MUMBAI: Chennai-based Ubiquitous Foods, which runs bakery chain Ovenfresh, is set to expand its operations to the high streets to target the retail consumer. The company, which has focused on outlets in IT parks and office complexes, plans to nearly double its outlets from 28 to 50 by the year end.
Founded by former investment banker Rajiv Subramanian, the company is also in early talks to raise $8-10 million (Rs 48-60 crore) in series-B which it expects to complete by December 2014.
Last year it raised an undisclosed amount of funding from venture capital firm Kalaari Capital. The company has expanded from nine outlets to 28 in the past six months. Ovenfresh started in Chennai but is also present in Bangalore. It plans to have 80 outlets in these two cities.
The outlets planned will be 550-1200 square feet, with the first already operational in the Madipakkam and Velachery neighborhoods of Chennai. Experts see an opportunity in the market, which is highly fragmented.
"Bakery has a huge potential because there is no national player in the high-end and mid market, while there are players like Monginis in the budget market," said Samir Kuckreja, former CEO of Nirula's and founder of Tasanaya, which advises restaurant chains.
According to Euromonitor, the bakery segment is expected to nearly double from Rs 28,391 crore in 2013 to Rs 54,148 crore by 2017 in India. When the company was bootstrapped, Ovenfresh decided on a niche strategy to open outlets in IT parks and office complexes where rentals are lower and there is a captive customer base of office goers.
But having built a brand in these cities and run out of captive locations, it has decided to take its brand to top retail locations.
"Our approach is very process oriented and that is where our innovation is. We run commissaries in Bangalore and Chennai which supply to our outlets every day. Since we own the supply chain we are able to keep the outlets small which drives down real estate cost and employ low-skilled labour but deliver fresh baked goods in very short time," said 32-year-old Subramanian.
Subramanian, an IIM Ahmedabad alumnus, who worked at Lehman Brothers, started Ovenfresh in 2008. His mother, a master in food nutrition, used to run small bakery from back of their house for 10 years where he used to help out.
For more details : http://economictimes.indiatimes.com