Tarak Bhattacharya, Executive Director and CEO, Mad Over Donuts, says consistent quality is the USP of the brand, which grew significantly during the pandemic, and explains why health concerns should not come in the way of an ‘indulgence product’.
Please take us through the evolution of Brand Mad Over Donuts (MOD) as you have seen it over your last 10 years with the company.
In 2008-09, we were testing the donut product and thought that the market will be good to start up in China. Then we realized that such a scalable product may not be existing in India. That's how we chose India to be the launch place. Before that, it took almost 18 to 20 months of trial to get the product right in Singapore, where we have experienced chefs. Initially, the product was non-vegetarian. But then we realized that acceptability of veg products is far higher than non-veg in this country. So, it became eggless and a veg product.
Initially, the idea of selling a donut brand was not acceptable to a lot of companies, especially malls, in India, thinking that how will so much of donuts get consumed? But we were confident as a brand, and about the product, that it can be a scalable property because we can store the product for a considerable amount of time. Our first store was in Delhi, as a mother kitchen where we actually showcased our product from being a dough to a donut. People could actually see how dough gets into a donut shape. That was the concept and it became easier for us to market the product as well. Then we launched in Mumbai with a store at Breach Candy. That is where acceptance happened. People really liked the product. We began expanding our stores. For the last 10 years, we have been serving the same product, its quality remains consistent. We have added innovations such as mango donut, or Christmas donuts or Diwali donuts, and these helped the brand in a big way. We listen to the customer and deliver whatever customers ask for.
How did you strategize to make the best of business during the pandemic? And to what extent have you recovered?
We started our own deliveries and also delivered through aggregators. We tied up with many cloud kitchens in the country and doubled our size during the pandemic. Now we have gone form 60-70 stores to 130. Now we are doing double digit sales figures, equal to 2019 sales.
Donuts as a category does not have a sizeable market in India. Besides, Mad Over Donuts has competition from local and international brands such as Dunkin' Donuts, Krispy Kreme and even Starbucks and Theobroma. Despite these, what are the factors that have helped you stay relevant?
You are right - people have been used to buying donuts from cafes or bakeries. The market for desserts from the bakery was not very big until about 4-5 years back. Consistency of the product helped us a lot. Even today, we get our product mix in the right recipe from Singapore. We don't use any local products. That is how we could keep our product quality consistent. Only the chocolates for topping, etc., are from India. The strategy for us has always been that donut will be our hero. We also ensured customer engagement with flavour festival days and donut deals where we actually sell at half the cost and thus have new consumers endorse the product. We have Orange T-shirt activity where people actually queue up outside during a new store launch as we give out free donuts to our first 100 customers. Such engagement also helped us stay afloat in the market.
Do you foresee any challenges considering the increased health awareness post pandemic, and that donuts are in the junk food category?
I think it is a self-indulgence product, and when you indulge, you don't count calories. Indians per se have a sweet tooth, and the bakery business is becoming big day by day. Also, we are not saying that we do not want to do anything on the health front. There is a provision for sugar-free donuts, we are trying to do gluten-free donuts, vegan donuts soon. But since we Indians have a sweet tooth, we won't mind having a donut once in a while!
How do you define your target audience - is it only children or are you looking at any other consumer segment?
I think 6 to 60, everybody has a donut these days. So MOD has created that segment especially. What was niche once upon a time where people from only A or A+ category used to have donuts is now a universal product. It is also used for gifting. Slowly we are getting into a market where it’s become more of an everyday product, every time product, every noon product or day product or night product.
Where do you see opportunities for growth?
Having cloud kitchens is one of the growth opportunities that has emerged in the last couple of years. The hybrid model of offline-online is a growing category too. We intend to open more offline stores in malls and in high streets. Obviously opening more cloud kitchens are in the pipeline. As for product portfolio, we have 20-25 kinds of donuts in the menu. Then we have eclairs. We have small bites, which are a great gifting option. We have waffles, coffee and milk shakes.
Donuts contribute 70% to our business, while coffee and beverages contribute 10% and small bites, eclairs and waffles contribute 15-20%.
