EconomyFinancialThe strategy to grow without depending on OXXO

The strategy to grow without depending on OXXO

Caffenio does not intend to compete with large multinationals. The Sonoran company considers that the key to its growth in the coffee industry lies in another segment: consumption outside the home, with coffee ready to drink.

This was not always the case, the Mexican firm –which has been in the market for 80 years– began selling through grocery stores and supermarkets in the north of the country. Its pioneering brand was Combate, which, years later, would be accompanied by Café Único, a product with which the company entered the soluble coffee category.

But in 2000, the company took a 180-degree turn. After 60 years of history, it considered that its business model and strategies should change in order not to be left behind in the market and achieve greater consolidation. Thus, he decided to put the product in the glass to focus on the end consumer.

The efforts resulted in the creation of the Andatti brand, which opened the doors of the Oxxo convenience stores, operated by FEMSA, and in the opening of its own stores for the sale of ‘car consumption’, under the Caffenio brand. Today, the Sonoran portfolio also consists of Baja Sur, a French-roasted coffee beans that are marketed in Baja California.

“The marketing strategy focuses on developing business segments to serve specific customers. We have focused on the ready-to-drink coffee market. In the retail channel we do not compete ”, explains José Antonio Díaz Quintanar, Caffenio’s CEO.

A change of course that helped him find his space. “The coffee industry is already very saturated and Caffenio is struggling to grow without competing directly with the big boys. Its strategy is niche, people who seek immediacy without paying too much ”, says Juan Manuel Ramírez Belloso, general director of Business Training at the Escuela Bancaria y Comercial (EBC).

So far, Caffenio’s most important channel is Oxxo, even with the pandemic, which for the coffee maker meant a 25% drop in sales at the end of 2020.

Díaz details that his worst hit segment –with losses of 80% – was that of consumption centers, such as hotels, restaurants and offices. Meanwhile, revenues from the online store grew 50% and the drivethru shops (delivery car), 30%.

The company lowered its sales revenue by 10% compared to 2019. But the Sonoran company already has its recovery and growth strategy ready: starting next year it will open three drive-thru stores monthly, with an investment of 4 million pesos per opening.

In addition, Caffenio has digitized the consumer experience and developed an application that allows you to check the location and hours of all its stores, the menu, the prepaid balance and wallet, the purchase of drinks, food and promotional items, as well as to make recharges in My Caffenio, your loyalty program. “During the contingency due to covid-19 we adjusted our order screens and applied the automatic sanitation service, which was carried out after each purchase,” explains Díaz.

The own points of sale have an artificial intelligence system with which the operation of the coffee vending equipment can be remotely monitored. This system-programmed monitoring ensures product quality, efficient equipment operation, and reduced waste. It also optimizes staff time in the store. In 2020, the company managed to reduce the waste by 40%.

Currently, Caffenio has 120 points of sale distributed in Sonora, Sinaloa, Chihuahua, Baja California and Durango. “With the growth of our own points of sale, we hope to generate between 50 and 60% of revenues by the end of this year,” says the manager.

The intention is that its own stores will become more prominent in the northeast of the country, without neglecting its other distribution channels or the main essence of Caffenio, which is the sale of coffee by the glass.

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