SWOT analysis of Bru Coffee

March 28, 2019 By Hitesh Bhasin Tagged With: SWOT

Bru coffee is one of the most favorite coffee brand in India which got
established in the year 1968. Bru has been active in the coffee industry by
bringing different tastes and flavors of coffee to its customers. The
company conducts various trials before finalizing the coffee beans in order
to deliver the best coffee to its customers. Bru coffee is owned by another
big brand called Unilever.

Table of Contents

Strengths in the SWOT analysis of Bru Coffee

This helps in understanding the core areas of the business where it beats
the competition and have the competitive advantage in the market.
Strengths are generally the core competency of the business.

1. Strong Brand Name – Bru coffee has an established brand

name in the market. The brand equity is quite high owing to the
quality of coffee it provides to the customers.
2. Great Aroma – The aroma of the coffee is very much liked by
the customers and has a very loyal customer base. This has
helped the brand to establish a good brand recall and equity in
the market.
3. Advertising is Excellent – Bru coffee is famous for its way of
advertising the coffee in the market. The TV ads it airs is
absolutely aligned with the customer behavior and hence it
always have a great reception.
4. Distribution and Availability – Bru coffee has a very well
established distribution network owing to the fact that it is owned
by Unilever. Moreover, this has helped the brand to be available
in the market which is a key to success for any brand.
Weakness in the SWOT analysis of Bru Coffee
This is the pain area of the organization where it does not have the
resources or skills. Business has to work upon these areas so that they are
not left behind from the competition. Though there will be some or the other
weakness but it should not be an area which takes the business out of the
market

1. Underdeveloped Industry – India is not very much developed

in terms of coffee adoption and at the same time increasing
health consciousness has made people avoid caffeine-
containing drinks.
2. Product Line is not deep – Though there are different flavors
and taste available in this category but Bru coffee has not yet
 established the market for different flavors and hence this has
emerged as one of the weakness owing to the fact that
competition is providing customers with different varieties of
coffee.
3. High Dependence on Raw Materials which are costly
– There is a high dependence on the raw materials which are
costly to cultivate in nature and hence the non-availability of raw
materials adds to the hindrance in the manufacturing
of goods and also it adds to the cost of the coffee as the raw
materials need to be over cultivated and kept in storage to be
preserved.

Opportunities in the SWOT analysis of Bru Coffee

This helps in understanding what other things a business can do with the
current skills and resources. It helps the business to know the areas where
it can expand and take a lead in order to diversify the business and expand
the customer base

1. Tie up with offices – Bru can tie up with offices which will help
in increasing the customer awareness as well as the usage in
the market. Office going people are the major market for coffee
industry and hence by letting people drink coffee in the office
would be the great opportunity for the brands to develop a taste
in people.
2. Penetration in the market – Bru can target rural markets in
order to penetrate more in the market enhance their customer
base with reach as well.
Threats in the SWOT analysis of Bru Coffee
This analysis helps in understanding what are the areas which can impact
the business in future or right away. So business has to prepare itself to
handle the threats in the market landscape. Competition or increasing
number of players in the market with same value proposition is a threat to
business as it directly lowers down the customer base and revenue

1. Direct & Indirect Competition – There is a high competition in

the market both from the direct coffee players as well as from
other beverage players.
2. Problems with Cocoa- The produce is not easy to cultivate and
farmers are facing major issues and hence it creates problems
for the industry.
3. Hindustan Unilever’s brand has finally become the volume leader in
the two-player instant coffee market, albeit by a slender margin.
 4. It’s time for celebration at Hindustan Unilever.
Bru, its instant coffee brand, has finally
overtaken its closest competitor, Nescafe, in
terms of volume leadership. HUL’s sense of
achievement is understandable as the
competition in the Rs 800-crore instant coffee
segment has been intense between the two players.
5. As per market research agency, Nielsen’s data sourced from the
industry, Bru’s market share stood at 50.2 per cent year-to-date
(January – October 2011) as compared to its competitor, at 49.2 per
cent. While HUL does not comment on market share figures as a
company policy, an email sent to Nestle did not elicit any response.
6. Is Bru’s being the new market leader and its move towards upping
the game by bringing in new variants, brand ambassadors and even
a coffee shop chain, all in a single year, a co-incidence? Arun
Srinivasan, VP – beverages, HUL simply attributes the FMCG major’s
renewed focus on Bru to the growth opportunities in the category
being propelled by the emergence of a young, affluent and urban
India.
7. Besides, the low-level of penetration of the drink also presents
players with ample opportunity to explore the space. Compared to
tea penetration at 96 per cent, coffee penetration is as low as 16 per
cent. The brand's growth rate (year-to-date) of 25.6 per cent, ahead
of the market (20 per cent year-on-year) only eggs them on.
8. And to continue on the growth path, Bru seems to have reverted to
the oldest marketing mantra – straddling the pyramid. In simpler
parlance, offering a product at each price point and as Srinivasan’s
puts it “a flavour for every taste palette”. So at the start of the year,
HUL launched Bru Lite, for those who like their coffee light. Mid-
year, around July, came Bru Exotica, a premium range of coffees for
the well-heeled, well-travelled Indians who like international
flavours. Currently, the flavours being offered include those from
Brazil, Colombia and Kilimanjaro. With Exotica, Bru has entered the
premium instant coffee market, with prices starting at at Rs 180 for
50 grams (Brazil) and going up to Rs 300 (Colombia).
9. And the latest addition to the portfolio is Bru Gold, a non-chicory
coffee, a 100 per cent coffee, for those who like their drink strong.
With Bru Lite, Exotica range and Gold, HUL has beefed up its
 portfolio which previous included ice and hot cappucino and the
original, Bru Green Label roast and ground further.
10. For brand consultant, Harish Bijoor of Harish Bijoor Consults,
introduction of such variants by Bru is an attempt to add sub-
segments to a relatively boring instant coffee segment that has been
quite stagnant. However, he also expresses concern over Bru’s
efforts leading to cannibalising of its own sales. “I don’t think
consumers are aware of coffee types or are as evolved,” says Bijoor.
11. Promoting the brand
In this era of competition, no brand can afford to lag behind its
competitors. So when Nescafe roped in Bollywood actors Deepika
Padukone and Purab Kohli late last year, Bru’s move to bringing in
its own brand ambassadors, Shahid Kapoor and Priyanka Chopra
was a matter of time. And a perfect way it seems for “making the
brand’s imagery premium and contemporary” as intended. The only
problem, there is much common between the two brand’s
intentions vis-a-vis their brand images – perceived young and
glamorous like the beverage itself. All in all the brand ambassadors
simply even out the field without any room for differentiation.
12. A similar logic is echoed by brand experts when commenting
on the carefully designed communication for Bru’s new variants. The
ads devised for them have been formulated keeping in mind the
intrinsic qualities of the products. For instance, Bru Lite commercials
use the theme of light moments shared by friends, whereas Bru
Gold speaks of living life 100 per cent (interpreted as 100 per cent
coffee as per tests carried out by the company). The Exotica ads on
the other hand have been designed keeping in mind the
individualistic coffee drinking experience and therefore use both the
brand ambassadors separately. Such attention to detailing may be
lost on consumers though who rarely pay attention to such nuances
in advertising says Bijoor.
13. This year also saw HUL’s second foray into the services space.
And after Kwality Wall’s ice cream parlours, Swirl came the Bru
World Cafes. A space that its competitor Nestle has also dabbled in
the past with Nescafe Coffee Parlours. While Nestle’s venture was
discontinued, Bru views its own as “complementing their portfolio”.
Currently, there are seven cafes operating under the chain in
Mumbai and the company is in no particular hurry to expand.
 Industry experts are divided in their opinion on the foray. On one
hand it can serve as a live station for advertising the brands and
even as a point of sale or even a virtual lab for testing out any new
blends in future. On the other, it won’t be a major value or volume
generator, a reason largely attributed to Nestle shutting down its
own coffee shops.
14. The big questions for the category now: how will these moves
by Bru pay off? Will Bru be able to sustain its position as the volume
leader? No one is hazarding a guess yet.