Coffee Day eyes 25 per cent growth

Targeting a $ 20 million investment in the next three years with a 25 per cent annual growth in turnover, Coffee Day is planning to increase its worldwide cafe network to 500 by 2006.

Its parent company, the Rs 300 crore Amalgamated Coffee Beans (ABC) has taken major initiatives in setting up vending machines, kiosks, branded filter coffee and marketing tie-ups as part of the expansion plan.

"We are swiftly moving towards building a mass customer base with specific focus on the young generation. Our initiatives are pegged to result in a 25 per cent annual rise in revenues in the coming years, from the present Rs 300 crore", group chairman V G Siddhartha said here.

He said around $ 20 million will be invested in the next three years, mostly through internal generation with 64 coffee cafes likely to come up in the next six months.

Resources are not much of an issue, he said pointing out that the company has over 5,000 acres of plantations on one hand and large stocks portfolio in major technology companies on the other.

He said for product expansion in its coffee business, the company has moved into packaged sales and tied up with Glaxo Smithkline to distribute its "perfect" brand.

"It is an opportunity to be seen at more than 1.5 lakh retail outlets in south India alone", Siddhartha said.

ABC plans to expand its 'Fresh 'n' Ground' filter coffee outlets from Bangalore to the whole of south India, he added.

Siddhartha said 22 different flavours were being sold through the 344 coffee points or 'Fresh 'n' Ground' outlets, planned to be increased to 400 by June next and 500 by 2006.

He said available in two blends, 'Fresh 'n' Ground' packaged coffee powder is sold with an assurance that no pack is more than seven days old.

The coffee cafe concept has also picked up and the company has set up three offices abroad to look into the feasibility of establishing these cafes in West Asia, China, far-east and Russia, he added.

"Another area of expansion for us has been the vending machines segment, helping us promote the 'take away' concept", he said adding the number of such machines is expected to increase to 10,000 soon and are targeted to more than double to 25,000 by 2006.

He said coffee day has also franchised its brand name at around rs three lakh per unit for setting up of smaller format cafes of about 300 square feet called xpress kiosks whose network will also be expanded to 1,000 by 2006 against the current 56.

"It will be a quick beverage and snack option at hi-traffic locations. We want coffee to be available at all times at as many places as possible at an affordable price".

The company is also setting up a training school for those interested in making a career out of coffee.