Cafe Coffee Day plays up the R&D card to dent cafe market

Written by Darlington Jose Hector | Darlington Jose Hector | Debojyoti Ghosh | Debojyoti Ghosh | Bangalore | Updated: Dec 11 2013, 14:47pm hrs
CCDCCD, which is aiming at 2,000 outlets by December 2015, currently boasts of around 1,550 outlets across the country.
Research & development seems to be the new catch-phrase at Cafe Coffee Day (CCD), the retail wing of Indias largest coffee conglomerate, the about Rs 1,500-crore Amalgamated Bean Coffee Trading Company. CCD has put together a strong 30-member innovation and research team, including food and beverages (F&B) experts, coffee specialists, organoleptic experts and biochemists, to brew a new culture of innovation in the company.

Innovation is not just about bringing in new products but tracking trends that will be in the market in the next six to nine months and how do we make those trends relevant to the Indian palate. We get people who are experts in dairy technology, F&B, including experts in desserts, bakery and non-bakery products, Amalgamated Bean Coffee Trading Company (ABCTCL) director Venu Madhav told FE.

The chains innovation core team, which includes experts in specific food categories, are aided by a central brand team who provides market research intelligence on trends in F&B and youth behaviour and operations team for implementation at the cafes. The companys R&D facility at Chikmagalur, Karnataka, also provides inputs on shelf life, processing, large-scale production of a specific product and managing the entire supply chain. The R&D team has a good mix of food technologist, agrologists and mixologists.

A recent innovation is the crunchy frappe, wherein customers filled us in on how they would like some variations in the existing frappes. Our research threw back the trend of a liquid snack worldwide. The combination resulted in creating a mixture of crunchy oreos in a creamy chocolatey meltdown. Another creation has been the egg wrap, a light lunch or snack option. It is a hit with our consumers, said Madhav.

Currently the organised cafe market in the country is pegged at around Rs 1,200 crore growing at 15-20% annually. CCD, which is aiming at 2,000 outlets by December 2015, currently boasts of around 1,550 outlets across the country.

In terms of beverages, we have experts in dairy-based and non-dairy based products. We also have equipment experts who decide on the kind of blenders that should be used to create a certain thickness of a particular drink, he said.

Recently the worlds largest coffee retailer Starbucks forayed into south India with the opening of an outlet in Bangalore, a city thats home to Cafe Coffee Day, which opened its first outlet in the countrys IT capital way back in 1996 on Brigade Road.

Coming from Karnatakas coffee heartland, VG Siddhartha, founder of CCD, had expertise in coffee trading that eventually helped him sense the potential of the coffee business.

Starbucks entry into Bangalore comes a year after the chain set up shop in India and established its presence across major metros. Tata Starbucks, which is a joint venture between Tata Global Beverages and Starbucks, already has around 25 outlets in Mumbai, Delhi-NCR and Pune. Starbucks had plans to open more than 50 outlets in its first year of operation but has only managed half of the target due to difficulties in getting good real estate.

Marketing experts point out that for CCD, the main differentiating factor from the competition is positioning the brand as a value-for-money venture, which caters to different sets of customers through its formats Cafe Coffee Day, Coffee Day Lounge and Square.

According to brand experts, the over15-year-old company is already a pioneer brand in the country. But with the increasing competition it has become important for CCD to differentiate itself and benchmark its standard in terms of better customised service.