MxMIndia

Tag: Costa Coffee

  • Vh1 launches Vh1 All Stars programme to expand advertiser outreach

    Vh1 offers new outreach platform

    By A Correspondent

     

    The most important thing for any brand is to hold on to the consumer’s attention. And, to facilitate that Vh1 has crafted Vh1 All Stars – a strategic programme for the benefit of advertisers and brands across the country.  This programme aims to provide customised solutions to clients and brand campaigns taking their message to the relevant target group across on-ground outlets spanning 60 cities.

     

    Said Sabrina D’Souza, Head – Marketing, English Entertainment Cluster, Viacom18: “Vh1 All Stars is a strategic programme designed to help brands reach out to their audience in an effective and impactful manner. With a reach of over three million people each week via our unique set of more than 870 on ground partners, we are certain that advertisers will find merit in this pioneering initiative providing added width & depth to their marketing efforts.”

     

    The program has partnered with renowned brands such as Costa Coffee, Ginger Hotels, Truefitt & Hill, HaagenDazs, Gold’s Gym, Jean-Claude Biguine and Hoppipola, as well as with local brands such as The Humming Tree, Bootlegger, High Spirits, Johnny Rockets, Thalassa, Summer House, to name a few.

     

  • As Starbucks opens its first store in Mumbai, a look at the coffee chain retail business in India

    Make mine a Mocha Frappuccino!

     

    By A Correspondent

     

    For all the coffee enthusiasts, the good news is that Starbucks is finally in India and opening its first store in Mumbai today. One doesn’t have to head to another land for your shot of Mocha Frappuccino. Or the signature hot chocolate. Yes, Starbucks enters India in a 50:50 joint venture with Tata Global Beverages and looks like the coffee retail chain business will only get more competitive with the entry of global behemoth.

     

    On the launch, John Culver, President, Starbucks China and Asia Pacific, said, “We are delighted to be able to announce our progress toward opening our first store in India and to introduce locally sourced espresso. Being able to use the highest quality espresso, sourced and roasted in India, is an important part of delivering a locally relevant experience to our customers in the market. This is the first step Starbucks and Tata Coffee Limited are taking toward developing and improving the profile of Indian-grown arabica coffees around the world by elevating the stature of Indian coffee, as well as improving the quality of coffee through sustainable practices.”

     

    Cafe Coffee Day or CCD as popularly known from Amalgamated Bean Coffee Trading Co Ltd (ABCTCL) is the leading coffee retail chain and has been rapidly growing in India. Barista, Costa Coffee, Mocha, The Coffee Bean and Tea Leaf and Gloria Jean’s are some other leading coffee chains India.

     

    Euromonitor International, October 2012 in its study for Cafes/Bars in India points that specialist coffee shops continue to grow at the fastest rate of nearly 25% in current value terms in 2011. It also reports that Amalgamated Bean Coffee Trading Co Ltd (Cafe Coffee Day brand) continues to lead value sales, with a share of 1.1% in 2011. In terms of growth it offers that the Cafes/bars is likely to grow at a constant value CAGR of 3% to reach Rs725.6 billion by 2016.

     

    The report also states that “Urban consumers, including professionals and youngsters, increasingly started to prefer Cafes as places to hang out in 2011. Cafes such as CCD and Barista emerged as the favourite destinations for casual business meetings. Further, the Cafe trend also started to gain huge popularity even in Tier II cities such as Ghaziabad and Hubli, where young consumers were the dominant consumers.”

     

    The encouraging bit is that Cafes/bars value sales grew at a faster rate compared to the review period. The faster growth in 2011 was mainly due to the growing popularity of Cafes/bars as hang out zones for young consumers. Further, chained Cafe’s such as CCD started to include food on their menus to cater to the snacking needs of consumers. Such expansion of menus helped to increase the average spend and value sales even further in 2011. Specialist coffee shops continued to grow at the fastest rate of nearly 25% in current value terms in 2011. To cater to the growing consumer base, Cafe operators such as Cafe Coffee Day expanded the number of outlets drastically in 2011.

     

    K.S Narayanan, CEO, Pan India Food Solutions (The Coffee Bean & Tea Leaf), “The coffee market, by all parameters, is set to grow further in India. While it’s a complex business to manage, given our division over choice of beverage in different parts of the country, the entry of these many brands means more choice for consumers, in addition to segmentation of the market. The growth story for CBTL has been encouraging since we started out in 2008. We’re focused on the premium coffee and tea consumer and strive to deliver the most premium Cafe experience to the customer in terms of product, ambience, and service. Our CBTL business continues to grow at a steady pace and we have added six outlets this fiscal year.”

     

    Another important trend that Euromonitor quotes is that Coffee shops continued to have drinks as their major offering, accounting for nearly 60% of the value sales in 2011. However, most of the coffee shops started to expand their food offering to attract consumers to their outlets.

     

    Independent Cafes accounted for nearly 96% of the total value sales of Cafes/bars in 2011. Independent Cafes continued to enjoy huge popularity amongst older consumers who prefer to have evening and morning hot beverages in traditional independent Cafes, such as Indian Coffee House and Airlines. However, independent Cafes continued to lose share to chained Cafes, which witnessed strong growth in 2011.

     

    India’s Cafes/bars category is highly fragmented with no player constituting a double-digit share in 2011. Amalgamated Bean Coffee Trading Co Ltd (ABCTCL) continued to lead Cafes/bars with a value share of 1.1% in 2011. The company continued to enjoy an established presence across the country under the brands, Cafe Coffee Day and Coffee Day Xpress. Other Cafes/bars, such as Barista, Java Green, and Costa Coffee, also enjoyed huge popularity amongst consumers. It should be noted Amalgamated Bean Coffee Trading Co witnessed the fastest growth, mainly due to rapid expansion in the number of Cafe Coffee Day outlets in 2011.

     

    Whitbread Plc’s flagship brand Costa Coffee witnessed strong regional and national growth across India’s chained Cafes category in 2011. The company enjoyed a value share of 5% of chained specialist coffee shops in 2011. Costa Coffee focuses on business professionals (i.e. expatriates) and affluent households in cosmopolitan cities such as Bangalore and Delhi.

     

    Chained Cafes such as Barista and Cafe Coffee Day are likely to expand the number of outlets and also extend reach to Tier II cities during the forecast period. The expansion plans would allow Cafe chains to leverage on the growing preferences of Tier II consumers to go to Cafes to socialise. Additionally, chained Cafes are also likely to focus on expanding their food menus, including the introduction of value for money food items in their menus over the forecast period.

     

    Increasing real estate rentals, overheads and food price inflation are likely to threaten the profitability of Cafe operators during the forecast period. Such an increase in costs is expected to force Cafe operators to pass on the costs to consumers who might choose to cut side orders.

     

    On the space changing with the entry of Starbucks,  Mr Narayanan said, “With the coming of international brands, the consumer will now get a wider choice of product offerings in the market place which would in turn enable the market to be more sharply segmented and grow at an accelerated pace.

     

    Specific to CBTL he added, “Coffee Bean and Tea Leaf prides itself on the quality of teas and coffees it has on offer for its patrons. Our beverages (coffees and teas) are sourced from the world’s best plantations which comprises about 1% of the world’s produce. That quality experience that we offer to our consumers will continue as we have set out to do.”

     

    Technopak Advisors, a management consulting firm noted that the café brands are moving closer to consumers for easy accessibility. Therefore, they are moving beyond traditional locations (high streets, markets, shopping malls) to other promising and high catchment venues such as offices, hospitals, educational institutions/campuses, airport etc. Besides new formats are being introduced beyond traditional dine such as kiosks, premium lounges among others.

     

    They also outline the challenges in this business and real estate is the biggest one. More brands are now vying for the same space – consequently rentals are high and often a big part of operating expense. There is the issue of supply chain for new brands due to small scale of operations to start with; existing brands need to streamline operations for operational profitability as they grow in store numbers. There is a need for increased investment in resources, kitchen, quality audits, greater financial investment and technology. The challenge is also menu where bands need to standardise the production process in growth phase to provide quality food and beverages across cities. At Store Level, the challenges include that with the growth of the sector, managing store level operations will become increasingly important in terms of staff training, retention, quality of service and standardisation of café design among others.

    Starbucks spokespersons were not available for comment on the eve of the launch to reveal their pricing.

     

    Images from www.Starbucks.in

     

  • Such alliances can provide the domestic partners with a slew of insights across the entire retailing process

    Local retailers partner global brands to launch own labels

    By Sarah Jacob

     

    Ramesh Tainwala believes that “women kindergarten teachers tend to be more confident mothers.” As analogies go, this one may border on the stretched but what the chairman of Planet Retail is attempting to convey is that retailers like him can pick up learnings by partnering with marquee brands, and then use them to boldly build labels of their own.

     

    Planet Retail, which has brought brands like Debenhams, Acceorize, Nautica and Next into the country, has begun flying solo with handbags brand Lavie. It’s not the only domestic retailer following a learn-and-launch strategy.

     

    DLF Retail, which has tied up with brands such as Claire’s and DKNY, launched in-house home decor chain Pure Home + Living a year ago. It is now set to flag off another format called Pure Kitchen Studio by November. Or take Lalit Kishore, master franchisee of sports footwear brand Lotto in India, who has launched his own brand of footwear called Globalite. And then there’s Devyani International, a franchisee for Pizza Hut, KFC and Costa Coffee in India, which has introduced South Indian fast-food chain Vaango independently.

     

    “It is easy to open outlets on your own. But international partnerships help in understanding the economics, food preferences and processes for standardised delivery,” said Virag Joshi, president & CEO, Devyani International.

     

    Alliances can provide the domestic partners with a slew of insights across the entire retailing process. Rohit Aggarwal, promoter of Lite Bite Foods, which started as a franchise for Subway, gives an example. “One takes for granted that the freezer or chiller is cold, but (working with an) international brand teaches you that the temperature needs to be checked every 30 minutes.” Lite Bite is now a Rs100 crore operation running not just Subway outlets but home-grown chains like Punjab Grill and Street Foods of India.

     

    International partnerships also help build a sophisticated team with focused skill sets. “Skills that the management feels can be leveraged without an additional cost to build their own brand in parallel with the primary brands,” said Gaurav Marya, president of Franchise India Holdings, which helps brands partner franchisees in India.

     

    There are plenty of synergies that can be availed of from sharing support functions and the supply chain. Economies of scale come into the picture on the advertising front, distribution, hiring and office space, too.

     

    Devyani International, for instance, has a common production unit or commissary in Gurgaon for brands across its portfolio. And Mr Kishore’s Globalite rides on the wholesale supply chain that is used to retail Lotto across multi-brand stores.

     

    Companies say that in the initial stages having international brands in the kitty helps with prospective trade partners. “A foreign partner carries a lot of weight,” said Mr Aggarwal.

     

    Kanchan Lall, associate VP at management consulting firm Tecnova, likens this trend to the development of private labels by retailers. “Once you grasp the understanding of a business, you look for avenues with higher margins and decision-making flexibility,” she said.

     

    The domestic brand builders rule out potential conflicts of interest, pointing out that the local labels typically operate in a different market segment. “Globalite would not matter to Lotto as the two cater to different price segments,” Mr Kishore explained. While Lotto retails at Rs2, 300 a pair on an average, Globalite is priced around Rs1,500 a pair.

     

    The seven-store handbags chain Lavie gains by being bundled with international brands in Planet Retail’s portfolio. “At the same time, Lavie also helps refine the strategy for the premium and super-premium brands in the portfolio and supports them with assurance of higher footfalls when negotiating with a mall,” said Mr Tainwala.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Starbucks Coffee Co and its Indian joint venture partner Tata Group have plans to open around 40 stores by December

    Starbucks for festive season flag off in Mumbai

    By Arun Kumar & Rasul Bailay

     

    Starbucks Coffee Co and its Indian joint venture partner Tata Group have plans to open around 40 stores by December, half of those in hotels and the rest in high-street malls, a person with the direct knowledge of the plans said.

     

    The person said the 50:50 joint venture, Tata Starbucks, has so far lined up 14 properties in malls and high streets in the New Delhi capital region, Mumbai, Bangalore and Chennai and will make its India debut in September or October from the commercial capital, Mumbai.

     

    The firm will adopt a cluster approach to simultaneously open three to four outlets in each city they initially go to. Mumbai will be followed by the National Capital Region, Bangalore and Chennai. The properties finalised in hotels include the Ambassador and President hotels under the Vivanta by Taj label, a contemporary luxury chain just notch below the super luxury Taj brand of the Tata group.

     

    “We are looking at both Tata properties as well as non-Tata properties and will focus on how we can become part of the local community where we do business,” a Starbucks spokesperson said in an e-mail reply. The alliance is also in talks with non-Tata hotel chains such as Marriott Hotels to open their outlets.

     

    The joint venture will invest Rs100-150 crore this year alone and has a total budget of $100 million (around Rs 550 crore) to invest in India in the next two to three years, the person familiar with the plan said.

     

    He added that the Seattle-based coffee chain – the largest in the world – will manage the business and source many of its staff from the Tata-owned Taj Hotels. All the stores in the initial stage will have a combination of the lounge as well as takeaway facilities, he said.

     

    Starbucks operates more than 17,000 stores in almost 60 countries. The coffee titan has been exploring possibilities to enter India for many years. Earlier it had made an abortive attempt to foray into India before it called off a joint venture involving its Indonesian franchise and Kishore Biyani of the Future Group. In 2007, the joint venture withdrew its foreign investment proposal with the Indian government without citing any reason.

     

    Now, Starbucks is back with a new partner and is bullish on India, a country with one of the lowest rate of coffee per capita consumption in the world.

     

    Local chain Cafe Coffee Day and global chains such as Barista Lavazza, Costa Coffee and Gloria Jeans are among others currently operating around 2,000 outlets in the country.

     

    Industry estimates that the Rs 1,000 crore coffee-through branded outlets sector is growing at an annual rate of 20 per cent. “I don’t see Starbucks as a competition… I see them as a player who will make drinking coffee through outlets a routine business,” said Virag Joshi, chief executive of Devyani International, which operates more than 100 Costa Coffee stores in India.

     

    The company plans to invest Rs400 crore to add 400 more outlets in the next five years. “The market will keep evolving and will keep growing over the years,” he added.

     

    Source: The Economic Times

    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Coffee Bean & Tea Leaf aims at capturing those seeking a better coffee experience.

    Coffee Bean & Tea Leaf looking to brew more

    By Tuhina Anand

     

    Coffee Bean & Tea Leaf (CBTL) which was launched in 2008 in India is eyeing to capture a segment that has grown up to coffee culture and now is migrating to the next level of coffee as an experience.

     

    The future growth path for many of the players in the cafe business is to offer a different experience depending on the TG. India having gone through the phase where cafes have established themselves as a ‘hangout’ place, there is a need for a better offering for those looking for more. Hence, there is Cafe Coffee Day coming out with its Lounge concept or players like Costa Coffee and CBTL stepping in to provide that evolved ambience. With Starbucks set to enter India, this space will only see more competition.

     

    The organized coffee chain retail market is said to be approximately Rs1,000 crore and has been steadily growing. For CBTL this is where opportunity lies for future growth where, having started with one outlet in Select CityWalk in Saket in New Delhi, in the last three and half years they have expanded to 17 stores, including three outlets at airports, in Delhi, Mumbai, Bangalore, Kolkata and Pune.

     

    Talking about their growth plan, Vinay Gopinath, Head, Marketing, Pan India Foods, the company that has brought CBTL to India, said, “We are looking at expanding our presence and clocking in at 25 stores by May this year. There are plans to expand in a big way in Pune, Bangalore and Kolkata. We are also looking to enter newer markets like Jaipur and places like Ludhiana and Chandigarh in Punjab.”

     

    The expansion for CBTL is along four formats including high street, property inside a mall, kiosk model and high profile office building. There are around 2,000 organised players in the cafe segment including CCD, Gloria Jean’s, Costa Coffee, Barista and Mocha among other stores. As Mr Gopinath says, they have been growing their store presence by 25 per cent yoy and that has been the case with many leading players in this segment.

     

    CBTL worldwide has around 812 outlets and their USP, as Mr Gopinath describes it, is having the best coffee on their menu coupled with their mojo effect plus offering high-quality food and the best music.

     

    However on pricing, Mr Gopinath clarifies, “Yes, we do charge a premium but that is only on our signature offering. Pricing of, say, our cappuccino or any other regular product will be as competitive as any other cafe.

     

    “At CBTL we cater to the upper strata of market and it’s definitely not a hangout place. It’s about better experience. Our TG would be anyone 20 plus to 35 who has traveled around the world and looking for a better coffee experience. There are many who are looking for this experience so there is opportunity galore. The positive thing is that finally a segmentation is happening and gradually a pyramid is being drawn in terms of coffee consumption at various places. With increase in coffee consumption outside homes there is immense scope to grow the top end of the spectrum.”