Domestic beans to freshen Costa Coffee's cuppa

To open first outlet outside NCR in Mumbai by '06-end.

Costa Coffee, the UK coffee brand that entered India last September, is going to source coffee beans from India to cater to the Middle East- its biggest market outside the UK- and Asia Pacific, said Mark Philips, managing director, Costa Ltd.

Costa is likely to finalise the plantation for sourcing within a year, said Virag Joshi, chief executive officer, Devyani International, the master franchisee for Costa Coffee.

He said the company was scouting for a location to set up its roastery in India, which would be its second after south London.

Costa, which currently has 12 outlets in the national capital region (NCR), is planning to open its first outlet outside NCR in Mumbai by end of 2006, said Philips.

With our local partner based in Delhi, we decided to first establish and consolidate the brand in NCR and finetune our strategy before going for a pan-India presence, he added.

Costa, which has about 600 stores worldwide, will in another two months announce its plans for China where it set up a representative office a year ago. Finding the right local partner is the key to emerge as the number one brand in customer preference, said Philips.

On Starbucks' planned entry into India, Philips said that the two brands can happily coexist as they do in the UK, the most sophisticated coffee market in the world. They are well-differentiated brands, Costa being the high-quality, slow roasted Italian coffee and Starbucks being the high-image American brand.

In the UK, of the 2000 branded coffee stores, Costa with 430 stores and Starbucks with 460, own between themselves almost half the market.

"The decision to allow 51 per cent foreign direct investment in single-brand retailing has no bearing on our business model. We have a good local partner and our own management team in India," said Philips.

On setting up kiosks in India, he said that the company will watch out for how the trend of grab-and-go coffee catches on in India. We have alliances with bookstores globally and we would like to have similar alliances in India as well, he added.