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“Running cafe is a hospitality business and one needs to create the right ambiance
and experience and back it up with stro...
Organized Coffee Retail
                          Presented by: MARQUEE
                                 We Mean Business…...
Wana have
a cuppa
Coffee??
Introduction & Rationale


 •   Booming coffee market in India
 •   Democratization of coffee culture
 •   Global coffee c...
Objectives of Study


• Analyzing the Market Potential and Market Players
   – International Market
   – National Market
•...
International Scenario


    • Coffee consumption:120 million (60kgs) bags in 2007-08
    • The second most traded commodi...
Global Sales
• 1971: Opened in Seattle’s Markets
       • Aim of providing coffee to a number of restaurants.
       • 1982: Adapted It...
CURRENT SCENARIO
  • More than 14,396 stores spread across 40 countries
  • Revenue: $2.01 billion.
  • Accounts for 73% m...
Marketing Strategy



   • Reach customers where they work, travel, shop, and
     dine
   • Use less of traditional adver...
Indian Perspective
             • India has yet to get the taste of Starbucks coffee

             • The reason - Their pr...
• Bruno & Sergio Costa set up the first Costa espresso
          Italian coffee shops, slow-roasted coffee the Italian
   ...
Marketing Strategy


          •     Loyalty Scheme by introducing the Costa Card

          •     Affiliate marketing: St...
Indian Perspective

          • Brought to Indian by the RKJ Group through a master
            franchisee tie-up with Dev...
• In 1995, a businessman and an MD of an advertising agency
         visited the United States to experience first hand th...
• 345 stores around Australia - all locally owned and
            operated by more than 100 franchisees
          • Revenu...
Marketing Strategy




             • Gloria Jean's expanded mainly through franchising.
             • Prior to a store o...
Indian Perspective
    •      Gloria Jean’s Coffee’s opened its first outlet in July 2006.
    •      Planning a total of ...
Indian Domestic Market


            • Organized coffee retail business - Rs.8 billion ($17 million)
            • Potenti...
Essentials of a coffee business




         • Investment in a coffee outlet
               – Rs 18 and Rs 22 lakh for an ...
• Food retail accounts for a sizeable portion of outlet’s sales: 50% to
            55%

          • Uniqueness of style, ...
Top Indian Players….




References: www.cafecoffeeday.com
Introduction
              •    Was started in 1996
              •    Has over 430 café in India.
              •    Has ...
Marketing Strategy




              • Meeting place for 15-29 year olds
              • Want their customers to grow with...
Customer Profile




References: www.cafecoffeeday.com
Recent Developments

              • Regular food items like biryani, pulao on experimental
                basis
        ...
Introduction
               •    Started in 1999
               •    Tata’s buy a stake of Barista
               •    Ste...
Marketing Strategy


       • Recreate the ambience and experience of a
         typical Italian espresso bar.
       • Ha...
The Decline



       •    Reduced its prices to be more accessible.
       •    Diluted its upmarket sheen.
       •    D...
Emergent Patterns


                               Different cafes
     Sociability                  Different themes
    ...
Considerations


   •   Focus on Coffee and Non-coffee Beverages
   •   Customer Satisfaction and Convenience important
  ...
Strategies for New Entrants


  •   Differentiate themselves from the rest.
  •   Tie up with existing established brands
...
d Ç T ‹‹AAR



              g{tÇ~
              lÉâ
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Microsoft Power Point Coffee

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  1. 1. “Running cafe is a hospitality business and one needs to create the right ambiance and experience and back it up with strong logistics” Over second and third cups flow matters of high finance, high state, common gossip and low comedy. It is a social binder, a warmer of tongues, a soberer of minds, a stimulant of wit, a foiler of sleep if you want it so. From roadside mugs to the classic demi-tasse, it is the perfect democrat.
  2. 2. Organized Coffee Retail Presented by: MARQUEE We Mean Business…. Anupam Garg 11 Arnav Sharma 12 Atit Garg 13 Avinash 14 Bhushan Phadnis 15
  3. 3. Wana have a cuppa Coffee??
  4. 4. Introduction & Rationale • Booming coffee market in India • Democratization of coffee culture • Global coffee chains landing in India • Imperative to study the consumer motives, perceptions and wants
  5. 5. Objectives of Study • Analyzing the Market Potential and Market Players – International Market – National Market • Understanding Market Strategies adopted by top competitors • Emerging New Players: – Potential for New Formats like Garden Café, Fashion Café etc • Countering future competition • Our Understanding & Recommendation
  6. 6. International Scenario • Coffee consumption:120 million (60kgs) bags in 2007-08 • The second most traded commodity in the world • Market growth rate:World coffee exports totalled 8.01 million bags in June 2007, an increase of 3.6% • Top three Players: •Starbucks •Costa Coffee •Gloria Jean’s Coffee References: www.coffeeresearch.org
  7. 7. Global Sales
  8. 8. • 1971: Opened in Seattle’s Markets • Aim of providing coffee to a number of restaurants. • 1982: Adapted Italian principles to resemble strong bar culture • 1995: Established its name with the opening of the 676th store as well as increasing the products in store and in-house music References: www.starbucks.com
  9. 9. CURRENT SCENARIO • More than 14,396 stores spread across 40 countries • Revenue: $2.01 billion. • Accounts for 73% market share of U.S. coffeehouse sales References: www.starbucks.com
  10. 10. Marketing Strategy • Reach customers where they work, travel, shop, and dine • Use less of traditional advertising; relying on image advertising, movie and television placement • Quality and experience, rather than price. • Plenty of comfortable seating. • Environmental Friendly References: www.starbucks.com
  11. 11. Indian Perspective • India has yet to get the taste of Starbucks coffee • The reason - Their proposal to enter India was rejected earlier by the Foreign Investment Promotion Board on the ground that the equity structure was ambiguous. • Starbucks bullish on India has decided to file a new proposal References: www.starbucks.com
  12. 12. • Bruno & Sergio Costa set up the first Costa espresso Italian coffee shops, slow-roasted coffee the Italian way, in London (1978) • Costa coffee has over 300 stores in the UK, Germany and the Middle East. • Revenue: £1.1 billion with a market share of 16%in the UK. References: www.costa.co.uk
  13. 13. Marketing Strategy • Loyalty Scheme by introducing the Costa Card • Affiliate marketing: Strong retail presence, Less advertising currently looking to expand into affiliate marketing • New contact strategy: Encouraging the customers to register their details or opt for e-mail marketing • Costa book awards • Social Marketing through Costa Foundation References: www.costa.co.uk
  14. 14. Indian Perspective • Brought to Indian by the RKJ Group through a master franchisee tie-up with Devyani International, in September 2005. • Plans to open 300 outlets in the next three to four years. • Looking at an investment of over Rs 150 crore. References: www.costa.co.uk
  15. 15. • In 1995, a businessman and an MD of an advertising agency visited the United States to experience first hand the Gloria Jean's Coffees brand. • Together they established Jireh International Pty Ltd, the company that holds the right to franchise Gloria Jean's Coffees in Australia • Purchased the rights to the Gloria Jean's Coffees brand for all international countries References: www.coffeeresearch.org
  16. 16. • 345 stores around Australia - all locally owned and operated by more than 100 franchisees • Revenue: $479,700 • Market share of 37% in Australia References: www.coffeeresearch.org
  17. 17. Marketing Strategy • Gloria Jean's expanded mainly through franchising. • Prior to a store opening, franchisees receive comprehensive training through their Coffee University Training Program. • constantly introducing new and innovative quality products that are supported by national marketing campaigns, public relations and local marketing. References: www.coffeeresearch.org
  18. 18. Indian Perspective • Gloria Jean’s Coffee’s opened its first outlet in July 2006. • Planning a total of 750 outlets over the next 5-7 years with 150 within the next two years. • 4 formats: 1. Lounge 2. Kiosks 3. Regular cafes 4. Coffee carts References: www.coffeeresearch.org
  19. 19. Indian Domestic Market • Organized coffee retail business - Rs.8 billion ($17 million) • Potential for coffee retail outlets are nearly 3,000 • Coffee consumption is 75,000 tonnes – 1/10th the consumption of tea, 7,57,000 tonnes • Growth from 2002 and 2005— about 20,000-25,000 tonnes because of aggressive coffee retail chains • Organised coffee retail segment growing at 25%-30% • Non-carbonated beverages (tea and coffee, that is) market pegged at around Rs 8,000-Rs 10,000 crore References: www.indiacoffee.org
  20. 20. Essentials of a coffee business • Investment in a coffee outlet – Rs 18 and Rs 22 lakh for an espresso bar (such as Barista) – Rs 75 lakh for a high-end, full-service cafe (such as Mocha) • Location factor: “There are coffee chains paying rentals as high as Rs 250-Rs 300 per square foot,” • Fluctuation in revenues per outlet: Rs 9,000-Rs 10,000 per day to Rs 35,000-Rs 50,000 per day. References: www.indiacoffee.org, www.icmr.icfai.org
  21. 21. • Food retail accounts for a sizeable portion of outlet’s sales: 50% to 55% • Uniqueness of style, menu and concept results in walk-ins of about – 700-800 per day for mocha – Cafe Coffee Day’s 500 – Barista’s 300-700 • An average cheque per person of Rs 96 at Mocha. Barista, Cafe Coffee Day and Qwiky’s. References: www.coffeeresearch.org
  22. 22. Top Indian Players…. References: www.cafecoffeeday.com
  23. 23. Introduction • Was started in 1996 • Has over 430 café in India. • Has presence in Austria and Pakistan. • In FY06-07, Cafe Coffee Day's turnover was Rs 400 crore. References: www.cafecoffeeday.com
  24. 24. Marketing Strategy • Meeting place for 15-29 year olds • Want their customers to grow with them • Marketing associations with youth-oriented brands like Levis, TVS, Airtel, AOL • Affordability • Well lit and respectable, yet informal References: www.cafecoffeeday.com
  25. 25. Customer Profile References: www.cafecoffeeday.com
  26. 26. Recent Developments • Regular food items like biryani, pulao on experimental basis • Launch 25 café a month – Never be more than 5 minutes away from a CCD References: www.cafecoffeeday.com
  27. 27. Introduction • Started in 1999 • Tata’s buy a stake of Barista • Sterling Infotech take over in 2004 • Lavazza take over in 2007 • Over 160 outlets • Revenue: Rs 45 crore References: www.barista.co.in
  28. 28. Marketing Strategy • Recreate the ambience and experience of a typical Italian espresso bar. • Had newspapers, magazines, guitars, board games. • Priced at a premium. • In 2002, Barista had 85 outlets compared to CCD’s 35. References: www.barista.co.in
  29. 29. The Decline • Reduced its prices to be more accessible. • Diluted its upmarket sheen. • Discouraged customers to hang around. • Tried to be everything to everybody and ended being nothing to anybody. References: www.barista.co.in
  30. 30. Emergent Patterns Different cafes Sociability Different themes ‘Doing coffee’ Different Price Points Coffee & Conversations Relaxing & Take Away Hanging Out Taking ‘lifestyle’ out ‘Coffee’ Most Important Convenient Followed by Price Lifestyle & Cafes
  31. 31. Considerations • Focus on Coffee and Non-coffee Beverages • Customer Satisfaction and Convenience important • Take Away • Pricing policy critical • Increase average/spending & frequency of visits • Different Café Concepts • Exploit Wellness trends among the young • Target middle class
  32. 32. Strategies for New Entrants • Differentiate themselves from the rest. • Tie up with existing established brands • Use word of mouth and advertisements on radio. • Run in-store promotions. • Use of opinion-leading cities. • In-film advertising (e.g. Café Coffee Day)
  33. 33. d Ç T ‹‹AAR g{tÇ~ lÉâ
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