The CCD Story

Recently I made a visit to the CCD café near Mahabalipuram. To beat the scorching Chennai sun I ordered a cup of my favorite café frappe. I spoke to the waiter about their STP strategy (of course in his lingo). He told me that their targeted segments are tourists in need of a relaxing break, people travelling to puducherry and looking for a stopover to rejuvenate themselves and of course the regular students (majority from GLIM) who drop in every now and then hoping that a lot could happen over coffee. Apart from their regular espressos, cappuccinos, café lattes; they sell a lot of birthday cakes and sandwiches.

The first CCD outlet was set up on July 11, 1996, at Brigade Road, Bangalore, Karnataka. Following this, CCD crossed over 1000 cafés throughout the nation by 2011. They have more than 1300 outlets. The number increases almost every week. A ‘meter’ on their official website (Cafecoffeeday.com) keeps continuous track of the number.

CCD positions itself as a much more than a conventional coffee shop. It is seen as a ‘fun place’ where youngsters come in groups and have a good time over a cup of coffee. CCD hence is perceived as a hangout zone, meeting place for business purposes, enjoying one’s private time etc. CCD also provides facilities like Wi-Fi and Worldspace and other merchandise in order to pull in more customers. So it becomes extremely difficult for its competitors to replicate the same experience which makes CCD the market leader.

Looking at the marketing strategy of CCD, the company is known for being vertically integrated to cut costs: from owning the plantations, growing the coffee, making the coffee machines to making the furniture for the outlets. The machines cost them 1.2 lakh each, which they say is half the cost of an imported coffee machine. The maintenance cost of CCD's machines is also less than foreign machines. Cafe Coffee Day is part of Amalgamated Bean Coffee Trading Company, the coffee conglomerate that was the first to roll out the ‘coffee bar' concept in Bangalore. The retail chain serves the coffee it grows on 7,400 acres of its own estates plus another 2,500 acres of managed estates. The group also sources coffee from 11,000 small growers.

 

They have regular coffee shops as well as lounges (although none is available at Mahabalipuram). The rationale behind lounges is that those teen agers who started consuming out of home coffee at CCDs expect more from the place when they grow up personally and professionally. Hence CCD lounges cater to their need by serving a broad spectrum of food and non-alcoholic beverages. CCD has also entered into a tie-up with the Ginger Hotels of the Taj to cater to business executives (apart from the young crowd it has mainly catered to).

The CCD cafes and lounges within the country are rising by the day and there could be a day when every other street in India will have a CCD café of its own.


Anuj Rawat 
FT13410