Baskin Robbins: Handholding franchisees to scale their sales
India is a complex market where business dynamics change every few kilometers. A homogenous approach is unlikely to work, which is something that Mohit Khattar, CEO, Gravis Foods – Baskin Robbins well understands.
With a presence in over 200 cities across India and operating through 700 ice cream parlors, he tells Retail Networks that Baskin Robbins has initiated a program to handhold franchisees who are not performing at par or have been witnessing a decline in sales. Its weak store program has a dedicated member that identifies franchisees who need support to grow their business. Baskin Robbins then draw up a list of activities specific to that catchment, which could include manpower, marketing support or subsidies.
Here are excerpts from his interview:
What is Baskin Robbins’ retail presence in the country currently?
In India, Baskin Robbins is present across 200 cities through about 700 odd parlors. Over the last two to three years, we felt that the brand also need to grow in the general and modern trade side and that has given fresh impetus to our growth.
Why is the retail domain a significant growth opportunity for Baskin Robbins?
The big opportunity really lies is playing in this field. As a brand, since we are well known, we believe that it’s a question of leveraging the awareness that already exists for the brand.
By placing it across general trade and many other outlets, we are basically helping Baskin Robbins reach many more consumers who are already aware of the proposition and who already love the taste of our products. However, today an ice cream parlor may not be conveniently located next to them. So, we believe there is an opportunity for the brand to grow through the retail route as well.
How will you ensure that your products get best shelf space in general trade and MBOs?
At this point of time, we are reaching out to a small base of MBOs – it is still under 5000. I’d said that the journey has just started so we need to grow multifold in that space.
So, it is a tough task. By and large our education to the MBOs is possibly not doing the job so far. It is a question of placing our products in the outlets and putting some communication at the outlet level.
At the same time, we are also selling online. So customers can order online. Increasingly we are seeing traction grow on that channel. We are plugged in to all the delivery apps etc., so we have tie-ups across the country with assorted aggregators and we are delivering through them as well. We have also tried selling through social media.
How are you also growing your outlet footprint?
Every quarter, we are adding about 25 outlets. The first target would be to reach about 1000 outlets in the next three years. Of these, 99.9% would be franchised stores.
Given this aggressive growth plans, how are you helping your franchisees reach their targeted goals as well?
Our objective is to see that if there are franchisees who are not able to attain the targeted returns, both in terms of absolute amount or return on investment, we should handhold them in some way. This could be by giving inputs to grow their business or offering material support in terms of physically helping them through whatever support measures identified for them. It could also be in the form of manpower, marketing support or subsidies in some cases.
Is there any formal strategy that you have to help your franchisee partners in need?
There are franchisee partners who may have seen decline in sales when the overall sales is following a different trajectory. So we have a weak store program wherein we identify franchisees who might not be doing as well as we want them to do. We then draw out a list of activities, which may be specific to that catchment area. One person in our team then drives the weak store program.
If awareness is an issue and not location, we create awareness for that parlor in the local catchment area. This could be through simple means like distributing leaflets to putting up a hoarding to taking up a bus shelter or putting up a kiosk – whichever manner can address the issue.
While that is a push strategy, how are you using loyalty programs as a pull tactic?
Our loyalty program has done reasonably well in terms of traction and number of customers who that have enrolled in it. It has also helped in our ability to reach to those customers frequently and generate sales through them. At this point of time we have just tapped into one third of our customers with the loyalty program.
We still haven’t gotten to the stage where we are analyzing Big Data. But the idea with the loyalty program and the entire CRM has been to ensure that we have enough data to start working in this direction.
Talking about the use of technology, how are you leveraging it for distribution and supply chain?
The quality of cold chain infrastructure in the country is not as good as we would like it to be. So that presence a challenge in terms of integrity of the product, which is on the shelf.
We are in the process of introducing simple software to track what it happening till the distributor level and beyond that. But the process as of now is manual.
We have stockists in key cities who supply to our parlors at this point of time. And then we have distributors who supply to general trade and modern trade. There would be around 40 distributors.
We also have ERP at this point of time in our production system, but we are in the process of overhauling that now. We are also planning to use SAP.
How is the ice cream business positioned to grow in India?
The overall ice cream consumption in India is still very small – it is just around 300 ml per person annually. The organized industry is roughly about INR 6000 crore and it is growing about 15%. And we are also growing by 15%.