FMCG brand Rage Coffee is gearing up to extend its reach in international markets while also enhancing its presence in modern trade outlets across the country. The company is set to open kiosks as part of its strategy to increase out-of-home consumption, according to Bharat Sethi, the founder of Rage Coffee.
Over the past six months, the brand has extended its operations to five international countries, including the UK, GCC, Nepal, Bhutan, and Sri Lanka.
“We have forayed into these 5 markets with different partners. In the UK, we only have an online presence whereas in Sri Lanka, we have partnered with offline brands that also have an online presence. We are running a distribution-led business in Dubai and in Nepal and Bhutan, as the online market is relatively small, so offline penetration is the key,” he said.
In order to solidify its presence in these nations, the coffee brand intends to allocate INR 2.5-3 crore towards marketing efforts.
Moving forward, the brand intends to broaden its business to encompass regions such as Africa, Saudi Arabia, Europe, and North America.
“By this fiscal end, we expect 10 per cent of our revenue to be coming from the international business,” he stated.
To address the growing demand, the brand, featuring 15 SKUs, does not intend to establish additional manufacturing units. The recently inaugurated manufacturing facility in Manesar, spanning 30,000 sq. ft., is currently utilized at only 40-50 percent capacity.
“We can do 3x to 4x of production of what we are doing right now with an additional packaging line, however, additional investments won’t be required,” he asserted.
In the brick-and-mortar sector, the brand has collaborated with key modern trade entities such as Metro Cash and Carry, Walmart, More, DMart, and Reliance. Presently, it has a presence in 1,500 modern trade outlets and aims to extend to an additional 1,000 MT stores by the end of this fiscal year.
“Additionally, we have tied up with 200 distributors and have a presence across 20,000 general trade stores. In GT, we are expanding with small packs worth INR 2 and INR 5. Currently, small sachets comprise 30 per cent of our business. By value, it is very low but volume-wise, it will overtake the overall business in the next 18 months,” he stated.
Currently, 30 percent of the brand’s business originates from marketplaces, 20 percent from direct-to-consumer (D2C) channels, with the remaining 50 percent evenly split between general trade (GT) and modern trade (MT).
“Currently, our CAC (customer acquisition cost) stands at INR 30-40 for AOV (average order value) of INR 600. For online, we are focusing on retention marketing and our online customer loyalty stands at 60 per cent,” he said.
In the brick-and-mortar domain, Rage Coffee records a monthly throughput of INR 2,500 per outlet and a Gross Merchandise Value (GMV) of INR 4,500.
Moving forward, the brand also intends to increase its out-of-home consumption by launching 2,000 kiosks within the next 36 months.
“In India, we have earmarked about 90 non-metro cities to expand this model. We will be opening these kiosks at institutions, colleges, universities, hospitals, corporate offices, and shop-in-shops,” he said.
The brand is set to launch kiosks in two sizes: 180 sq.ft (offering exclusively coffee) and 400 sq.ft (providing both coffee and food). Approximately 70 percent of these outlets will be managed by franchise partners.
“The CAPEX involved in opening 180 sq.ft kiosk stands at INR 5 lakh and we are expecting the payback in seven months,” he asserted.
Having achieved EBITDA profitability in the last quarter, the brand is actively seeking strategic partners, patient capital, investors with a long-term outlook, and family offices to secure its next round of funding for expanding its distribution.
“By expanding our distribution, we aim to become a INR 500 crore brand in the 3 years,” he stated.
To date, the brand has secured INR 50 crore in equity, INR 5 crore in venture debt, and INR 5 crore in unsecured loans from NBFCs. Noteworthy investors supporting the brand include Virat Kohli and Sixth Sense Ventures.
The brand, which concluded the previous fiscal year with INR 34 crore, aims to reach INR 55 crore in revenue by the end of the current fiscal year.