This Coffeewala makes 2 lakhs/month in a tier 3 city in India!

Today we are going to analyze the business of Sairam Coffeewala!

This business is situated in the heart of Sangli alongside the Sangli-Miraj Road.

First we will understand the business and then we will have a little chat with the founder!

So what is the product sold by Sairam Coffeewala?

Filter Coffee and Bun Maska (Products at Sairam Coffee)
Filter Coffee and Bun Maska
Cold Coffee (Products at Sairam Coffee)
Cold Coffee at Sairam Coffee!

They have 3 products:

  • (Hot) Filter Coffee
  • Bun Maska
  • Cold Coffee

What is the pricing of these products?

Filter Coffee₹20
Bun Maska₹20
Cold Coffee₹40

Sairam heavily focuses on the products they offer. They have very few products, but very good ones.

Who is their customer base?

Sairam Coffeewala is located near 3 colleges and there are 2 more colleges within 5 kms. And there is major student housing in that area.

A large portion of the customers is students and young adults. The age group is 18-28.

Majority of the customers come in groups or couples. People visit Sairam Coffee to sit and discuss things. Eating/Drinking is the secondary purpose.

Other than students, commodity traders from nearby Market Yard and stock market traders are found hanging out the place around 3:30 pm.

In the evening, there is large amount of traffic at the shop.

What is the Moat? (Competitive Advantage)

  • Location
  • Crowd / Community

Do they have any pricing power?

No, not very much. Currently Sairam Coffee is charging market rates only for the products they are selling.

But I believe that they have positioned themselves such that increasing the price of the main product (Filter Coffee) from 20 to 25 would only benefit them as their Moat is the quality of their crowd.

So I think that they will eventually increase the prices from 20 to 25 and 40 to 50 for their product.

Anything more than that and it will hamper the business as they will start loosing business to other places.

So now let’s talk with the founder:

Hello! Please introduce yourself!

How did you come up with the idea of starting this Coffee truck?

What challenges did you face in the early days?

How did you end up choosing these products, packaging, pricing and location out of the universe of products and places?

Did you take out any loans or raise equity capital for starting this business?

What systems and processes have you set-up for the business to be able to operate without your presense?

You closed shop and took the team members to a trip to Goa recently! Tell us more about it!

What are your future plans? Franchise? CoCo? Urban Markets vs Rural Markets?

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