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CASE STUDY

How can Café Coffee Day meet the Starbucks challenge?
Vishwadeep Kuila

CCD will need to position itself such that it is seen as a popular hangout for younger people.
Photo: Nagara Gopal

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November 28, 2013:
Today, the coffee chain market is more than Rs 1,000 crore and is growing at almost 30 per cent each year. The market
is dominated by a few brands with CCD the largest in terms of turnover and the number of outlets in India, followed by
Barista – a distant second.
Other players are Costa Coffee, Mocha, Coffee Bean & Tea Leaf and Gloria Jean’s. Currently, India has about 1,800
coffee outlets, or cafes, and business sources claim India can accommodate another 2,700 cafes. This seems plausible
given that, against global per capita coffee consumption of 4 kg a year, India stands at 0.82 kg.

The CCD Journey
The Amalgamated Bean is among India’s top two coffee producers and exporters, with 10,500 acres of coffee
plantations in Chikmagalur. It produces 7,000 tonnes of coffee every year and sources another 35,000 tonnes from
other plantations. About 25,000 tonnes are exported and 3,000 tonnes used in CCD cafés.
The company started with its first store in Bangalore in 1996. It took six years to reach 35 outlets across the country by
2002.
However, by 2008 CCD had opened 595 outlets. And in 2012, the count stood at 1,400. In the same period it went from
zero to a Rs 800-crore turnover.
Currently the company has three formats: CCD, CCD Lounge (Premium Format), and CCD Square (single-origin coffee,
from one estate, not blended).
In addition to this, the company has 900 CCD Express (kiosks for take-away) and 16,000 vending machines in offices.
CCD had a clear vision that the outlets would not be coffee-drinking places. They would be the perfect hangouts for
young people and a place for occasional casual meetings for corporates.
Therefore, the business model was built towards enabling CCD to be a good hangout place, both in terms of its
ambience and the pricing.
The philosophy of the brand is well captured in the tag line ‘A lot can happen over coffee’.
While all was going well for CCDs, Starbucks with its 50:50 joint venture with Tata Global Beverages, entered the

The company in India. metro stations.000 notes scrapped. are used only as inputs for the respondents to devise strategy. Starbucks operates 15 outlets in two cities. The company plans to expand its retail footprint in India by opening outlets in hospitals. (The writer. The figures. should CCD react? And. The company plans to have 50 outlets in India by the end of 2013. launched its first outlet in Mumbai in October 2012. drawn from secondary research sources. educational institutions and corporate campuses.com/news/education/how-can-caf-coffee-day-meet-the-starbuckschallenge/article5397467. if yes. Starbucks expanded its presence to Delhi in January 2013 by opening two outlets at Terminal III of the Indira Gandhi International Airport and later one in Connaught Place. As of June 2013. called Tata Starbucks Ltd. runs Brand Vectors. As both the companies in question are live companies.000 ATMs so far. you can gather additional information on their current strategies from secondary research.000 stores in 50 countries. an alumnus of IIM Ahmedabad. says MD & CEO Frequently asked questions: Rs 500 & Rs 1. how ? You are the head of Marketing at CCD and you have been asked to recommend insightful marketing inputs in this scenario with a special focus on the strategic direction for the brand. This case has been written purely for student analysis and does not claim factual accuracy.) (This article was published on November 28.Indian market in its second attempt. 2013) MORE FROM BUSINESS LINE PNB has recalibrated 2. Starbucks is the premier roaster and retailer of speciality coffee in the world. with more than 15. The decision to open outlets inside Tata-owned retail stores and properties would depend on the brand’s premium positioning. Starbucks opened a combination of standalone outlets located at malls.. and commercial complexes. Should CCD even recognise the entry of Starbucks as the latter is in a far more premium segment than CCD? Would the brand image of Starbucks just be of one-time novelty value or will it be able to shift consumers to a more premium concept in the long term? Therefore. The writer does not claim to have any firsthand information from the companies mentioned here. near gyms or health stores. a marketing consultancy.ece © The Hindu Business Line . Initially. The Global player Starbucks started in 1971 with one outlet but today. 2016 10:01:04 PM | http://www. what now? The Muslims we do not see Printable version | Nov 19. The Problem The business head at CCD has various questions on his mind.thehindubusinessline. airports.