, we will start targeting tier 2. We are looking for funds to scale up because we also want to take the brand to other regions.”

Aggarwal highlighted a new product that they have introduced to make the entire coffee-making process comfortable and portable. The founder talked about the product. “That machine is very affordable. In the machine, all you need to do is Insert a capsule and hot water. Carry it with you. Put it in your backpack. Go camping wherever. Just press a button and it will make coffee for you. It has a beautiful extraction. It is a battery-powered coffee machine. On a single charge, you can make 100 cups,” Aggarwal explained.

Future Growth Prospects
Stating that 10 per cent of sales of the company come from the United States and they also sell on Amazon USA and UAE, Aggarwal highlighted that catering to the Indian market remains their priority since the brand is based in India. “We know that India's growth story is the real growth story. Everyone says that the next decade belongs to India. And we want to be a part of that growth story. We want to grow 10 times (10x) in two years,” Aggarwal pointed out.

Aggarwal highlighted that they are trying to break the mindset barrier that a certain type of coffee cannot be prepared at home. He stated, “Today when you go to a coffee shop, what do you say? I want a cappuccino, latte. But when you come home, what are you drinking? You are drinking Nescafe coffee. Our job is to demystify this myth. You think you can't make cappuccino at home and it can only be made in a cafe. This is what we are trying to demystify with Coffeeza.”

The Founder and CEO of Coffeeza is confident that with the team he has and the kind of focus they have on the research and innovation aspect, they are very confident of achieving that 10 times growth mark in the next two years and position themselves as one of the key players in the segment.