|
| Smelling the coffee |
| Raghuvir Badrinath / Mumbai Dec 20, 2010, 00:29 IST |
|
Cafe Coffee Day is ramping up fast to meet its biggest challenge: the entry of Starbucks.
V G Siddhartha hates giving interviews as he wants his brand to do the talking. Approach him for a meeting and the standard response is: he is more focused on building his business.
The Coffee Day Chairman is clearly walking the talk. Last month, Café Coffee day opened its 1000th café. It has also been able to outsmart Indian peers such as Barista, which has gone through multiple ownership changes since its launch in 2000, and global players such as Costa Coffee and Gloria Jeans.
But in its 14th year of operation, Siddhartha may be facing the biggest challenge of his career, as Starbucks is set to enter India next year. The global retailer is understood to be in the final stages of discussions to select an Indian partner to roll out cafes in India.
That would be a new game altogether and Siddhartha knows that more than anybody else. That explains why the Coffee Day Group is feverishly putting together a global plan for marketing and communications. The group recently raised around Rs 1,200 crore from a group of blue-chip private equity investors, of which around Rs 350 crore is expected to be earmarked for the café business.
Café Coffee Day has also been building its network at a steady pace and has now reached an average of opening a café once every three days. And it is likely that the average will be once a day, pretty soon. And not a single of its 1020 cafes is franchised out.
After establishing its growing network in India, Café Coffee Days is brewing an active overseas expansion plan. It has set up cafes in Vienna, Austria, Karachi and has plans to spread its presence across West Asia, Eastern Europe, Eurasia, Egypt and South East Asia in the near future. In fact, Café Coffee Day recently acquired a chain of cafes in Czech Republic as part of this global expansion.
Harish Bijoor, a noted brand consultant and who has had a long stint in the coffee industry believes that companies must not be obsessed with competition from outside. “Competition will come and competition will go, but the brand stays forever. I do believe the company needs to set for itself very high standards. Standards those are higher than what one witnesses today. This will insulate it from every type of competition,” he says.
According to him, Café Coffee Day has the ability to put Starbucks into a corner of a niche. “It has the ability of emerging the mass cafe brand, pushing Starbucks into a niche in a country where true-blue brand success is measured in mass,” he says.
The café cultures spawned by Café Coffee Day was born out of an insight that Indian coffee was at the mercy of exports, which when compounded by volatile international commodity market, did not really get the value it desired and there was no value addition, except for coffee powder being sold in packets by Hindustan Unilever and then soluble coffee dominated for Nestle and HUL. The value chain stopped there.
In many ways, Siddhartha entered the market and elongated the value chain to include liquid coffee. The cafe is the purveyor of liquid coffee, just as it is the purveyor of the cafe experience altogether. This added further value and extracted maximum values.
Industry watchers state that in doing all this, Siddhartha kept the consumer in mind all the while. And that is the secret recipe for his success. The Café Coffee Day strategy is all about a keen focus on the consumer and his wants, needs, desires and aspirations at the front-end, and a matching delivery in terms of quality and brand experience at the back end.
When a brand is able to connect with its target group, it builds an umbilical brand connect. Café Coffee Day has been able to build such an umbilical brand connect in a relatively short period of time, brand experts say. When such a connect exists, brands can milk margins and more. The coffee chain’s strength is its ability to manage prices even when the going is tough.
According to industry analysts, the brand positioning that Café Coffee Day has appropriated for itself in many ways, is all about being a common man’s not-so- common coffee. “The brand is in the street, and not on the high street alone. It is accessible by all,” Bijoor says.
“I do believe India is a crucible market for the best of innovation and the best of service delivery. What works here, will work everywhere else,” notes Bijoor.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
