Vending machines are essential to Chai Point's expansion plans

Chai Point, a tea cafe chain, is counting on vending machines to help it become India's largest tea and coffee retailer.

MyChaipersonal, myChai boxC, and myChai bean to cup are three types of clients that Chai Point wants to target with tea and coffee vending machines.

Bakeries will have MyChai personal vending machines, and corporate offices will have MyChai boxC. Western coffees such as cappuccino, americano, and macchiato will be served via myChai bean to cup equipment.

"We have already built over 4,000 vending machines, and our goal is to install 30,000 vending machines in each of these categories in the next three to four years," says Amuleek Bijral, the company's founder and CEO.

"We see ourselves as a beverage platform, with aspirations to be one of the largest tea and coffee beverage platforms in the world." We want to make sure that customers can get consistent, high-quality tea and coffee. That implies we'll have to communicate with clients through a variety of ways," Birjal explained.

In addition to retail

Like numerous cafe businesses and eateries, Chai Point, which began as a fast service tea shop in 2010, has had its ups and downs in the aftermath of the COVID-19 outbreak.

Office closures damaged the business-to-business (B2B) market, which provided vending machines to corporate clients, and offline retail stores were closed.

As the company recovers from the pandemic, it has focused on four areas for expansion. Chai Point's retail operation, which includes delivery, accounts for 60% of the company's revenue. The corporate business accounts for 30%, while the direct-to-consumer segment and the MyChai platform each account for 5%.

Chai Point reported operating revenue of Rs 56 crore in the financial year 2021, down from Rs 189 crore in the previous year, according to Ministry of Corporate Affairs records.

In the next two to three years, the company expects to make Rs 700 crore from the vending machine market alone.

"We've realised that developing a consumer brand around tea and coffee in a nation like India can't just be a retail channel play," Bijral said.

"We don't want to be pigeonholed into thinking that stores or vending machines are the only options," he continued.

According to Bijral, the baking business offers a huge opportunity. There are over 1 million individual bakeries in India that want to serve tea and coffee to their consumers.

"At the moment, we're only aiming for 3% of this pie," he explained.

Coffee is included in the mix

Chai Point will sell tea leaves and coffee beans, as well as other ingredients needed to brew the beverages using its machines.

Bijral claims that the company recoups the cost of their machine in 8 to 10 months.

"Our business model is the consumables that go into powering the machine," he explained. "This is the same business model that we use in our office channel, where we don't sell the machine but rather install it as a service."

The company has also begun providing coffee using these devices and will be selling units that can dispense western coffee, a departure from its original USP of "freshly brewed tea."

According to Bijral, the company's target segment of white-collar professionals favours coffee over tea, thus the beverage is now available.

About four years ago, the company began offering filter coffee and has since expanded to include western brews.

QSR restaurants such as Chaayos and Chai Thela compete with Chai Point.

In a Series C fundraising round headed by Alpha Wave Ventures, Chaayos just raised $45 million. Last year, South Asian Enterprises bought Chai Thela. Earlier this year, Chai Point received an unknown amount of money from InCred Capital.