It was a development which was sure to happen. Starbucks, the iconic coffee bar chain based in Seattle in Washington, finally announced its India plans. And India's largest coffee chain - Cafe Coffee Day - knew it pretty well and had prepared a war chest ahead of the development.
Having raised a record Rs 12,000 crore at its holding company level from a clutch of marquee private equity investors during mid of last year and with an allocation of reportedly Rs 350 crore to expand the retail cafe chain, Cafe Coffee Day is looking forward to how Starbucks will roll out its plan in India. The year ahead will be pretty interesting to watch on how India's largest coffee chain, with 1,050 cafes, will square up to the toughest competition it would have faced as it enters 15th years of operations.
In a chat over over coffee with Raghuvir Badrinath of Business Standard, Venu Madhav, COO, Café Coffee Day, discussed on how the landscape may pan out.
After much discussed and delayed plans, Starbucks is set to finally roll out its cafes in India. Being the largest coffee chain in India, how do you see the entry of Starbucks and how will you square up to them?
We are glad to have Starbucks in India. Starbucks is an iconic brand and their entry will only give consumers the advantage of choice. While we look forward to the Starbucks experience, Café Coffee Day will continue to chart its plans based on our consumer requirements. We will continue to look at our consumers so as to enrich their experience and so long as we continue doing so we believe we will have continued patronage.
You have grown aggresively during the past few years. With the entry of Starbucks, how is Cafe Coffee Day gearing up as you plan for the year ahead?
At Café Coffee Day our expansion is based on breaking up the market into various verticals and pursuing café numbers in these specific verticals such as high street, malls, multiplexes, premium institutions, transport hubs etc. This kind of an approach has worked for us in terms of a break-up of a specific market.
Café Coffee Day is all about conversation and that’s embodied in our logo. Café Coffee Day is a perfect place to ‘relax and converse.’ Today we are more in synch with our consumers and as our logo suggests we are more than a coffee café. We are a catalyst to conversation, to meetings, to celebrations, to discussion.
Café Coffee Day is truly a neighborhood café that offers a perfect relaxation over a cuppa. Our consumers relate with the dialogue box as it stands for everything they use the café for and to us that is the measure of our success.
Starbucks is coming into India at a time when the Indian economy is on a cusp of high growth and more and more global retailers are looking at India. How is the Indian coffee retailing scenario panning out as compared to the other matured markets?
India has always been predominantly a tea drinking nation, coffee-being popular only in some southern states. However, over the last eight to ten years there has been a growing interest in coffee and the beverage is becoming more and more popular especially among the youth.
Cafés are increasingly becoming more than places to just sip coffee. A lot many things in life and work happen over a cuppa these days. Today India is one of the fastest growing coffee markets in the world. It is taking great strides in making its presence in the world market as well as well as in the domestic retail arena as more and more Indians now prefer the drink.
What are the hurdles that the Indian coffee retail sector is witnessing and what steps should the players take to go up the value chain and make a mark on the global canvas?
One of the biggest challenges is real estate; having said that Café Coffee Day is looking at a lot of high traffic options like transport hubs and one time alliances with popular malls, petrol stations, premium institutions taking a revenue share route. We have alliances with noteworthy names such as Shopper’s Stop, HPCL, Fortis to name a few. In mature markets certain standards and benchmarks exist and that is what we will need to start looking at if we need to make serious headway globally.
You have started to have some presence in few markets globally and you have also acquired a chain of cafes in Czech Republic in Eastern Europe. Even as Starbucks is looking at India as its next growth area, is Cafe Coffee Day planning more global expansions?
Café Coffee Day is always looking for opportunities to expand our presence out of the country. While we are looking at several geographies, presently we are focused on consolidating our position by increasing our presence in the country.
We are presently focusing on India and as usual our strategy will continue to be dictated by our consumer needs and requirement. This is what has kept us ahead and this is what we are going to be focused on.
