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New Chennaite
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Quote Stranger Replybullet Topic: Article on FruitShop in EconomicTimes
    Posted: 29-Sep-2008 at 3:30pm

Article on FruitShop in EconomicTimes

When Harris Abdulla and Mohammed Salim first set up a tiny 250-square-foot juice bar in Chennai in 1995, they were the object of much ridicule within their families. For one, the two friends had got out of their families’ traditional plywood business to venture into an entirely new line where neither had any experience.

For another, the entrepreneurs had chosen a relatively low-profile address — Greams Road — to kick off their enterprise. “Our families laughed at us and thought we were crazy. And to top it, we ended up selling more colas than juices. We quickly learnt that only patience would help us survive,” Abdulla reminisces.

Today though, the duo has the last laugh. Fruit Shop has grown to become a 11-store chain with outlets all over Chennai — including the campuses of companies like Infosys and Cognizant — and the company’s revenues currently stand at roughly Rs 4.5 crore.

The promoters are putting the finishing touches to their expansion plans across south India; and incidentally, BE caught up with them hours after they finialised a location for the brand’s first overseas outlet in Dubai. What’s more, they’ve earned the respect of fellow entrepreneurs in the beverage space.

“Fruit Shop is a very interesting company. It has managed turning the fruit juice shop business into an organised one,” says Riyaaz Amlani, MD, Impresario Entertainment & Hospitality, which owns the coffee lounge, Mocha. Abdulla and Salim’s decision to leave the family business was driven by an urge to do something “slightly more creative”.

Armed with Rs 6 lakh of capital, the two first contemplated opening a Malabar restaurant, but abandoned the plan as that space was already quite cluttered. The idea of starting a fruit juice shop occurred when they saw that although Chennai had its share of juice stalls and restaurants that served juices, ‘branded’ fruit juice stalls were virtually non-existent.

Expectedly, the early years were a grind — Abdulla recalls the shop would sell about 200-250 bottles of cola, but just 35 glasses of juice a day. “We would urge customers to try our juices, with no credentials backing us,” he says. The promoters soon figured that the answer lay in creative experimentation. They started taking simple juices and milkshakes and began spicing them up, concocting innovative mocktails as they went along.

Today, Fruit Shop’s menu has over a 100 flavours on offer. “Our USP was — and still is — interesting juice blends with offbeat names. We could have referred to books and recipes, but then we’d have lost out on originality,” says Abdulla. For the record, Fruit Shop now sells just one crate of cola across all its outlets in a week.

While Fruit Shop’s popularity spread through positive word-of-mouth, the promoters also actively conducted sampling exercises in schools and colleges. What also helped was the fact that neighbouring Nungambakkam began developing rapidly as a commercial and residential destination, lending Greams Road the ‘hipness’ it previously lacked. But ultimately, it’s the product that worked for Abdulla and Salim.

“The main reasons we’re able to maintain a loyal customer base is because we never compromise on quality,” Abdulla says. He points to how copycats even poached Fruit Shop’s staff and pirated the menu, but ended up downing shutters soon after. Incidentally, Fruit Shop now plans to patent its juices.

Expansion is very much on the cards — while two more outlets are slated to start in Chennai over the next couple of months, the Dubai outlet will be functional very soon. And they are looking at setting shop in Bangalore and Hyderabad thereafter. “We have been a little old-fashioned in terms of expansion. We’ve always wanted to make sure that we have a secure foundation in one city before entering others,” explains Abdulla.

However, caution hasn’t come in the way of Fruit Shop rapidly scaling operations within Chennai — over the last two years alone, the promoters have added six outlets in the city. And they’ve also learnt a trick or two about locations and the business model. For instance, revenues from the T Nagar outlet continued to slump, in spite of the fact that it happens to be one of Chennai’s premier high-street areas — so much so that Abdulla and Salim decided to cut their losses and close shop.

“People go to T Nagar to shop, and given the heavy traffic and chaos, no one really wants to relax in a juice bar in areas like that,” Abdulla reveals. On the other hand, their outlet near the airport, which used to generate revenues of just Rs 3,000 a day, now delivers six times that figure, thanks to the residential societies and commercial complexes that abound.

Competition for Fruit Shop comes mainly from South Indian restaurants, fresh juice stalls and coffee shops, but Abdulla isn’t particularly bothered by this. “Everyone needs different beverages at different times. There is a restriction on the number of cups of coffee you can have in a couple of hours, whereas for juice, we’ve noticed that that’s not the case,” he says.

Pricing ranges from Rs 15 to Rs 100 for a glass. The promoters have also resolved the issue of seasonality of fruits by juggling between menus — they also claim to share strong partnerships with suppliers who procure fruits from across the globe.

Fruit juice is clearly the space that the duo has marked out for growth. Recently they offloaded their majority stake in multi-cuisine restaurant Galloping Gooseberry (retaining only a 10%) to focus on the juice business. In the long-term, Abdulla says the company may even enter the packaged fruit juice market.

“We have been standardising our operations so far. We started off with a long-term view and told ourselves that we want to make sure that the growth is structured,” he says. The company expects revenues to grow to about Rs 30-Rs 40 crore in the next five years.

With expansion comes the challenge of supply chain and manpower management, quality assurance and maintenance logistics, and Abdulla knows it’s not going to be easy. “When you’re entering a new city, you have to start afresh. And we don’t have the option of saying we are novices anymore,” he says.

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Quote coolgamer Replybullet Posted: 09-May-2009 at 10:15pm
Very impressive and self motivating...
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