Cafe culture is the latest trend to take the nation by storm. It joined the race simultaneous with the satellite culture. Although not as big, the culture has nonetheless caught on the consumer fancy and has spawned quite a few coffee chains. Amongst the big guns is Amalgamated Bean Coffee Trading company's Cafe Coffee Day. Cafe's marketing head Sudipta Sen Gupta is understandably quite excited about the cafe's prospectus. While the company is poised at launching 49 more cafes in the country, it is also looking at opening cafe chains worldwide- all before the financial year end. Sen Gupta started off her career with Compaq and Pepsi before she joined Cafe Coffee Day three years ago. She has been one of the core team members, who worked on the look and the approach of the cafe before it launched in a big way. She spoke to indiantelevision.com's Trupti Ghag about the company, how it functions and in which direction is it looking now. Excerpts: |
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What is the business structure of Cafe Coffee Day? What are the other revenue models besides the cafe? |
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How would you chart the growth for past couple years since you launched? We have seen a meteoric growth post 1999; coincidentally many other players came into the market then. It could be owing to the cost effect syndrome, but the coffee culture took then. In 2001 we had 14 outlets in five cities and now in 2004 we have 151. We have planned to launch 49 more outlets by the end of this year, which will make a total of 200 outlets. In addition to that we are also going abroad. We will open 50 outlets overseas in 10 cities. |
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What is the strategy behind opening up café's abroad? Hasn't the cafe culture been prevalent abroad for some time now? Aren't there enough cafe's already there? |
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Who is your target consumer? But according to us, the typical consumers at our cafe is young or young at heart. Any body who is youthful, be it in terms of age or outlook, would like to hangout at a Café Coffee Day because of kind of ambiance that we offer. We are about juke boxes, good and affordable coffee and food and an informal atmosphere. The brand fit is with youth or young at heart. |
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Is that the reason why you associate with on-ground events? How does it really help the business growth? Growth comes from how well the café chain is doing and how well the market is doing. As of now, the market is growing. It has barely scratched the surface. It can take many more cafés, many more players and many more types of coffee chains targeting a spectrum of consumers. |
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Who do you regard as your closest competitor? |
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Which is? |
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What about competitor within the coffee chains? We are not trying to be some one else. We are not trying to be an upper class coffee shop where you can walk in only if you have certain amount of money in your pocket. These are the upper end coffee shops that have hookahs and the works. We are about an every day hang out. We are about being the third most frequented place after home and workplace or college. So we are like the coffee chains overseas but we are about affordable fun. I think we have a distinct identity; we are about coffee and about hanging out and about nice time spend. |
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What is your best selling item on the menu? Isn't Cafe Coffee Day more better know for its cold coffees? Also, cold coffees are favored because they are unique. Frappe is a universal formulation, but at the same time we have a range of ice-blended coffees that are unique. We have a cardamom flavoured coffee, chocolate flavoured coffee, coconut flavoured coffee, even a mint flavoured coffee and a coffee garnished with bitter coffee beans. I think it is because of the exciting recipes that people go for them. But there are real coffee connoisseurs who will have their cup of cappuccino and nothing else. |
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How do you decide on the menu? It has to be noted here that all your products have a decided Indian taste to it - be it food or coffee. |
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How do you go about scouting location for your cafe's? Do you own the premises or do you get it on lease? We normally take up places on long lease. |
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When you launched, one got to hear about a rumour that your coffee has a chicory blend? Comment. |
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How has the government support been? What government probably can do, and entire coffee community will appreciate, is to help the needy coffee farmer. Everybody who has anything coffee industry will benefit from it. |
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What is the core strength of the company? It helps if your linkages are strong with coffee, as a product, in all its aspects. We are a true coffee conglomerate. |
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Where does the coffee chains move ahead from here? You have already started merchandising. Are you looking at building it up? But, yes it has become a serious business now. We are looking at 5 per cent of our revenue coming from the merchandising. We are also into selling bags, pens and filters. But there will always be a linkage with youth and coffee. We will always keep our focus; we will not become a retail store. |
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Currently, what is the revenue pie of the company like? |
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What is the group turnover of the company? |
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How do you go about advertising on the television channel? What about ticket sales? Latest, we have tied up with Channel [V]'s Get Gorgeous contest. The reason being that a lot of our young consumers are interested in careers. Modeling is a career that a lot of youngsters are interested in and this was an excellent platform. We have also done promotion for History Channel, where we have run promotion for Hollywood Heroes. We had asked a few question and a lucky winner won a trip to Hollywood. We are involved in ticket sales in quite a few events, Enrique being one of them. We were involved in WWE, Elton John ticket sales. These acts are very much appreciated by our consumers. Besides that we also tie up lot of the youth brands. Our promise to the customer is that a lot can happen over a coffee. So every time we try to ensure something good happens to our customer. So we have a contest going on with Levis, another one with Scooty, and latest contest with Liril. |
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What is it that you get out of these ticket sales? From our point of view, we always ask for a certain amount of tickets around which we have a contest. Couples can win ticket for free. This in turn raises the awareness level as cafe staff approaches the consumers to inform them about the contest. There is not a better publicity mechanism then the guy who is serving you telling you about the same. |
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What about promoting your fare through in-serial or in film promotions? Next big consumer passion is Bollywood, so we decided to associated with movies. But the way it happened was quite accidental. A few movies, whose target audience matched that of the consumers at Cafe Coffee Day, started shooting a few scenes in the cafe. So we had a Hindi movie Bas Yun Hi and a couple of Telugu and Tamil films with prominent Cafe Coffee Day brand placement. Later we took a conscious decision of being seen in certain movies like Khakee and Main Hoon Na. As part of this effort, the brand has been placed smartly in two forthcoming Bollywood ventures, the Amitabh Bachchan, Aishwarya Rai, Vivek Oberoi starrer Kyun Ho Gaya Na and Sajid Nadiadwala's Salman Khan, Priyanka Chopra starrer Mujhse Shaadi Karoge. Another placement area that happened accidentally was with HDFC. They wanted to promote their debit card and they choose us. So all the 21 cafes had debit card machines, just during that month. The ad was shot in a Cafe Coffee Day premises. A lot of serials are shot in Cafe Coffee Day. Recently, Kahaani Ghar Ghar Kii was shot but we have no prominent tie ups. What we are offering is just a location to shoot in. We do charge a very small amount, which is the direct revenue loss for that period. We have done ads but all through barter deals. If we get a good deal from any other media, we will definitely go in for a marketing deal. But as a advertisement option or as a marketing spend, we are not looking at mass media. |
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Earlier, you mentioned that there was a sales boost during the contests.... Conversion rate is 100 per cent because no customer sits in a Coffee Day without consuming anything. |
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What kind of interaction is encouraged between the consumer and the staff? It is not sufficient that they clean the table well, but they have to be able to communicate with the consumer on one on one basis. It is a cultural shift; it is a huge responsibility as, in India you do not look at the people serving at your table as your peer. We want somebody who can be a friend to the customer but at the same time will know about the international standards of hygiene and cleanliness and personal grooming. |
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How often do you conduct quality checks in your cafes? |
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Is there are staunch Cafe Coffee Day person or your consumer group is often switching between other cafes? |
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Where are you aiming at going ahead from here? Would you ever start an high end product? |
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