Multi-million-pound restaurant chain Coconut Tree to open flagship outlet in Colombo

From left: Coconut Tree Marketing Director Helen Cohen, Co-Founder & Finance Director Mithra Fernando and Group finance & Procurement Manager in Colombo  Prabath Somasekera
Pic by Pradeep Dilruckshana

By Nishel Fernando
Cementing its Sri Lankan roots as an authentic Sri Lankan brand, the Coconut Tree, a multi-million-pound restaurant chain specialising in Sri Lankan cuisine and beverages plans to open its flagship restaurant in Colombo within next three months. 

“We want every Sri Lankan to know about this brand, because we can’t call this a Sri Lankan brand if Sri Lankan don’t know about it. For example, when we go to Germany, we don’t want Germans to think this is a British brand serving Sri Lankan foods, but as a brand coming out of Sri Lanka. So, we are in the process of opening a restaurant in Sri Lanka. We are planning to open it within next 2-3 months,”Coconut Tree, Finance Director Mithra Fernando told reporters in Colombo recently. “Finding the right restaurant at the right location and right cost is quite important. We want it to be the flagship store, the jewel in the crown. At the same time, we are running a commercial business, so we don’t want to run it with losses,” he added.

The Coconut Tree was founded by five Sri Lankans; Mithra Fernando, Rashinthe Rodrigo, Dhanushka Fernando, Praveen Thangiah and Shamil Fernando in Cheltenham, United Kingdom, in 2016. Since then, it has emerged to become a multimillion-pound business serving uniquely Sri Lankan cuisine and beverages in nine locations in UK. The revenue is projected to reach 10 million Sterling Pounds for this year.

According to Fernando, Coconut Tree is considering two sites at Dutch Hospital and Park Street in Colombo to set up its flagship restaurant while discussions are on-going with two possible parties to partner up, which includes a cricketer.  In particular, he highlighted that Coconut Tree is looking for local partners who have experience in bar operations.

“I know Sri Lanka can be a challenging market when it comes to bar operations, so we are looking for someone who has some experience in this,” he said. Meanwhile, Coconut Tree is also actively seeking investments from Sri Lankans including Sri Lankan expats to fund their planned expansions in UK this year. Accordingly, the company is seeking 150,000-300,000 sterling pound investment per restaurant under managed franchise model to open 4-5 restaurants in London this year, offering a projected return on investment of 30 percent. In 2024, Fernando noted that the company would also be opened for 100 percent franchises as it sets eyes to expand in to mainland Europe starting from Germany and beyond 2023. Meanwhile, Coconut Tree is in the process of increasing sourcing from Sri Lanka from the current 30 percent to around 50 percent by end of this year with plans to source 100 percent of all ingredients in the long run. Fernando highlighted that Coconut Tree is ‘probably’ the largest servers of  Lion Beer and Ceylon arrack in the UK with monthly consumption of Ceylon arrack and Lion Beer estimated at 5, 000 bottles and  four pallets respectively. 

In addition, the company also works with local producers in Sri Lanka such as Ma’s Kitchen and various other small suppliers to source their spices and other ingredients.