In the year 2009, a miniscule 50 sq ft coffee shop opened in the streets of Gandhi Bazar, Bangalore. It was named Hatti Kaapi and the outlet didn’t even have enough space to keep chairs. The outlet sold a combination of Upma and a cup of piping hot filter coffee for just Rs.12. But soon, the sales of its coffee alone started gaining momentum and were sold for Rs.5. Within a year it upgraded its menu and started serving serving Bisi bele bhath, Khara bhath, Maddur vada as well as Tea and Coffee.
Today, Hatti Kaapi has 27 outlets in Bangalore, Mangalore and Hyderabad. The bigger outlets even serve Poha, Uthappam and Idli. It has also managed to create its presence in Bangalore and Hyderabad airports, campuses and some IT companies with its store size ranging from 100 to 250 sq-ft. Interestingly, the rates haven’t increased much with the coffee priced at Rs.8 in most of the outlets and Rs.15 in airports.
Hatti Kaapi was founded by Mahendar U.S. after being some years in the coffee bean trade in his hometown Hassan in Karnataka. He attributes his business’s success to sound advice and strategic inputs from T.S. Lakshmana Swamy, a Hindustan Unilever veteran, who is now part of the Hatti Kaapi team.
Whenever we think of a coffee shop, the image of an air-conditioned room with classy seats, comfy sofa sets and sophisticated design appears in our minds. But the fact is, not everyone can afford to waste 100 bucks for a cup of coffee. No doubt outlets like CCD, Costa Coffee and Barista have been doing consistently well in urban areas but what about the lower middle class segment? Hatti Kaapi has managed to target the non-complaining lower middle class by providing them with the taste of a traditional coffee.
“We are not competing with Cafe Coffee Day (CCD). Our target audience and marketing strategy are different. Alongside the lower middle income category, we aim to attract traditional south Indian families for whom filter coffee is a culture,” says Mahendar.
Sunalini Menon, coffee expert and founder of Bangalore-based coffee consulting firm Coffeelabs, says Hatti Kaapi follows all the rules for making good filter coffee. “The consumer gets both quality and quantity at a low price and they are expanding slowly and cautiously.” She says.
The company had started with an initial investment of Rs 1 Lakh and now its investment has gradually increased to Rs. 2 Crore. It had a turnover of about Rs 7 Crores in the year 2011-2012. Hatti Kaapi employs about 120 people and buys its beans from Karnataka’s Chikmagalur district. It sells 30,000 to 50,000 cups of coffee daily and is planning to add 13 more outlets including five in Chennai.
Hatti Kaapi has managed to create its own identity amongst western-style Cafes and proved that sometimes it’s better to follow a different path than to be a part of a rat race.
Have a look at their site here http://www.hattikaapi.com/