The India International Coffee Festival (IICF) is in full swing at the moment so the time is ripe to keep an eye trained on what is happening in the Indian coffee market at the moment. With their developing economy and burgeoning status in the world on a financial level, the South Asian country is one that many a company wants to secure business in. With it being the second most populous nation in the world, it is somewhere that will prove to be a very valuable location for investors in the coming years.
When it comes to coffee shops and our booming coffee culture, the Western landscape is dominated by a number of large entities, each with their own bases of power in specific locations. One such company is Starbucks, at the Seattle based coffee chain are visible nearly everywhere you look and they, like their rivals, are planning expansion. India is country ripe with potential and represents a nation filled with opportunities.
Coffee consumption in the Asian nation is on the increase. Figures released suggest that if current trends continue then India will consume more coffee than it exports within the decade, and for a country that is consistently ranked as one of the premier exporters in the world, that is some figure that showcases how popular the beverage is becoming. Yet, already firmly established, is a domestic coffee culture, one that Starbucks may have trouble breaking into. And that fact is not lost on the current market leader.
Café Coffee Day (CCD) are currently the premier when it comes to coffee shops in India and they have remained bullish in the face of Starbucks’ presence on the subcontinent. The brand established in Bangalore have a gigantic head-start when it comes to brand awareness as, even with western culture seeping into the country, the vast majority of the near 1.2 billion population are judged to be unaware of Starbucks’ brand. Café Coffee Day already have over 1,500 outlets across India, compared to the 34 displaying the Starbucks logo and through the American company plan to expand, Café Coffee Day plan to open a further 500 new branches in the next twenty-four months.
‘We navigate around consumers, not the competition,’ Mr. Ramakrishnan, president of marketing at Café Coffee Day told The Wall Street Journal.
Bullish words indeed.
Being a primary name in the scene, so to speak, Café Coffee Day’s consumer base features many within India’s bulging middles classes and they have subtly begun to ensure the retention of that demographic by rolling out tailored products that are proving popular. They are also making moves to procure those who are willing to spend more for that premium coffee experience by opening up premises which have more space, better furniture and higher prices; effectively targeting the type of consumer that Starbucks are expected to chase.
Starbucks, with is Indian partner Tata, opened its first outlet just over twelve months ago in Mumbai. Mumbai has the highest GDP in the nation and the introduction of the company has been a hit which has seen a moderate expansion both in the western city and to other locations around the country. With tea still the dominant drink, but coffee slowly clawing away at its market share, there are plenty of opportunities for expansion. ‘India’s still nascent consumption of coffee leaves room for rivals like Starbucks, and anyone else that wants to set up shop here,’ Mr. Ramakrishnan says. But as he concludes, the entrance of the global chain will generate more interest in coffee and expand the industry further. An industry, currently led by Café Coffee Day who are ready to go toe-to-toe with their American counterparts.