I write this today because I feel like I need to. And I want to share things I have learnt in the last 6 months because I believe it will help someone out there in some random way (Wishful Thinking).
It’s been exactly Six month since I bought Coffee Point from its previous owners. I had started researching on Nepali Coffee Industry about a year ago. It was while my travel to the district of Kavre that I had discovered coffee in Nepal, Kavre’s soil is volcanic red and thus the name, RedMud. Buying this business knowing it was struggling, was a challenge and I had decided to take it on. Without any prior knowledge of where to procure supplies and without help of anyone experienced in this field guiding me I took the plunge.
Six months have passed and I can proudly say I have survived so far in a coffee market where people cannot yet pronounce “Cappuccino” correctly. It’s a challenge really at times educating my customers about the coffee I am serving. It’s even more difficult selling them coffee that’s grown in their back yard because they love and esteem everything foreign. If it’s a foreign brand IT HAS TO BE GOOD concept. I have done a lot of homework and tried my level best to serve good Nepali coffee at the most cheapest possible price. Running a business that deals with people and their taste and sending them away satisfied is a challenge. I like challenges; I am just like that, I am a Capricorn.
Why the people who can afford to drink coffee need to start doing so?
According to the National Tea and Coffee Development Board (NTCDB), the annual demand for Nepali coffee is more than 4,000 tons while production stands at 400 tons. How are we to expect foreigners to drink our coffee when we have not learned to enjoy it first? There is a steady growth in the demand for locally grown coffee and there are enough people in Nepal who now know what Starbucks is and have a taste for good coffee. But they will willingly pay over $5 for a foreign brand but a Rs. 95 cup of pure Nepali GOODNESS is expensive, I might be missing a link here.
If the local demand grows so does the supply and eventually that huge gap stated by NTCDB come closer. More and more farmers will start taking up coffee cultivation as a serious means of income (Cash Crop). I hear and see people bragging about how they are planning to export Nepali coffee but I clearly don’t see where the coffee is? We don’t have enough coffee yet but it sure can change quickly.
The young and the trendy..
When I was a student at White House College studying my Bachelor degree my mother used to give me Rs.500 as a whole week’s allowance. That left me with Rs. 100 to spend or save each day. Today my cousin gets over Rs. 2000 for a week and she has just completed the SLC exams. Meaning, the spending capacity of a 15-year-old today is about 4 times what it was for me about a decade ago. Himalayan Java was the only specialty coffee outlet back then. Now we have over 100 gourmet coffee outlets only inside the valley.
Establishing a Company
After over 90 days of grueling negotiations with previous owners we finally came to common terms. On December 16, 2012 they handed me the keys to what was then a failing business. By December 31, 2012, I was formally registered as RED MUD COFFEE PVT.LTD. I had seen how my friends were running multiple coffee shops in Pokhara and doing it quiet well. They took me around and showed me a few ins and outs of this business to start with. But I had not thought in my wildest dreams that the venue I had used to shoot some of my videos to promote my brand would one day be mine. I had transported over 30 kilos of coffee from Pokhara and started to market it to my friends and family initially. It worked somehow but I really did not have a concrete plan as to what I was going to do next. I had no money in my bank account and I was starting to lose grip of reality and of course the frustration started to creep in. Then came the news that the Coffee shop I frequented in the evenings as a customer was actually up for sales. With no money and just sheer determination I started to show the shop to people I thought could help me acquire it. No one seemed interested at that time. But I was also involved with the GREEN SOLDIERS at the same time. The more I went to Swayambhu to clean up with the purest of intention my obstacles got cleared one by one. An idea came to life and something I had so casually started as a freelancing project was live and breathing in front of me. With help of few good friends, people who had faith in me and a lot of running around I got what I had set my eyes on.
No Space to Breath
Costco or a Sams Club in USA has catered to business owners and their needs so very correctly. Everything under one roof. Such is not the case in Nepal. You will have to run all over Kathmandu to find out who’s got disposable cups and who sells sugar sachet at the best price. Then you’ve got to deal with the people who directly or indirectly affect your business. The boy who delivers milk at his own casual pace to the landlord who wants 3 month rent in advance before I have sold a single cup of coffee. There is no space to breathe sometimes. And at times my temper would get the best of me. It’s very difficult to have worked in the USA and to expect same level of customer service in Nepal. It has taken me 6 months and more to get to terms with the way things work in Nepal. I seldom get angry at anyone and I have started to call everybody “Sir” and vice versa.
No other way to teach but demonstrate
Another challenge was training my staff. Especially about hygiene and why it’s the utmost priority to me and my customers. I remember an incident where one of them told me “Dai, if we give people Jar ko Pani hamlai Ghata bhai halcha ni” . Somewhere in his mind he is calculating profit and Loss which is not his job. I explained to him that it was my job to do the calculations and his to give the best service he can to anyone who walks in through that door. There is no other way to teach than by demonstrating. I became a waiter, cleaner, cashier; accountant, designer and I still continue to do that. I treat my boys like I was friends with them and I scare the shit out of them when I have to. It is very important for me to explain to them what I envision because I believe it is equally necessary for them to do the same only then I think we can achieve similar goals.
Red and Muddy Experience
I have met a score of young guys who went to the Arab countries worked in a Starbucks outlet and came back home and opened a coffee shop. The Starbucks model does not work in Nepal.Not Yet. Then you have the ones that have been abroad and come asking for a FRAPPE at my shop. The way I look at the coffee market in Nepal is that it has been segregated to just foreigners and the foreign returns. COFFEE is NOT FANCY. And it does not have to be. Coffee is grown in my grandma’s backyard in Kavre how can it be expensive? Its became expensive because the farmer who grows the cherry in his field gets Rs. 45 a kilo but the guy who brings it to my shop in a packet gets over Rs. 900 a kilo. This gap is too wide. All coffee shops in Kathmandu are designed like they were only built to cater to corporate clients and rich people. I beg to differ. I have done my level best to make the place approachable to just about anyone who wants to approach. The cheapest coffee in my shop is Rs. 70 and I advertise it like that.
The Loyalty card Funda works for every coffee shop. I had one when I was in college and I used it to its best use. In six months we have tracked over 500 cups given away for free and a concept that has been proven to work worked for me aswell. Some customers needed some explaining but some just rejected it. There was a guy who drove in front of my shop in a fancy car, carried a fancy mobile phone and had two Lattes and a pastry. When he came up to the counter to pay his bill he asked for a discount. I said to him that we do not have discount because we sell the coffee at the lowest possible price and that we had the “Loyalty card” instead. He actually somehow felt insulted and gave the cards back to me in a rude manner and left the shop. I was clueless. But the card was a success and customers still ask for it.
Coffee is not enough (unless the shop in your house)
Simply selling coffee itself was not enough to keep me afloat, I had to diversify. Initially I tried to outsource the food sold in my shop. But this was just another challenge because the people I was outsourcing were not at all consistent. Nepali business owners need to start understanding business relationships a little more. Making money now and not caring about long-term impacts was not helping both of us. Thus I teamed up with my longtime friend and school mate Pravesh Humagain and my brother Ritesh Adhikari to open up RedMud Kitchen. Now I sell my own sandwich, burgers and fries. We are working on expanding our food business and product line weekly.
Since opening up we have made it to a few print media as well Friday by ECS Media did a half page review on us and they seemed quite content about our services and quality of food. TNM Magazine has named us as 3 best places to have coffee in Kathmandu.
Artlab : Ettikai:
Romel Bhattarai and Aditya Aryal of artlab are one of our most loyal customers and meeting these guys gave me ideas to somehow incorporate their ultra-modern and abstract art into my shop. This would also give me the “RedMud Touch” I was looking for. We redesigned the entire theme of the shop from SLEEK to a cozy place where you can come in and drink good coffee and get some work done. Along with that we exhibited an entire range of new doodle artwork and actually sold 40% of the art work within the same week.
The TTN Toilet
TTN Nepal is supposedly THE corporate house in town with multi-national companies establishing office inside it. With clientele it can brag about it should really focus on its infrastructure. Just visit the TTN toilet that I am supposed to ask my customers to use. The amount of rent they charge me entitles me to a clean toilet. How difficult would it be to hire someone for a few thousand rupees to just attend to the toilet at regular intervals? Aren’t we plagued by unemployment? Don’t even get me started with the waste management issues within this so-called ultra-modern complex. It’s a shame.
“Espresso Machine” needs a hell lot of Power, something we desperately don’t have in Nepal. This still remains the biggest challenge as yet to any business owner in Nepal. Batti-when will it become something we don’t have to think of as a hurdle? When When…
It’s all fun though. As long as I enjoy what I do, I will keep at it. Sitting here at this shop I meet people from all walks of life. I overhear conversations about multi-national projects and witness ultra-drama between two love birds. This coffee shop gives me all the anxieties but at the same time gives me purpose and joy I was looking for. We Nepalese tend to plan a lot and act very seldom on those plans. Everyone has the SOLUTION to your problems and advice that range from marketing tips to financial planning. But at the end of the day you decide what you want to do.