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Cafe Coffee Day: Brewing success

Coffee Day’s positioning as a youth aggregator is powering its growth.

Print Edition: November 16, 2008

When bollywood film director Tanuja Chandra wanted new faces for a project in February 2008, she hunted them down at Café Coffee Day outlets. What better place to find them when 40 per cent of India’s population is under 25 years of age and when Café Coffee Day is a favoured hangout for them. But how did it attain this status across the country, especially when a majority of Indians have traditionally been tea drinkers?

Café Coffee Day’s Nagaraj: Coffee and more
Café Coffee Day’s Nagaraj
“We never present coffee as a mere brew (a la Starbucks), but offer a wholesome experience with it. We create an experience around our product. That is how we attracted the non-traditional coffee drinking youth, and got them to make coffee an essential part of their daily life,’’ says Bidisha Nagaraj, President, Marketing. Besides, the cafes often conduct coffee festivals to introduce consumers to different types of coffee and ways of savouring it. Café Coffee Day, which has added 124 shops over the last seven months, is opening 25-30 new cafes every month.

While discounts have been the norm elsewhere, the company hiked the sale prices of its products in June by an average 8 per cent to absorb rising input costs. The slowdown, evidently, has not hit the chain yet. “People hangout with friends to overcome the mood of gloom. They just love the experience at our cafes,’’ says Nagaraj. Without revealing figures, Nagaraj claims that the 687-store chain has been growing not just in value terms, but in volumes as well. Little wonder it has not cut its marketing spends.

The company, promoted by V.G. Siddhartha, looks unshakeable, even formidable, considering the way it invaded the traditional tea market. But it is not smug. “We constantly work on innovations in terms of consumer experience and formats. We pay attention to the smallest details, like the type of music youth like, and often play region-specific music. We also break the monotony by introducing newer products every quarter. In respect of formats, too, we keep unveiling new ones. We are now looking at coming up with a number of lounge-type formats over the next two years,” says Nagaraj. Then, having tasted success with “cafe concerts” involving popular bands, it is planning to have more such concerts in the coming days.

Challenge: To keep the brand young

Strategy: Innovation in formats, food & beverages, and marketing

Outcome: Increased business both in value & volume

The company now markets itself as India’s largest youth aggregator. This is earning it business from brands like Airtel, Google and Yahoo!, which place their catchy ad messages on the walls of its cafes. “Our marketing model is unique. We don’t do our promotional campaigns in a conventional way, but try different methods each year. For instance, our ‘Friends of Coffee’ on the last Friendship Day was a huge hit. Celebrities as well as others sent witty messages on why they like coffee. Next time, we will hit upon another theme with a similar appeal,” Nagaraj says. In fact, one couple, bonded by Café Coffee Day, nicknamed their child Beany.

Clearly, coffee parlours are an idea whose time has come. Only, Café Coffee Day has ridden this boom better than others.

K.R. Balasubramanyam

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