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BARISTA VS CAF COFFEE DAY

Coffee
India is the largest consumer of coffee. Coffee is now the worlds 2nd most valuable legal commodity after oil. Coffee is grown in 50 countries,consumed in every city on earth and employs 24 million people worldwide

Coffee Retailing in India


Estimates : By 2005 , India would be home to 5000 coffee houses Sunrise sector expected to notch up Rs. 3000 crs by 2005 For a generation high on appearances , money to spend,coffee bars are a timely mean between five stars and Udipis

North-South Divide
Per capita annual consumption in India
300

250

Consumtion in grams

200

150

240
100

50

55
0

5
Av e rage India North India South India

A NorthIndian drinks on an average I cup of coffee in a year.There is a great potential for the market to grow.

These cafes allow customers to spend as much time as they prefer In these cafes the staff are not glorifies waiters but are brewmasters ,professionals in the art of making coffee A large chunk of coffee retailing happens through the small coffee outlets The single largest market for Indian coffee remains the domestic market

World coffee market statistics(in mn 60 kg bags)


For the year ending Sept 30,2002 Production
Total use Ending Stocks Ending

1997 199 1999 2000 200 2002 2003 8 1


103. 8 108. 9 29.1 27 97.5 108. 4 103. 110. 1 3 24.7 24.3 24 22 113. 3 116. 5 21.3 18 117 110. 7 114. 114. 7 3 23.6 20.1 21 18 122. 1 117. 9 24.3 21

The product
The product is undoubtedly coffee.But Caf on its agenda has much more than coffee.It is a place that provides a nice ambience,good music,a nice plan to spend some time out with friends.It is much.. more than coffee.

Since the product is more about emotional & self expressive benefits the key to success will be :

1. Branding ,branding & branding


2. Segmentation,targeting & positioning

The Domestic consumption


Present domestic consumption of coffee is 60000 tonnes Per capita consumption is 46 grams According to some estimates in 3 years India's production of coffee Domestic consumption Caf required Number of caf at the end of 2002 Number of caf at the end of 2003 Number of caf at the end of 2004 We will never have more than 6000 caf 300000 tonnes 75000 tonnes 50140 caf 256 caf 600 caf 950 caf

Therefore there will be a great potential in packaged coffee marketed as an FMCG.The Caf culture will spark off domestic consumption.

Break up of consumption
Coffee Cafe Development Break-up in India

East 5%

We st 9% North 41%

North South East We st

South 45%

Market size of players


Approximate market size (100 crores)

Qwiky's 10%

Othe rs 5% Barista Caf Coffe e Day

Caf Coffe e Day 20%

Qwiky's Barista 65% Othe rs

Price Segments

Super Premium

Yantra & 5 star hotels Barista Caf Coffee Day,Qwiky Darshinis,Udipis

The middle segment Bottom end-wide open

Comparison of 2 Brands
Barista Barista coffee company February'2000 108 1000 square feet 250 350 customers Caf Coffee Day Amalgamated Bean company 1996 52 110 square feet 200 800 customers

Company Started business Number of Cafes Avg. area per caf Outlets proposed Avg footfall per outlet

The Challenges-3 Years hence


How do the brands remain relavant with the times??
How do they respond to competition from international players like Star Bucks?? How do brands maintain quality standards along with rapid growth? What should be the strategies in the new paradigm? Product Mix

Brand strategy & positioning

The Dilemma
Should Barista target the small niche market or huge mass market??

Solution !!!!!!!!!!!!
The launch of a subbrand called Amoeba endorsed by Barista

BARISTA
Amoeba
From Barista

Targetted to elite niche market

Targetted to mass youth market

The Brand Brand Essence :Change/Adaptablity

Amoeba
From Barista

Core identity:A quality service along with an element of surprise,mystery & excitement.Adaptable to changing times. Value proposition:A value offering with quality & excitement. Positioning: Expect the unexpected

A brand built mostly on surprise promotions & events.

The Change factor


The Amoebas will wear different uniforms daily. The crockery might be changed from time to time. There will be surprise promotions & winners. There will be surprise items in the menu . Even the settings might be changed.

Targetting & Positioning


Barista Amoeba Amoeba

Target market :Executives,Business


man,professionals,elite class Postioning :International experience To relax & unwind

Youth & Genaration X

A quality offering at affordable price delivered with excitement

Lines
Barista

Amoeba Amoeba

Cafes

Retailing

Cafes

Vending

Retailing

The product
2 absolute different kinds of cafes . Barista Amoeba Amoeba 50 % coffee,50 % snacks & food,more variety of Indian snacks to increase

Product : 65 % international coffee 25% international snacks like Italian & Mexican ,10 % Indian snacks like

Pastries ,puffs etc


Coffee type : Mostly Arabica

footfalls & revenue.


Mostly Robusta

Contd
Barista
Ambience:Relaxing,soft music/

Amoeba Amoeba
Exciting,Pop music

Classical music,books & magazines


Games like chess,scrabble. Service :by educated Baristas Customized Coffee

contests ,association
with sportstars,celebrities

Self service

Self made coffee

Pricing Strategy
Barista
Premium priced.An average bill for 2 will be Rs 150.

Amoeba Amoeba
Priced a little higher than CCD.Eg A coffee costing

Rs 18 at CCD would cost Rs 20.An average bill of Rs 50 .Combo meals Work on margins
Creating differentiation International standards

Work on volumes
Focus on cost reduction through efficiency

Place
Barista
Ownership :Company owned Focus :Consolidation Locations:Most premium areas

Amoeba Amoeba
Franchisees,Master franchise : Company owned Expansion with standards Crowded youth areas

Prestige clubs,Golf courses


Alliances:Bancafe, Blue chip corporates

Shopping malls,multiplexes

Good college campuses

Promotions
Barista
Corporate membership Personalized CRM

Amoeba Amoeba
Student membership Monthly winners

Credit accounts
24 hours service

Sports promotions
Inhouse events like MTV, Music releases

Sponsorships of Music
Concerts,Art exhibitions,

Cross promotions with


Cross words,Music world,Planet M,Apparels

Contd
Barista

Amoeba Amoeba
None

Brand Ambassador:

Amitabh Bachchan

No inhouse selling of apparels,shoes,Cds etc.Though some show windows might be there in case of cross promotions & sponsorships.

2 brand strategy
Successful examples like Gilette Happy news & Holiday Inn hotels from Mariott. Advantages of a double brand policy: Brands can focus on their segments. Barista can become a monopoly in its niche segment. Both the brands can have a rub off effect from each other. The Brands can enrich & revitalize themselves. Parent-Child relationship Parent:Successful,sophisticated Child:Energetic,Aspiring

Brand Ambassadors
Barista

Amoeba Amoeba

Caf Coffee Day


Caf Coffee Day currently owns and operates 52 cafes in all major cities in India. It is a part of India's largest coffee conglomerate named Amalgamated Bean Coffee Trading Company Ltd.( ABCTCL ), Rs. 200 crore ISO 9002 certified company.

The first Caf Coffee Day was opened in Brigade Road in 1996, Bangalore's busiest shopping area. At that time, the caf culture had still not arrived in India. In that sense, Caf Coffee Day is the pioneer of the concept in India. Over the years Caf Coffee Day currently owns and operates 79 Cafs in all major cities in India.

Mission Statement

The Cafe

Each caf, depending upon its size attracts between 1000 and 2500 customers daily, mainly between 4pm and 7 pm.

Product Mix

The significance of the Colours RED stands for leadership and vitality. It also stands for passion ( for coffee). The GREEN stroke harks back to our coffee growing heritage and the coffee plantations that we own.

Rapid expansion
Expansion spree Revamp of image Change in logo Redesigning interiors New range of colours New menu Change in crockery Change in baseline a lot can happen over coffee

200 outlets ,400 coffee retail stores,

turnover of Rs.650 crores by March 2004.


Coffee day- Vending More than 3000 vending machines at high traffic zones serving fresh filter coffee by march 2004 For travelers , office goers who are a hurry

Target segment
An in-house research shows that Caf Coffee Days customers are mostly young college students and young professionals:

Age between 15- 29 yrs - outlets designed to look young and trendy vibrant colours lime green , yellow, purple , orange

Positioning
World class coffee experience at affordable prices. It specializes in Coffee and tries to create an ambience, wherein one can relax and enjoy their cup of coffee.

Customerss profile
Customers of Cafe coffee day

Females 40% Males Females Males 60%

Age profile
Age Profile of Customers
40 35

37.9

Percentage

30 25 20 15 10 5 0 >45 35 - 44 30 - 34 25 - 29 20 - 24

22.4

24

5.5

5.3

3.3
15 - 19

Age Group

USP
Exclusive relationship with plantation division of the amalgamated beans co Enjoys cost advantage because of diest access to coffee beans from cos 5000 acre plantations

Provides world class products at affordable indian prices

Competitors
Barista Qwikys Craze- not just coffee Small restaurants & Stalls

Future Threats
Singapore based Coffee Club Ltd. all set to enter Indian markets Starbucks Fast moving consumer goods company Hindustan Lever Ltd (HLL), in the line of Cafe Coffee Day and Barista, may soon open coffee parlours in the country.

Any customer who bills a minimum of Rs 100 on a single bill is automatically eligible for membership to the Cafe Citizens Programme. Members will also receive surprise gifts from Indiatimes Shopping when they reach a total billing amount of Rs 2,000, Rs 5,000, and Rs 10,000.
Regular feedback from customers- feedback forms in all outlets t know tastes and preferences Juke boxes in few outlets

Pricing
The price of items ranges from Rs.5 and goes up to Rs.35, which is a very reasonable rate and does not pinch one's pocket Coffee products priced between Rs. 10 Rs. 35 10% - 20% cheaper compared to other coffee chains in India

The coffee starts at Rs 15 and desserts go up to 60 bucks (for a sinful ice cream sundae)

Promotion
BHARAT Petroleum Corporation and Cafe Coffee Day, Ltd, announced an alliance to open Cafe Coffee Day outlets in select BPCL petrol pumps. The outlets will be stand-alone cafes or kiosks or coffee counters at the BPCL retail outlets.

Customer satisfaction and retention


Bangalore, July 1, 2002 - Caf Coffee Day announced the launch of the first customer loyalty program"Caf Citizens Program" launched through NetCarrots Loyalty Services to reward regular customers of Caf Coffee Day.
Caf Coffee Day is the first caf chain in India to introduce a customer loyalty program.

Customer Profile
Customer profile of Barista

Males 40% Males Females Females 60%

Common trend amongst all the coffee bars


They all go for youngsters The outlets are designed for young people in the age group of 15 - 29 to hang out - preferably for hours, no sweat. With air-conditioning and music, message boards full of wise-cracks, indoor games such as chess, scrabble and pictionary. These pubs are virtually an extension of the college canteen, but thoroughly upscale versions.

What sets Barista apart??????


From the point of view of:
Customer - It comes across as a pepped up, modern version of Indian Coffee House in the 70s. Company The coffee bean, the machine and the brew master

Some Facts
Promoted by Java Coffee Company, now along with Tata Caf in Feb 2000. Total Value Rs.75 crores Total area Over 1,00,000 sq. ft. 35,000 customers any day, average time spend 45 minutes. 20% visit daily and 46% walk-ins are women.

Existing Strength
Planning to open 250 outlets and achieve sales turnover of Rs. 100 crores by March 2003. The word 'Barista' means 'a bartender / expert in the brewing and making of coffee', and is Italian in origin.
They have off-premises outlets like the ones Barista has opened at ICICI, GE, e-Excel, Triburg and Taj hotels. Opened up recently in Srilanka.

Target segment
Average age - 21 yrs Up market Caf Professionals, Working couples, and families in SEC A & B categories who detest the loud ambience of coffee pubs Has weaned away customers who used to frequent 5 star hotels for good coffee.

Product - Coffee
Uses 92% Arabica The reason for it being costly. Taste Bitter Pays more attention to coffee rather than ambience. More than 10 varieties.

Sources of Coffee
Along with coffee procured domestically, it also sources coffees of foreign origin from their respective markets. The latter facility is a strong point for Barista, in that Italian coffee preparation style is central to international coffee drinking habits.

Product - Mix
From traditional favourties such as Cappucino, Espresso Macchiato, Espresso Italianno, Cold Brrrista, Frozen Coffee, sandwiches, and variety of desserts, breads like Panini Cappucino Rs. 40, Usually above Rs.30

Experience The Differentiator


Overall it has been as a coffee experience but not restricted to coffee. Though 67 per cent of its revenues come from beverages, Barista, seeks to be more of a lifestyle experience. A place to hang out and not a just a caf or eating joint.

The Cafe

Experiential Life Style Brand

Choice of locations
Basically metros or larger towns. Choose locations with a high turnout of youngsters and residential areas for the upper segment. Not much of attention is paid to parking or other facilities except for the size of the caf.

Logo

Positioning

Positioning
Seeks to position itself as Fine Caf and not just a Coffee Pub the way others have positioned. Espresso served in a soft caf ambience at the right price. Ambience and experience of a typical Italian neighborhood espresso bar.

Promotions and Tie - Ups


Absolutely Everyday Contest - the perfect vehicle for the Star TV and Barista to reach out to its audiences as it combines the best of the entertainment world with good coffee. Tie ups with Singapore Airlines, Evian, CNBC, Planet M, PVR Cinemas

With Lacoste To sell their products

Competitors
Other coffee bars
Qwikys Caf Coffee Day Craze Not just Coffee South Winds

Pubs, College Canteens, Hangout Joints

Employees
They are trained under genuine Italian Baristas
A Barista competition for employees - The Barista who wins the event will represent India at the global competition in Boston.

What are they???


Whats Barista? Term for a coffee brewmaster and the people serving are called Baristas. Whats Amoeba? Dynamic, Vibrant, Lively. Keeps changing its form. The people serving will be called Amoebas.

We welcome the coffee pub culture.


The gap b/w the struggling coffee vending machine at the corner store & the expensive 5 star coffee shops has been filled. A quiet revolution is sweeping urban India with the proliferation of Italian style coffee-bars.

Proposals
Shop Online: bringing the coffee culture to the younger generation , which is constantly on the internet, surfing & chatting. Portals are the way to mkt coffees. Educate the customers about the virtues and finer pts of coffee drinking Business Gifts & Rewards : make good business sense. Coffee break essentials: choc. Medallions, etched barista glass mugs, coffee maker

Cont..
Barista Cart: a lightweight card with a fully automatic espresso machine with a built in chiller..can be wheeled to any location

What Customers Say????


Barista, relaxing, chilled out Just to your senses. The atmosphere here smells so cool Its easier to change ones religion tan ones coffee WORK: the stuff that you do b/w coffee breaks East or West, Barista is the best.