Creating Sweet Memories – The Story of Monginis

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Two Italian brothers started Monginis in the pre-Independence era at Fort in Mumbai. The set-up was more of a restaurant cum banquet hall catering to the rich and elite. Post Independence the brand changed hands to one Khurana family before being finally taken over by the Khorakiwala family. The restaurant cum banquet hall was refurbished into a departmental store by the name Akbarally’s but the cake and pastry counter was kept intact considering there were hardly any cake shops in the vicinity. Elaborates Zoher Khorakiwala, chairman and managing director of the company, “We did not close the cake counter as we thought it was an add-on to our departmental store. Also, we realized that it was attracting a lot many customers from across the city since the trend of cake shops wasn’t so prevalent then. Demand for our pastries grew and we started supplying them to the local mom and pop stores. We later discontinued as we realized that the shop-owners weren’t particularly paying much attention to the products as for them it was just an additional SKU. As time passed, we started getting enquiries for exclusive cake shops selling only our products, and that is when we took the expansion route and started having Monginis outlets at various locations.”

The first exclusive cake shop of Monginis opened at Bandra in 1970. The brand had clear goals from day one that their concentration would just be on product development and quality  while the retail expansion would be taken care off through its various franchise stores. Explains Khorakiwala, “We strongly believed that our expertise was in product development. For retail expansion, it was best to partner with people from a particular area where we wished to open our store. They would know the area much better than us and if they are investing in our brand, they would surely take utmost care to maintain their customers and keep them happy for the sake of  better business.” Currently, the company has just 4 company-owned-company-operated outlets. The rest 650+ outlets across the country are franchisees.

The manufacturing unit was still operating from Fort till they had about 30 stores. Post that, they shifted their factory to Marol at Andheri East in Mumbai. As the number of stores grew and the product category expanded, the need for bigger space made them shift their base to Andheri West in 1986 and eventually they opened their second unit at Thane in 2004. As offers from other cities started pouring in, the promoters thought of even setting manufacturing units in those cities on franchisee basis. The know-how was shared. Till they were dealing in butter cream, logistics was not an issue but the changing preferences of their customers made them shift to fresh cream. Shares Khorakiwala, “That is when the problem started coming in as we now needed a cold storage and also the supply chain had to be streamlined. We had no predecessors in this category to look up to and hence all that we did was from scratch. Bringing in international know-how and replicating the same to suit the Indian market, training the manpower to taking care of the maintenance aspect; all of it was challenging but a good learning experience.”

As Monginis spread itself in the market, the learning’s started coming in. Like the latent demand for vegetarian cakes. Soon the company started offering all-veg cakes to its patrons and today more than 60 per cent of their business comes from veg-cakes. Says Qusai Khorakiwala, a third generation scion of the Khorakiwala family, “Though we have veg cakes, it is still a challenge for us to get into the houses of people where the older generation still believes that a cake cannot be all-veg. We are directing a lot of our efforts to do away with this myth. Our major competition comes from mithais and we still have a long way to go when cakes and pastries will replace mithais.”

Since the last seven years, the company has been actively taking interest in the open market business. Elaborating on the same, Qusai says, “Seven years ago, Monginis was entirely focused on one business unit which is the cake shop business – which is a centralized manufacturing unit for cakes and pastries supplying to various satellite stores. The cakes usually have a shelf life of two to three days and the unsold cakes are returned to the factory. This second line of business is the open market which is long shelf life cakes and which go to the other formats of retail outlets other than just the cake shops. Five years ago, it was only the Western part of Maharashtra and parts of Gujarat but now we cover over 17 states across India and reach to over 1000 distributors. We also have been actively looking at our third line of business which is the ecommerce business. We have developed cakes which remain fresh and intact for three days and have  tied up with Blue Dart and FedEx. They deliver cakes within 24 hours. An extremely unique packaging has been designed by us which thaws the frozen cake on its way in span of 24 hours.”

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Qusai strongly feels that when it comes to food, ecommerce still has a long way to go. Elaborating further, he says, “Today, ecommerce business is the fastest growing but in this category, food perhaps comes at number 8 or 9 and within this, cake probably comes right at the bottom. But it is just a matter of time, till people will get accustomed to buying and ordering cakes online – either for themselves or as gifts.” As on today, Monginis has around 5 thousand visitors everyday to its ecommerce portal and about 1500-1700 orders on a daily basis.

Qusai is modest enough to say that attracting the youth is difficult. “Youngsters! Distracted minds, its difficult to keep them engaged. Well, there isn’t much that we can do to keep them attracted. Our focus is not the youth. It is mass market – the middle and upper middle class. Today, almost 78 per cent of population in India is vegetraians. Cake has a perception of being non-veg. I am not targeting the demographics. First, I need to change the perception that cake can be veg. We have got approval from Vegan Society. To market our veg offering, he have danglers, posters and also do a lot of in-shop branding.”

Sharing his views on maintaining the leadership position, he says, “It is difficult to maintain the number 1 position. Nationally you can achieve that, but locally it is very difficult. I am strong in numbers. We prepare around 40,000 pastries a day, 10,000 birthday cakes and approximately 3 lakh muffins a day. No other player can beat this kind of production that we have.”

The terms and conditions for franchises are very simple. All that the interested partner needs is a decent space, Rs. 1.5 lakhs as refundable deposit, Rs. 25,000 as non-refundable deposit and about 5-10 lakhs on interiors as per the space that is there. Minimum that Monginis looks for is 200 sq.ft of space. A special franchisee cell is there for quality check which ensures that the outlets keep only fresh products thus ting care of the brand image which has been maintained for over half a century today!  With all the back end well in place, the one thing that the company needs to strictly look into is the standards followed by their franchise outlets who more often than not resort to selling stale stuff. Personally, I have always had a not-so-good experience with the brand!

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10 thoughts on “Creating Sweet Memories – The Story of Monginis

  1. 1.500-1.700 daily basis is great. In here, with 4 companies, 600-1.000 is the daily basis. So many competitors in the same field. Love to read your posts. Thanks.

  2. Hi! Is there a chance you would know who handles marketing and brand communication for Monginis? I have been a big fan of the retail chain. I think the only thing they lack is a robust feedback mechanism. So many bakery/pastry chains come and go, but these guys have been consistent and growing for a long time! I think they are a great example of longevity for any young and upcoming retail chain.

  3. Hello, that was one great article! Congratulations.
    Need a little bit of help.
    Could you tell me what all licences, Acts and permissions had to be taken by Monginis in order to start this business? Or in general, if you could tell what all permissions are required to start a bakery?
    Thanks.

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