In his first interview since taking charge, following the top-level restructuring in March, he told ET that the Westbridge Capital-backed speciality coffee chain is scaling up its roastery capacity threefold across offline retail channels, not limited to its own stores.
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Luthra, who ran KFC India operations for more than a decade and is now working closely with co-founder Sushant Goel as part of the transition plan, said the Bengaluru-based company has seen healthy growth across key metrics in its operations.
“We will continue to be a coffee-first brand. We should add at least 50 stores by the end of the financial year – that’s the minimum we are looking at. Besides our existing markets, we are looking at a couple of new markets like Chennai,” Luthra said. “There are so many cities around which are also closer to Bengaluru.”
The expansion comes at a time when new-age coffee brands such as Blue Tokai, Subko Coffee and AbCoffee have seen a rush of venture capital. This has pushed all coffee chains to expand. Canada’s Tim Hortons and British chain Pret a Manger have entered India, joining legacy brands such as Starbucks and Costa Coffee.
“The current cities itself will be able to take multiple stores and we don’t expect cannibalisation to happen in our current stores. That will allow us to open up more stores in our current cities,” said Goel, who was the CEO till March and is transitioning to a board role while Luthra is running daily operations.
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Luthra said Bengaluru, the company’s largest market, has 44 stores but has an appetite to sustain more stores.Third Wave has a total of 107 stores at present, while Blue Tokai has about 100 and Starbucks has 400 stores across the country, as per industry estimates.
Third Wave and other brands are also adding new products and updating their menu.
“The roastery that we have is just enough to feed our own stores. The new capacity – with equipment in place and land deals signed up – will see construction start. Then, we will go all out selling our beans,” Luthra said.
Goel said 65% of the company’s revenue comes from beverages and the rest from food and merchandise. Delivery from platforms such as Swiggy and Zomato accounts for a quarter of its sales, he said.
Third Wave Coffee more than doubled its operating revenue in 2023-24, according to the company. In the previous financial year, its revenue grew more than fourfold to Rs 144 crore, along with a loss of Rs 54 crore. Its audited financials for 2023-24 have yet to be filed with the Registrar of Companies.
It last raised $35 million (about Rs 292 crore) from private equity fund Creaegis in September 2023. In all, it has raised $66 million so far.
