The State-run Coffee Board is planning to revive and expand India Coffee Houses (ICHs) along with private players. The Board aims to open atleast 75 full-service ICHs over the next three years, to take on the organised chains in the Rs 18.64 billion market.
This is one of the initiatives taken by the Board to increase domestic consumption in India, says the Board.
The Coffee Board's ICH outlets have been popular across the country for more than eight decades now, for the pure coffee and snacks they offer.
Its first attempt at setting up branded outlets was in the 1940s, with India Coffee House, but this had to be shut down within a decade as the concept of stepping out of the home for coffee was limited to a few sections of society in a handful of cities. In 1957, the India Coffee Board Workers Cooperative Society revived the franchise under a new name: Indian Coffee House and set up a store in New Delhi. The Coffee Board is currently operating 12 India Coffee Houses across the country.
Now the Board plans to to expand the full-service format ICHs by partnering with private sector operators. Each ICH would occupy 1,000-1,500 sq ft carpet area. The Board has called for a pre-bid consultation meeting towards this end.
"Towards leveraging the brand to achieve rapid and sustained growth in domestic coffee consumption, the Board intends to expand this chain of outlets by implementing a franchiser-owned franchisee-operated Model," the Coffee Board said.
Since most high potential public locations have hitherto remained untapped due to accessibility and other challenges, the Coffee Board will liaise with various establishments to offer such spaces to select entities that are identified through a bidding process. Along with enabling access to high footfall locations, the Coffee Board will also promote the initiative by building awareness through a broadbased, countrywide ‘India coffee’ campaign that would also highlight the positioning and offerings of the “India Coffee House” outlets.
The campaign would include development of a strong brand identity and logos among other things, through traditional media and digital/social media campaigns. These would be fully rolled out by the first quarter of 2018.
Quoting an NRAI Food Service Report 2016, the Board said that about 2,864 cafes actively operate in a market whose size is estimated at Rs 18.64 billion. Cafés or coffee houses can play a pivotal role in driving in home coffee consumption and can trigger a change in consumer behaviour towards coffee.
The cafés have witnessed a compounded average growth rate (CAGR) of 6.9 per cent during the period 2013-16 and are expected to have a growth rate of nine per cent in 2016-21. While the cafés and coffee houses could have grown at a faster rate, high real estate costs have constrained their performance.