With an objective to provide fresh milk-based coffee and tea through a vending machine, Roastea, conceived in 2019 is now celebrating its success in multiple cities, formats and corporates. Launched and co-founded by Anurag Bhamidipaty, the vending machines provide over 30 beverage options, including filter coffees, western-style coffees, Indian masala chai, and artisanal green teas and is present in multinational corporations, conglomerates, airports, and hospitals. 

At present the number of vending machines installed/operational/to be operational is about 750 machines.  The presence spans across 17 and more locations in India. The company has taken an aggressive strategy, and by the end of FY 23 will have approximately 850 machines and will have multiplied revenue by four to five times that of FY 22. According to Bhamidipaty, by 2024, Roastea anticipate having 2500 vending machines and 30 cafes and kiosks in about 23 cities and 10 states. The company's pursuit of a pan-Indian presence heralds well for its future. 

The Business Model

Roastea incorporates technology and has a one-of-a-kind IoT-enabled configuration for all of the machines. “We ensure full transparency to our customers by offering them access all while rendering excellent quality and catering to a variety of taste palates. We are also into kiosks and cafes. We choose our Cafes in premium location for brand building and as QSR,” the co-founder shared in an exclusive intercation. The kiosks are placed in high footfall areas for captive customers like malls, office complexes, airports etc to enable more profitability and visibility. The company has recently launched functional coffees through D2C vertical.

The vending machine segment is that the company place the machine with corporates on a no-cost basis and charge only for the supplies of the formula driven consumables like tea powder, coffee powder, sugar, spices etc and also charge a comprehensive maintenance charge on the machines. On the outlets front, Roastea has large format cafes where speciality coffees and teas along with specially curated menu for food is served and, in the kiosks, the brand position itself in captive customer areas like malls, airports, office complexes and serve various types of coffees and teas and also a comparatively smaller spread of eatables.    

Offering ‘Ghar Wali Chai’ through vending machine

Roastea claims to be the first brand  to combine together tea and coffee under one roof and through a single machine. The brand is in a sense India's long-awaited solution to its desire for tea and coffee with an authentic, homemade flavor. “Our USP is that  we have succeeded in resolving the issue of restricted access of well-brewed kadak chai, which is typically limited to homemade options or small chai outlets and also gave speciality coffees of high quality under the same brand under one roof,” Bhamidipaty commented.

He further expressed that the market never gave the kind of fresh milk-based tea of different types all in one machine and all with the kind of quality and taste as a home- made tea and hence people shied away from machines but with the advent of Roastea this has been addressed in abundance. “The validation of Roastea comes from the fact that we have placed over 750 machines in the corporates and have an ongoing pipeline. With so many establishments around and people always on the move, there is a level of acceptance for a hot beverage brewed by a machine,” he said.

What makes the brand stand out

Bhamidipaty started by commenting that Roastea is a freshly brewed fresh mild based tea with no premixes. “All the vending machine companies in India deal with either premix or coffee machines. There is no single organised vending player which caters to ‘Ghar Wali Chai’ which is the maximum consumed beverage (more than 80 percent consume Tea) in India,” he added. 

According to him, there is no company which is giving identical products in the marketplace. There is no company which is giving all beverage options like coffee, tea, green tea etc with one machine. There is no company who have all kinds of machines like: filter coffee machines, beans to cup machines to give cappuccino and latte etc, only tea or only coffee machines, machines to cater to MSMEs. Sharing more, he stated, “There is no company manufacturing these machines, either themselves or only locally. We cannot be compared to the premix machines that some competitors have, as we provide only the most hygienic and premium fresh milk-based solutions.”

The Target Audience

Bhamidipaty believes that the target audience for Roastea is every beverage consumer of India. That would mean targeting 120 cr people either through the B2B2C segments i.e., corporates, B2C that is shoppers, travellers or diners, the home segment through D2C. India’s hot beverage market stands at INR 5000 crore. The café and retail chain market stands at INR 50,000 crore. 

Currently the company’s presence is in Tier-1 and Tier-2 cities in India. Roastea serves the B2B2C segment, which consists of institutional sales such as corporations, via its vending machines, B2C customers via its outlets-cafes/kiosks, and D2C-direct to customer sales via its internet sales. “Soon, we hope to achieve a sixfold increase in revenue and become the best and largest beverage brand in India. Hence, we aspire to soon become the best and the largest beverage brand in India,” he added.

Expanding through kiosks or cafes

The range of food and beverage options Roastea provide at its outlets has helped the brand interact with people from all walks of life and in various locations, be it malls, airports, or business parks. To increase customer recall, all locations should provide the same or comparable products. Food does, of course, often vary by 15 percent due to regional preferences and client preference shifts. In Gujarat, for instance, customers like chai and sandwiches for breakfast, but in Karnataka, they endorse filter coffee and idli. “We have invested in technology, particularly cold supply chain technology, since it benefits in the long run and guarantees fresh food is available. These outlets also serve as retail counters for our products,” Bhamidipaty said.

Challenges faced

In general, machine-brewed beverages fall short of the authentic flavor of the beverage, especially with tea and coffee. This created a significant void in the market and presented us with a formidable challenge. To close the gap, Roastea conducted extensive R&D and decided to combine flavor and technology. “The entire brewing process is mechanized and based on a formula, which eliminates the need for human interaction and ensures a consistent flavour throughout. Our extensive selection enables consumers to select their beverage from the same machines at the same time with no waiting time,” he said. 

However, the only challenge hitherto with the existing vending machines has been in improving the taste and offering variety. “To overcome this challenge of achieving the desirable tea quality, we invested over six months in R&D and developed a 'Superior Brewing Technology.’ This ensures consistent taste and quality together with a dispensing rate of 6.5 seconds per cup,” he shared. In fact to address the increasing demand for 'Ghar wali chai’, Roastea have resorted to automation and IoT to scale it.