“Coffee day” Journey of Indian

coffee Industry

AADITYA NAGPALBHAVUK SINGLAAAKASH SALUJA

COFFEE-HISTORY

The Indian contest of coffee started with an Indian Muslim saint, Baba Budan in 1670.

He smuggled seven coffee beans from Yemen to mysore in India and planted them on the Chandragiri hills in karnataka.

It spread to other areas of Mynad in kerala , Shevaroys and Nilgiris in Tamil Nadu

In 1942, indian government decided to regulate the export of coffee under the COFFEE BOARD OF INDIA

COFFEE-STORY Previously only a South-Indian drink

Confined to the Rich Brahmin class

Places for lawyers and educated class to hold

discussion.

The drink has now become more of a concept

COFFEE-STORY

Café bars have flocked like CCD, Barista, etc

Became famous and even 5 star hotels started cashing on it.

Coffee house started emerging at various places in the country.

COFFEE SECTOR IN INDIA

The 6th largest producer of the coffee in the world.

Indian coffee has created a niche for itself in the

international market.

Arabica coffee from India is also well received in

international market.

Coffee production in India: Karnataka, Kerala and

Tamilnadu.

which contributes about 99% of total coffee production

INDIAN COFFEE

Indian coffee has a good reputation in Europe for its less acidic and sweetness of character and thus widely used in Espresso Coffee, though Americans prefer African and South American coffee, which is a more acidic and brighter variety.

COFFEE CONSUMPTION

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COFFEE CONSUMPTION

Per capita consumption of coffee is just 85 grams in compare to other countries.

In the annual output of 300,000 tons, domestic consumption is only a third(100,000 tons)

India is predominantly a tea drinking nation.

Coffee is a staple only in the southern part of the country

GLOBAL COFFEE GIANTS EYES ON INDIA

Market expansion on a faster rate

Urbanization is expanding

Coffee drinking – Fashion

Growth in the disposable income

MARKETING SITUATION

Niche coffee retail formal is growing at 10 to 12 percent a year

Organized coffee retail business-Rs 25 bn

Coffee consumption in India has increased from 55,000 tones to 75,000 tones in the last three years

3 % of the world coffee production

Export 80 % of the total produce.

“ I may be young, But please take me Seriously”

Youth – between 15-35 years

Students form a majority of customer base

Likes to be in group

Likes to sit, talk and relax

Drinks a cup of Gourmet coffee with added flavours

prefers snacks rather than meals

TOP COFFEE BRANDS IN INDIA

• Nescafe

• Tata Coffee

• BRU

COFFEE BOARD OF INDIA

This is managed by the MINISTRY OF COMMERCE AND INDUSTRY.

This board was setup by an act of Parliament in 1940.

The coffee board duties include-

1. Promotion, sale and consumption

2. Conducting coffee research

3. Financial assistance to small coffee growers

INDIAN COFFEE HOUSE

The first Indian Coffee House was opened in New Delhi on 27 October 1957.They also serve dosa, sandwich, icecream,idly,etc at a very low price.This is an affordable place.

INDIAN COFFEE HOUSE The Indian Coffee House chain expanded across the country, with branches in Pondicherry, Lucknow, Nagpur, Jabalpur, Mumbai, Kolkata, and Pune by the end of 1958. These coffee houses in the country are run by 13 cooperative societies, which are governed by managing committees elected from the employees.

It was in the golden soil of Chikmagalur that a traditional family owned a few acres of coffee estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading Company Limited, popularly known as Coffee Day was formed.

CAFÉ COFFEE DAY

•Known as Amalgamated Bean Coffee Trading Company Limited(ABCTL)•Started by V. G. Siddhartha in Brigade Road, Bangalore, 1996 •1497 company owned outlets in 200 cities• Largest organized retail coffee chain in India•ISO -9002 certified company.

PRODUCT

• Grows the coffee it serves in its cafes • Well-equipped roasting unit • The eatables catered by different vendors -Ice creams- Cream Bell -Milk – Amul-Snacks from local vendors• Sells merchandise through its stores.• Enjoys trust for quality, hygiene and consistency

of food.

PRICE

• Affordable prices. • Price for a cup of coffee ranges from Rs 50 to

Rs 200• Only minor changes in the pricing policy due

to changes in Govt. taxes.

PHYSICAL EVIDENCE

• Logo - Larger font- Emphasis on the word CAFÉ. - Red signifies leadership and passion. - Swirl for purity of purpose and the feel of coffee.• Architecture and décor-uses bright colours and

interiors according to the youth.• Designing of pamphlets posters and menu to

attract the youth.

PROCESS

• Ordering and delivery earlier was self service and now most of the coffee shops have waiters to take order and deliver at the table.

PEOPLE

• Emphasis on motivation and personal skills of the people.

• Friendly waiters and services.• Employees follow international standards of

hygiene, cleanliness and personal grooming.• Reward Schemes like “Employee of the

month”

PLACE

• Prime factor for success- Located at every possible location where business can be generated.

• Caters to target market with strategically placed outlet .

Eg-Located in high street, gas station and near colleges.

PLACE

• Metros • Tier-I cities ( Jaipur, Kanpur, Surat) • Tier-II cities (Mysore, Guwahati, Jamnagar) • Satellite cities and urban outgrowths

(NaviMumbai, Faridabad, Secunderabad) • To be expanded to Tier-III cities • Tie-up with Ginger Hotels of the Taj Group

POSITIONING AND BRAND IMAGE

• Brought café culture to India• For the youth: Young (AT HEART) customers,

young and friendly staff• Highest distribution network• Target middle and upper middle class• Age group 15-29

CONSUMER PROFILE

• Age group: 20-24 years- 37% 25-29 years- 27%• Gender: Male- 60% Female- 40% • Occupation: Students- 52%• Frequency of visit: Daily- 18% Weekly- 44%

CAFÉ FORMATS

Different café formats: - Music cafes-Books cafes-Highway cafes-lounge cafes -Garden cafes-Cyber cafes Latest addition: Lounge cafes

PROMOTION

Through SMS Valentine’s day promotion, “Café Coffee Day Luv Zone”Through Television • Held a contest around a very popular program on Zee

English called Friends. • They have tied up with Channel [V]’s “ Get Gorgeous

contest”. Ticket sales: They were involved in WWE, Elton John, and Bryan

Adams ticket sales

PROMOTIONTie-ups• Liril, AirtelFriends.• HDFC wanted to promote their debit card and they choose Café Coffee

Day. So 21 cafes have debit card machines. Association with movies • Bas YunHi • Khakee• Main HoonNaa• Socha Na Tha• MujhseShaadiKarogi

SALES PROMOTION• SPECIAL CAFÉ CITIZEN CARD

REBRANDING

• Earlier perceived as a place where intellectual meet • Positioned itself as a coffee bar and has maintained

that position for a long time now.• CCD saw a latent market in youngsters• For youngsters- CCD a fun place where one can go

anytime of the day and have fun with friends.• In 2002 CCD underwent a rebranding exercise.• CCD spent INR 1.5 billion to redesign existing cafes

(2009).

REBRANDING

OLD LOGO

NEW LOGO

DO YOU KNOW WHAT THE MAIN STRENGTH OF CCD IS?

“ Good Coffee at affordable price”

WEAKNESS

• Many of the CCD stores are incurring loses due to wrong site selection (national highways)

• Product is not able to compete with international chains like Starbucks, Costa etc.

CRITIQUE ON OTHER COFFEE OPTIONS IN INDIA

CAFÉ NESCAFE

Café Nescafe is a budget solution to the coffee demand. They use standard pre-mixes manufactured by NESTLE.

BRU WORLD CAFÉ

• Promoted by HUL• Mostly present in Mumbai, as of now• Most direct competition to CCD

MAJOR PLAYERS IN INDIAN COFFEE INDUSTRY

• Café Coffee Day• Barista Lavazza• Costa Coffee• Coffee Bean & Tea Leaf• Starbucks Coffee• Gloria Jean’s Coffee• Dunkin Donuts

NO OF STORES

Café Coffe Day (1174)

Barista Lavazza

(200)

Costa Coffee (85)

Coffee Bean & Tea Leaf

(21)

Starbucks Coffee (20)

Gloria Jean's Coffee (7)

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I AM A COFFEE LOVER AND AN INDUSTRY OBSERVER….

CAFÉ COFFEE DAY MANAGEMENT SHOULD HAVE SLEEPLESS NIGHTS

Average Quality of

Coffee

Store Ambience not Upmarket

Hell lot of Serious Competition

BARISTA• Biggest Competition to CCD• Moderately Priced Higher than CCD ( But trust me, its worth it) • It was established in 2000 but was taken over by Lavazza• Barista has outlets in India, Bangladesh, Sri Lanka and the Middle East.

THE DIFFERENCE BETWEEN CAFÉ COFFEE DAY AND BARISTA

• CCD ambience has become more college (or even high school) canteen-ish. The service staff are hard put to tell the difference between capuccinos and lattes or grande and regular.

• Barista has remained constant in ambience, service and menu, since its inception. The coffee - particularly the lavazza - is incomparable which ever way you want to drink it. And the teas no less so.

COSTA COFFEE

It is a UK based company and came to India in 2005

“ Very premium menu which is very European. The coffees and all other beverages taste very nice and are very high quality”

STARBUCKS COFFEE

• Most famous Coffee chain in the world with highest no. of outlets

• Entered India in 2013 in a JV with Tata Global Beverages Ltd.• Catering to premium customers and prices are slightly higher

than Costa Coffee• The stores have got an Indian touch in them and the menu has

Indian taste items too

STARBUCKS OUTLETAt Connaught place,New Delhi

COFFEE BEAN AND TEA LEAF

“ The Best Coffee I have ever had”

Very Premium High Quality Products priced at the same price as Starbucks

MOCHA COFFEE CHAIN• 19 outlets all over India mostly in Mumbai and NCR• It stands for the coolest coffee shop in the country with its own sense of style• They also serve liquor in their cafes• Earlier used to serve Sheesha too• They have wider food menu

“Every shop can have its own wild and intense flavour. Everything from a wall to a cup can have its own sense of expression and identity. That diversity and variety in every outlet enriches rather than confuses. And makes it a coffee shop people love to visit once more.”

COFFEE CULTURE IN FIVE STAR HOTELS

SEA LOUNGEat

HOTEL TAJ MAHAL PALACE, MUMBAISea lounge offers old colonial charm with art deco furniture and live Piano music enhanced by its spectacular view of the Arabian Sea. It is considered to be a city institution for traditional Afternoon Tea featuring an elaborate buffet spread of classic English delicacies and Local Indian favourites complemented with a selection of the world’s finest teas and coffees.

Sea Lounge is a favourite for its light lunch and dinner fare and Mumbai street food including Bhel Puri, Sev Puri, Kheema Ghotala Toastie and Vada Pav . In the evenings, guests may choose to opt for a quiet glass of Champagne or a cocktail as they watch the lights from the moving ships on the harbour.

KAFE FONTANAat

HOTEL TAJ PALACE, NEW DELHI

It overlooks the pool with its landscaped gardens, green palms, putting green and blue shimmering water, all of which can be viewed through the lovely Venetian blinds.

REVENUE COMPARISON

• CCD stores on an average do a sale of about 30 lakhs per annum form each of their outlets

• Costa is able to manage about 60 lakhs and even 1 crore from some stores

• Interestingly Starbucks has done on an average of 1 lakh per day sale from each of its outlets which is very high

• Coffee Bean & Tea Leaf does an annual sale of about 3.5 crores from each of its outlets

CONCLUSION…“In India… A lot does happen over coffee”