Cafe Coffee Day brews expansion

Cafe Coffee Day (CCD), the coffee chain owned by Bangalore-based Amalgamated Coffee Bean Trading Co, is going beyond the usual hotspots such as downtown or shopping malls and strengthening its presence in offices and on highways.

It has already tied up with Infosys, Wipro and Accenture to set up outlets on their premises. The plan envisages as many as 80 CCD outlets on office premises in the near future compared with 40 at present, and 10 on the highways. The Rs 400-crore enterprise will also strengthen its packaged foods division and expand overseas.

As a part of its brand-building exercise, CCD is focusing on alternative destinations such as hospitals, office complexes and highways to increase its presence. A Venu Madhav, head, operations, CCD, said, "These places attract target customers, while involving low-capital expenditure."

Currently, the company has 40 CCD outlets on the campuses of IT majors such as Infosys, Wipro and Accenture. It plans to triple its tally of 10 highway stores in the near future.

CCD is also expanding its FMCG model, which is expected to contribute around 8 per cent to its revenues. Madhav said, "The company will be introducing products complementing coffee. We have already introduced cookies, mint and packaged water and will soon introduce branded peanuts in multiple flavours."

CCD, which has 436 stores, plans to scale the number to 700 outlets at an average investment of Rs 25-30 lakh a store in the immediate future.

Madhav mentioned that the company would continue the policy of not opting for a franchisee model to increase its retail network. Apart from its domestic expansion, it is also looking at increasing its international operations.

Currently, CCD has two stores each in Austria and Pakistan. It plans to open 50 outlets in the overseas markets such as West Asia, Bangladesh, Switzerland, the Czech Republic and a few more stores in Austria.

The coffee chain, which registers 1 million customers daily, has traditionally opted for below-the-line initiatives and word-of-mouth promotional options. Madhav mentioned that CCD has about 1,000 dedicated communities on the internet.

However, he mentioned that in future the company would focus on co-branding as promotional activities. CCD has already featured in a co-branding advertisement campaign with motorcycle manufacturer Yamaha.