The Hindu Business Line : Coffee Day defers target for new cafes to year-end

CAFÉ Coffee Day, the coffee retailing arm of Amalgamated Bean Coffee Trading Company, which had originally planned to have 200 cafes by March this year, has pushed that target to the year-end. It presently has 147 cafes and 100 kiosks, which it plans to increase by another 100.

The chain's Head-Marketing, Ms Sudipta Sen Gupta, said it has set a target of Rs 100 crore as turnover for this fiscal. For the year ending March 2004, its target turnover was Rs 60 crore. However, Ms Sen Gupta refused to disclose whether this was achieved or not.

Coffee Day's expansion is likely to see Chennai adding five more outlets, Mumbai 10-15 more, Delhi another 17-22 to its existing 18. The chain is also likely to further expand in smaller centres that include Madurai, Salem, Varanasi, Kochi and Thrissur.

Also among its immediate plans is the setting up of outlets inside huge office complexes. Boosted by the success of such a set-up in Bangalore's International Tech Park, it plans similar outlets in Chennai and Hyderabad, said Ms Sen Gupta.

Coffee Day has also identified three highways — Chandigarh-Delhi, Bangalore-Mysore, and Chennai-Bangalore — along which it would set up its cafes.

While South has been the more profitable region for the chain, West is fast catching, she said. It is also learnt that the proportion of revenues contributed by coffee has decreased from 90 per cent to 70 per cent after the chain started expanding in the North; the latter has contributed to the increase in the share of food items, which now currently stands at about 30 per cent of the turnover, Ms Sen Gupta said.

On the organisational front, Café Coffee Day has broken up its set-up into 13 business units, geography-wise, for the sake of managerial convenience.

Two or more states are clubbed together to form a business unit. Henceforth, unit chiefs (and not city managers, as was the case until now) will report directly to the CEO, she said.

Under the set-up, for instance, Tamil Nadu and Kerala will form a unit; so will Karnataka and Goa, and Gujarat and Rajasthan. "Each business unit will have to be profitable," she said.

Coffee Day is in talks with student organisation AIESEC; this is to enable overseas students get an opportunity to work in various capacities in the chain while at the same time learning from them about their countries, Ms Sen Gupta said.

Such tie-ups will help the chain when it expands into overseas markets later this year, she said. Coffee Day has identified 50 locations in 10 countries of Eastern Europe, West Asia, among others.