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Cafe Coffee Day: Story of the Home-Grown Coffee Chain

India is a nation that adores its tea. In fact, not just Indians, but the world is also fond of the famous Darjeeling Tea. But, talking of the current times, coffee is also a beloved beverage in India, a country that has been sipping tea since forever. The first-ever coffee chain opened in India was Cafe Coffee Day (CCD). V. G. Siddhartha is the man behind this phenomenal coffee chain. The parent of the Cafe Coffee Day chain, Coffee Day Global, was incorporated in 1993. V. G. Siddhartha opened the first outlet of CCD in Karnataka, back in 1996! CCD is a pioneer in promoting coffee in this tea-loving nation, and the following case study explores their journey.

India is a nation that adores its tea. In fact, not just Indians, but the world is also fond of the famous Darjeeling Tea. But, talking of the current times, coffee is also a beloved beverage in India, a country that has been sipping tea since forever. The first-ever coffee chain opened in India was Cafe Coffee Day (CCD). CCD is a pioneer in promoting coffee in this tea-loving nation. But they didn’t have it easy. So, here is a story of their journey.

The History of Cafe Coffee Day

History of CCD

V. G. Siddhartha is the man behind this phenomenal coffee chain. The parent of the Cafe Coffee Day chain, Coffee Day Global, was incorporated in 1993. V. G. Siddhartha opened the first outlet of CCD at Brigade Road, Bangalore, Karnataka on July 11, 1996. He did this with an initial investment of ₹ 1.5 crores. The coffee, tea, and the delicious side dishes were hard to resist. Hence, the chain expanded rapidly.

CCD expanded outside Karnataka and to other cities in India, with more than 1000 cafés open across the nation by 2011. To keep up with the changing trends, they undertook some revamping exercises as well. This included a change in the logo and interior of the stores.

Talking of the strategy, the company is vertically-integrated so as to cut down the costs. They own plantations, grow coffee, make their coffee machines, and make all the furniture for the outlets. They are currently the largest producer of arabica beans in Asia and exporting the same to various countries like the U.S., Europe, and Japan.

The biggest shock for the coffee chain and all the devotees was the death of V. G. Siddhartha. He committed suicide under the pressure of a private equity partner and other lenders as per the information from some reliable sources.

Major Challenges to Cafe Coffee Day

Just like any other big name in the market, Cafe Coffee Day had its own share of challenges. The biggest challenge, in the beginning, was to survive and revolutionize the beverage consumption in the country. It is evident how Indians adore their tea but we can see a shift now. People are crazy over coffee too.

Another challenge faced in the later years was the rising competition. In the beginning, CCD was something people related to the coffee shop culture in India. But as the number of players in the market increased, the home-grown chain struggled to keep afloat. The competitors included international names like Costa Coffee, Starbucks, Barista and some other domestic players based on the coffee shop culture.

Overcoming Challenges: 3 As of CCD

3As of Cafe Coffee Day

To survive amidst the tough competition, Cafe Coffee day has built a strong retail strategy. They named it the 3As strategy.

1. Affordability

The best best thing about CCD is their pricing indeed. They keep it aspirational yet affordable. And this is what makes CCD outlets the best hangout spots for students and young employees who don’t have much to spend. Even after the revamping exercise, their prices were fairly lower in comparison to that of the rivals.

2. Accessibility

The factor which makes CCD popular and close to the customers’ hearts is the fact that it is not limited to the metro cities only. Cafe Coffee Day took coffee to even the small towns and cities across India. Moreover, the quality of products and the kind of experience is the same irrespective of the location. This is because they believe in serving a great experience along with the coffee.

3. Acceptability

“Let’s catch up at CCD,” is very familiar for Indians. Now, coffee is like a means of bonding and spending time together while relaxing and unwinding. Since, CCD focuses on both, coffee and quality experience, it is more than a coffee house for people. For some, it is the way of life!

CCD’s Marketing Strategy

CCD's income over the years

As mentioned earlier, the marketing strategy of CCD is based on the 3As. These have significantly contributed to the brand’s growth.

Another remarkable thing is their presence on social media platforms. It is great to see that they’re upgrading their strategies as per the latest trends. CCD has over 5 million fans on their social media pages and consistently engage with their followers on Facebook, Instagram, Twitter, Youtube, etc. Since their target group is the youth of India, stepping up the social media is a smart move.

CCD also ensures that the customers are actively engaging. And one of the best example is their ‘Latte Art Festival’. They served coffee with unique and creative latte art designs. It was a great hit indeed.

The Bottom Line

Recently, CCD has tied up with several other fast-food outlet chains. It has announced a tie-up with Wow! Momo serving momos at CCD outlets. This project has already started in Bangalore and they’ll soon introduce it in 30+ outlets across India. CCD has also finalized several strategic partnerships with Mad over Donuts, Baskin Robbins Ice-creams, Chef Bakers, and Indo Nissin. So, we can say that despite the difficult situation, Cafe Coffee Day is heading strong.

Read: Case Study on Starbucks Teavana

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