Costa Coffee, one of the major players in the Rs 1,000-crore organised coffee business in India, aims to consolidate its position in the market through brisk expansion. The UK-based coffee retailer, which entered India in 2005 and operates 70 outlets through its franchisee Devyani International, has invested Rs 30-35 crore for setting up 50 to 60 Costa cafes pan-India, by the end of calendar year 2011. A ?menu-churn? is also expected to take place.
Santosh Unni, CEO, Costa Coffee said, ?There?s a spurt in the coffee retailing business in India, with new entrants in the market and changes in consumption patterns. The entry of Starbucks will bring about healthy competition. Costa wants to tap this growing coffee market. 70% of our stores have turned profitable. We have achieved break even, and hope to maintain a compounded annual growth rate (CAGR) of 15-20% till FY14.?
Over the last five years, Costa Coffee has saturated the Delhi-NCR region with 45 outlets. However, its presence in other parts of the country has been limited. Unni says, ?Delhi-NCR has been our prime location. We?re present there in most high streets, malls and in the international airport. We?re planning a west-centric expansion now, along with a focus on Chennai and Punjab.? Talking about Kolkata and the east, which saw the closing down of Costa outlets due to operational issues, Unni adds, ?Kolkata is very much in the horizon for year 2012. Our visibility in the east shall increase.?
The organized coffee segment in India is estimated to be growing at 40%, says an analyst who wished to be unnamed. There are about 1400 branded coffee shops, dominated by Caf? Coffee Day, while Barista, Costa Coffee and Gloria Jeans Coffee are other important players. The major factor influencing this growth has been the transition of certain sections of the population, from traditional tea-drinkers to coffee-lovers. Unni mentions, ?The good thing about coffee is that, unlike other beverages, it has not been slotted into a commodity pot.?