He sampled 15 cookies at the Cookie Man''s outlet at Chennai''s
Spencer Plaza while waiting for his sister to complete
her shopping. A twinge of guilt at having freeloaded on
so many, (each weighing around 12 grams) he bought a kilo
out of courtesy sake and left for home.
couple of months later he bought into the cookie company
Australian Foods India Pvt Limited, an Indo-Australian
year old S B P Pattabhi Rama Rao, now president, Australian
Foods India Pvt Limited, recalls, "For three months
after that purchase I was on tour. On my return I was
surprised to hear that my father had begun eating cookies
regularly and had brgun stocking them at home regularly."
That made him wonder; his father, S B P V Rammohan Rao,
heading the family''s sugar mill Saravaraya Sugar Mills,
was a man with a frugal temperament and not known to patronise
called John Lynch, chairman and chief cookie taster and
one of the promoters of the company and later bought into
the company." The other promoters are private equity
firm Paracor India Investments Limited, Mauritius, and
Cookie Man Pty Ltd, Australia.
to becoming Cookie Man''s shareholder-president, Rao headed
the operations for Satyam Cinemas, a leading multiplex
in Chennai. "Before that I was in the hospitality
sector working at Tulip Star Hotels and The Indian Hotels
interesting is his wife''s association with Cookie Man''s
cookies. A Bangalore person, she used to gift Cookie Man
tins to her friends and relatives regularly before her
marriage a year ago.
ours is an arranged marriage, her friends and relatives
continue to tease her, saying she used to hang around
our Bangalore outlet under the pretext of buying cookies
only to net me in," he laughs.
after his joining the management, the company was rechristened
to its current name from Cookie Man India so as to keep
the brand and corporate identities distinct.
in ten cities (Chennai, Mumbai, Gurgaon, Noida, Kolkata,
Hyderabad, Bangalore, Indore, Pune and Ahmedabad) with
18 outlets, Rao says Cookie Man will soon be in 33 cities
by the end of 2008.
cities that the company plans to enter for the first time
are Jaipur, Lucknow, Ludhiana and Cochin and also surrounding
around of Mumbai like Thane and Vashi.
Rs12.5-crore turnover Australian Foods India operates
three retail formats - Cookie Man Stores being the biggest
format spread over between 300 and 500sq.ft where fresh
cookies are baked and sold; Cookie Man Kiosks the mid-sized
formats between 80 and 100sq.ft retail outlets selling
pre-packed cookies and baking a limited variety and finally;
the smallest 30-sq ft Cookie Man Express sales-only outlets
that sell only pre-packed products.
company has 10 Cookie Man ''mother'' stores, two kiosks
and eight express outlets.
the first four largest standalone cookie stores in the
world are under the Cookie Man signage in India. Internationally,
the Australian brand is present in 12 countries with 108
to Rao the promoters will be infuse Rs3 crore equity this
year taking the total capital to Rs15 crore. An additional
Rs15 crore investment is planned over the next five years.
a turnover of Rs25 crore this year, Rao talks about the
company''s plans and prospects. Excerpts
is your reading of the Indian cookie market?
India is largely a biscuits market whose size is estimated
to be around Rs6,500 crore. The total premium cookie market
(cookies that retail at Rs400 per kg) is around Rs40-50
premium cookie market is growing and so is Australian
Foods India. The segment is attracting new players like
Unibic biscuits and also the biscuit manufacturers, who
are expanding their product range to include cookies.
The new players help in growing the market. In Bangalore,
where one major cookie company is headquartered, we are
growing annually at 20 per cent.
18 outlets you have today are far below the earlier target
of 40 outlets by 2003. Why there is a delay in increasing
Our business model is linked to malls. Our stores will
succeed in high footfall areas and malls offer that. We
are waiting for the completion of malls with whom we have
signed up for leasing space. Some of the mall projects
we have signed up got delayed which affected our plans
to some extent. Our present target is to have 75 franchisee
outlets in five years time.
your expansion plans include setting up a new commissary
to the existing one in Chennai?
Our installed dough making and baking capacity is 4,000
tonne per annum (tpa), which can cater to the needs of
70 outlets. We are looking at a new kitchen in Central
India over the next two years, depending on the growth
of malls and our setting up stores there. We intend to
set up a commissary with an annual capacity ranging between
2,000 to 3,000 tpa. Presently we transport our dough,
frozen at 18 degrees, for which the shelf life is nine
are your market segments?
Our target is individual as well as institutional. In
the institutional segment we supply to a couple of hotels,
full service airlines and also cater to the corporate
gift segment. The last one is a big market for us as nearly
40 per cent of our total sales happen during Diwali and
outlets like yours the initial purchase is largely on
impulse. How many of the impulse purchasers have turned
in repeat customers?
I don''t have a straight number. When measured indirectly
we see a large number of repeat customers. For instance
in Spencer Plaza, our first store opened in 2000, the
free samples given averages around 240 every day which
is low since in a new store the samples will be three
times that size. However the Spencer Plaza outlet does
50 tpa and the number of customers average around 1.2
lakh per year.
repeat purchases in the corporate gifting segment a challenge?
That is true to some extent. But corporates do not go
for one product alone when it comes to gifting. They too
divide their target people and distribute gifts accordingly.
the corporate segment we have to undertake concept selling.
Why not cookies instead of sweets and dry fruits during
the Diwali and Christmas gifting seasons? Unlike sweets
and dry fruits, we can custom design our tins. For instance
we designed a blood-red heart shaped tin for a company.
We are proud to say Cookie Man cookies continue to occupy
the premium gift space amongst the corporates and we do
get many repeat orders every year.
is your reliance on advertising?
During the last seven years we have booked just one advertisement
space. We are about exposure and not recall. For us giving
free samples, placing the cookie directly in the hands
of customer, is the best marketing tool.
also hold baking competitions in schools, in which in
turn creates strong product awareness and recall, not
only among the students but also their parents.
you have any plans to set up outlets in the neighbouring
Sri Lanka is on our radar. But that will happen only after
we establish our presence in 20 Indian cities.
cookies have high fat content, do you have any plans to
introduce diet cookies?
will launch fat-free cookies. The cookies will be 97 per
cent fat-free. Also we will launch a cookie for diabetics.
Today we make 48 varieties of cookies. The sales mix comprises
crispy and crunchy cookies that make up for 60 per cent
of the sales; super cookies and choco-dipped cookies,
each of which contribute 15 per cent of our volumes and
cream-filled and special varieties that contribute 5 per
cent to the sales.