Four years after Monginis cakes vanished from shop counters in Kolkata, the bakery brand is now making a comeback in the city.
Monginis, owned by Khorakiwalas of Mumbai, exited Kolkata, one of its leading markets, in 2015, after 24 years of operations here, following differences with the then franchisee partner. The journey comes a full cycle with the 100-year-old brand re-entering the city market this month.
“We plan to open 60 shops, under the franchise model over the next two months here in the city. The target will be to have 100 by the end of this fiscal,” Zoher Khorakiwala, Chairman and Managing Director, Monginis Food Pvt Ltd, toldBusinessLine.While the first phase will see expansion within the city, the second phase will see it enter the suburbs and non-metros of West Bengal.
The company has already set up a centralised unit in the eastern fringes, Kasba Industrial Estate, and will look to ramp up its portfolio with chocolates and other savouries. Bakery products, cakes, and quick snacking items will continue.
Huseni Khorakiwala and family bought Monginis in the late 1950s and started expanding it through franchisees. It entered Kolkata in 1991 with Switz Foods as the partner here. However, in 2015 differences cropped up over the latter “cross-selling” some competing products, through Monginis shops.
The Khorakiwalas decided to move Monginis out for the timebeing. There was also a three-year non-compete agreement (beginning May 2015), which meant that the bakery brand would not set up shop here for the stipulated time period. Challenges for Monginis are high. At the time of its exit, the region (West Bengal) accounted for nearly Rs. 70-80 crore of its revenue, a substantial part of its turnover then. Today, Monginis’ topline is around Rs. 450 crore (with nearly 25 per cent of it coming from operations in Egypt) and it has 850-odd stores across the country; but the Kolkata-market has seen competition grow. First, Switz Foods — its erstwhile franchisee partner — set up their own brand, Mio Amore. All of Monginis’ stores were re-branded as Mio Amore. Secondly, there are a host of popular and local players that have found acceptance.
“The brand still has a good recall here, despite not being present for years. We do find some dedicated customers . We hope to create a buzz with the re-launch,” Zoher said.
Compared with Mumbai, where the average sale per store varies between Rs. 10,000 and Rs. 50,000 daily, Kolkata should, in the initial days, give the company average sales of Rs. 10,000 to Rs. 20,000 a day. “The challenge is to ensure a 5 per cent year-on-year growth in sales for the same store, as competition heats up. This is something we are working on,” he said. For FY20, the company has targeted a 15-20 per cent growth in turnover.
Monginis remains a debt-free company and Zoher intends to keep it that way. He has no listing or fund-raising plans.
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