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Brewing Lifestyles

November 8, 2007 3 comments

There’s Big money to be made in the Indian Coffee Market and the Amalgamated Bean Company is the first to realise this. While ABC always had a variety of beans and an interesting concoction of brews to offer both from their own plantations and from other imports, the indian consumer wasn’t so coffee wise. Put simply, coffee drinking isn’t a culture that is intrinsic to us like the Israelis or French and there are few connosieurs; much like America not too far ago. But Cafe Coffee Day or CCD, is changing things fast. And the way they are doing it is reminiscent of the manner in which Starbucks did it – by creating a lifestyle.
So lets start with Starbucks and US in those days when people were growing Sleepless in Seattle because of Meg Ryan and well, caffeine. Starbucks realised that there is big money to be made and it was the first to respond with lifestyle chains. Of course, with Americans and Indians, Movie Stars define Life Style Benchmarks & with a little help from Meg, this is where they’ve come.
Though i respect what Starbucks created, I must also confess that they aren’t the best of coffee makers and this point is subtly put to rest by the poor performance of the chain in places which have cafe’s as pre-established businesses. Consider Israel, they don’t have a single store in the bustiling metropolis of Tel Aviv that boasts of 600+ Cafes! Or Take France where the average Starbucks drink costs you lesser than what it would in any of the old cafes; the exact opposite of the US. Back to my first premise, therefore, Starbucks success is more lifestyle than coffee.
CCD, started a few years back, being the second one to realise the potential moolah in this business. Although the first one was Barista, a chain now owned by the Italian Super-chain – Lavazza, which it bought over from Sterling Infotech (wtf? yeah, me too) for about 480 Cr (about 120 Mil USD); all they could come up with was mugs. Now, You wanna make a lifestyle, you gotta do better than Mugs!
Long story short, Barista spoilt its huge advantage of being the first one to start to CCD; a competitor who didn’t miss the opportunity. Perhaps a catalyst to their phenomenal growth was the fact that they have a good coffee to back up with it. Given Lavazza’s takeover, I guessed that Barista would begin serving better coffee, and it had when I last visited them but I still didn’t see the makings of a lifestyle.
Contrast this to CCD, which has mimicked Starbucks so Well: All that has changed is who they partner with, which too has been largely governed by who is the best bet in the Indian Market as a partner. Snapple (drink if you don’t want coffee), UniBic (cookies), Airtel (WiFi)… they’ve structured it all, and they haven’t forgotten Coffee. And with the chain opening up a cafe almost every working day of the year around the country, Starbucks better make that move fast or it may be too late.

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