Now, Chennaiites can really go Mad Over Donuts

NARAYANAN V Chennai | Updated on December 03, 2019 Published on December 03, 2019

Tarak Bhattacharya, CEO , Mad Over Donuts

The Singapore-based gourmet chain plans to open five retail stores in the city

Chennaiites will now say “Mmmm…doughnuts” drooling like Homer Simpson as the Singaporean gourmet doughnut brand Mad Over Donuts (MOD) is all set to enter the city market with five retail stores.

“Chennai is the fifth city where we are opening our business. People here are affluent and well-travelled so there is ample opportunity to start our business here,” Tarak Bhattacharya, Chief Executive Officer, Mad Over Donuts told BusinessLine last week.

MOD, which rolled out its first retail outlet in Noida in 2008, currently has 65 stores spread across Delhi, Mumbai, Pune and Bengaluru.

“We have already run test rounds in Chennai and people liked our product and we are very confident that the city will welcome us with open arms as did other cities,” he said.

MOD operates as mother-kitchen and satellite store model. Under this concept, a kitchen prepares the donuts and sends them to various satellite stores where the gourmet elements like glazing, filling and toppings are done in front of the customers. A mother kitchen can typically feed 6-7 satellite stores.

In Chennai, MOD will launch its first outlet (with mother kitchen) in VR Mall followed by The Marina Mall on Old Mahabalipuram Road, Gateway Office Park in Perungalathur, Phoenix Marketcity and The Forum Vijaya Mall in Vadapalani.

Vertical expansion

MOD is known for its vertical expansion, it opens more outlets in few cities rather than spreading horizontally across multiple cities. After opening 35 stores in the first four years, MOD took a long hiatus from expansion to focus on promoting the brand and making the existing stores profitable.

“Two biggest challenges that we have always faced is the cost of real estate and getting the right kind of people to run our stores,” Bhattacharya said adding that the donut maker spent three years training and incentivising its employees, strengthening its back-end and supply-chain and resumed expansion from the eighth year onwards.

“Chennai and Hyderabad are the two prominent names that came to our mind when we thought about expansion. Now that we are opening in Chennai, our next stop will be Hyderabad followed by Kolkata,” Bhattacharya said.

MOD intends to increase its retail store count to 100 by December 2020. Its retail stores are distributed between malls and highstreets shops in 70-30 ratio.

Currently, around 25 per cent of its delivery are through online aggregators such as Swiggy and Zomato, Uber Eats and MOD’s own channel.

“25 per cent (through online aggregators) is decent enough for us. This has given influx to the consumption of donuts because if you go to Swiggy or Zomato the highest consumed desserts after ice cream is donuts,” Bhattacharya said.

On competition from other donut brands like Dunkin’ Donuts and Krispy Kreme, Bhattacharya said, “I don’t see them as competitors because Dunkin or Krispy opening more stores will help both of us as consumption of donuts will increase and people will start seeing donuts as a category.”

In smaller cities

The donut brand also aspires to foray into Tier-2 cities such as Coimbatore, Jaipur and Indore. “On an average, we have opened 1.3 stores in the last 6 months. We will open two stores a month from April 2020 to establish our presence in more cities in India,” he said.

Mad Over Donuts, which sells around 30,000 donuts per day across its 65 outlets, has zero bank borrowing or external debt. All the retails stores are fully profitable.

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Published on December 03, 2019
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