Our role model should be a NepaliA US college dropout, Aashish Adhikari returned to Kathmandu in 2011 to start anew. While on a short trip to visit his grandparents in Kavre, he discovered that his ancestral lands were perfectly suited to planting coffee.
A US college dropout, Aashish Adhikari returned to Kathmandu in 2011 to start anew. While on a short trip to visit his grandparents in Kavre, he discovered that his ancestral lands were perfectly suited to planting coffee. As a coffee lover who often paid up to five dollars for a cup of coffee, Adhikari was deeply interested in starting a coffee plantation in Nepal. He wanted to grow coffee and export it to the world. However, this plantation never came to fruition. Instead, at the end of 2012, he stumbled into an opportunity to buy a failing coffee store in Thapathali, which he rebranded as Red Mud Coffee. More than seven years later, Red Mud Coffee now has five outlets in the Kathmandu Valley and one in Manang. In this interview with the Post’s Alisha Sijapati, Adhikari speaks about his career trajectory and future plans for his homegrown coffee chain. Excerpts:
What prompted you to venture in the coffee industry?
When I returned to Kathmandu, I knew it would be tough to get a job in any existing organisation due to my drop-out background. Hence, I joined my friend’s start-up company, an online radio forum. But I quit because I couldn’t find my feet in the market. I’d say for that time, the idea came too early. After my exit, I wanted to get into coffee farming and spent more than six months doing extensive research. With time, I realised that getting into agriculture without having a single farm would be extremely challenging, so I decided to focus more on retail. While travelling to various districts for research, one common factor was the ‘raato maato’, hence I named my company ‘Red Mud’. At the end of December 2012, I came across an opportunity to buy an existing coffee store in Thapathali. I knew this was a great deal for us and brought two partners on board—my brother and a school friend. We slowly turned the coffee house into a full-fledged café with a kitchen. With the success of the first store, we were already looking towards opening a second one when we came across Rockstart Impact. The programme helped us secure foreign direct investment from Dutch investors and we managed to open four different outlets across the Valley.
What were your initial challenges like?
The biggest challenge for any budding entrepreneur in the initial stage is to get access to capital. Just because one has a brilliant idea doesn’t mean it’ll be easy to get funds. The cost of capital is very high in an unregulated market and a regulated market will not entertain us who have nothing to put up as mortgage. It was only after two-three years that we got help from bankers. Nepali people love to undermine one another but thankfully, we had a Dutch partner who believed in our vision.
How have you handled competition so far? Were you selling your own coffee?
In Nepal, there aren’t many single farms, which can be a little complicated for retail brands like us. Coffee is collected by different farmers in a cooperative and for us, that becomes tedious when it comes to technical aspects such as roasting and packaging. That is why we have collaborated with a single farm—Plantec Coffee Estate in Nuwakot. It was a win-win situation as we need three tonnes of coffee monthly and they do it all for us. I did want to have my own farm but I realised it wasn’t feasible. In Nepal, the demand is more than the supply. There are cases where in the name of green beans, coffee beans are imported from India to meet the demand. For an established company like us, it is important
that we deliver a Nepal-made product that is of a high quality to our customers. It is always best to keep everything transparent, especially when it comes to business.
Plantec Coffee Estate in Nuwakot already has its own established brand—Jalpa Gold. Doesn’t that bring about conflict-of-interest in terms of business?
Unless they start coming up with their own cafés, I don’t think there will ever be conflict-of-interest. To be honest, it is a win-win situation for both of us. Although, they have their own brand, they haven’t managed to find a strong foot in the market. In terms of taste, every coffee brand has a specified roasting profile. In Nepal, most brands prefer either dark roast or medium roast coffee beans. However, majority prefer dark roast. We like the fact that Plantec is efficient and extremely professional about what they do. Many may not know this, but Himalayan Java is also partnered with Plantec Coffee. However, the difference between Himalayan Java and us is the brand presence in the market. We don’t want to diversify into agriculture. We are happy with retail. Over the years, I have realised that it’s better not to put your feet in two boats—be master of one, rather than jack of all.
How has coffee culture evolved in the Nepali market?
We have been involved in retailing coffee since day one. To be honest, at Red Mud, we have only had one percent of sales in terms of selling packaged coffee. People buy it as souvenirs. Although the coffee business has escalated in Nepal over the years, the demand is high and supply low. At the same, sales aren’t as expected. People visiting us have always been nice to us when it comes to our coffee. Our Nepalicino is popular among customers. Many didn’t like the strong taste of espresso and as a barista myself, I started my own mix, which eventually garnered attention from customers.
What is behind the aesthetic of Red Mud?
As an unemployed youth, I often flocked to various coffee houses. Some places I found comfort whereas elsewhere, I felt out of place. And when I opened my own store, I decided on creating a space that targeted different sets of people and yet, kept the brand tag line as ‘Every revolution starts from a coffee shop’. Over the years, Red Mud has helped many budding entrepreneurs start their business. Even getting inspired by young entrepreneurs, I started my own channel called Dui Paisa on YouTube to promote entrepreneurs. Nepali teachers need to stop showing Mark Zukerberg and Bill Gates as role models, our role model should be a Nepali.
Red Mud also offers barista training, how has that helped the business so far?
I was looking for a studio to shoot my podcast and came across a small room with a machine training students to make coffee. The barista training schools have boomed over the years. Every corner of the street now has a coffee house. There are many students going abroad. It was actually Himalayan Java that started training schools. At our training centre, we give out Speciality Coffee Association certificates to students. For us, the training centre is more of a talent scouting. Currently, 60 percent of Nepali students want to be here whereas 30 percent of them still want to move abroad for better employment opportunities. We take our training school more as a resource centre.