Cafe Coffee Day plans Rs 150-cr expansion

Cafe Coffee Day, part of the Bangalore-based Amalgamated Bean Coffee Trading Company Limited (ABCTCL), is planning to spend Rs 120-150 crore for expansion during next year to take its number of cafes to around 1,000 from the current 700. Alok Gupta, director, Cafe Coffee Day, addressing reporters in Bangalore on Monday claimed the funds for the expansion have been tied up.

Gupta added that they are also committed to open cafes at various countries and studying the market to make strategic moves. Cafe Coffee Day has around 10 cafes in West Asia, Pakistan and Europe.

Speaking on the pattern for expansion, Gupta said the company’s hub and spoke model in major cities has clicked. “Through this mode of hub and spoke model, we are at present operating about 100 cafes in Delhi region, 120 cafes in Mumbai and 135 cafes in and around Bangalore. Based on this experience, we will be aggressively moving into major north Indian cities.” The company in also planning to add a third domestic airline to its client list to sell coffee, snacks and meals on board.

 

Cafe Coffee day is also working towards creating more formats like selling coffees through dine-ins (for lunch and dinner) and coffee pubs for youths to hang out in strategic locations. The company in an effort to move up the value chain on Monday announced the launch of a new format - Coffee Day Square in Bangalore which will target higher value realisation by selling single-origin coffee. Single-origin coffee comes from one specific growing region or from a specific estate.

Targeted at expatriates and high income segments, this new format serves single estate origin coffee brews from five different countries like Ethiopia, Colombia, Peru, Brazil, Costa Rica and three domestic coffees from regions like Himalayas (Assam), Kathlekhan and Rajgiri (both from Chikmagalur) and the tribal belt of Andhra Pradesh (Araku Valley). This new format is expected to dot various major cities in six months time. According to Cafe Coffee Day officials, with this new format they are experimenting cafe, retail store and business centre all under one roof.

The company, in addition to freshly brewed coffee at this format, also sells coffee powder and coffee beans costing anywhere between Rs 800 to Rs 2,000 per kg depending on the country of origin.