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More than half the urban population is yet to set foot into a café, which is a huge opportunity for growth, according to Café Coffee Day.
At least 54 per cent of the urban population in the age group of 17 to 35 has not been to a café even once for reasons ranging from I-haven’t-yet-got-a-girlfriend to I-am-a-serious-person. “So, we have enormous room for growth here,” says K. Ramakrishnan, Marketing Head of the country’s largest café chain – Café Coffee Day.
Ramakrishnan launched the café chain’s first Coffee Day Square in Chennai on Wednesday, its fourth in the country. It currently has over 2,000 outlets in four formats — Kiosk, in small format; Café, a 700-800-sq-ft dine-in; Lounge, a more elaborate format in about 1,300-1,500 sq ft; and Square, a business-class outlet spread over 2,000 sq ft with a range of products to offer.
All these stores are run by the company itself, as “we do not prefer the franchisee model”. According to him, depending on the format and locality, each outlet takes its own time to break even. “There are stores that broke even in just seven months and there are some, seven years but yet to break even.”
He says on an average, 250 people visit each outlet every day with an average billing size of Rs 150.
CCD has a presence in 210 towns across the country. “This is proof enough that café is not just an urban phenomenon. People in tier III towns also long for café experience,” he said. CCD is a part of Rs 5,000-crore Amalgamated Bean Coffee Trading Co Ltd.
The café chain plans to launch at least 400 more outlets in the next 2-3 years across various formats. The café market is getting cluttered with many domestic and international brands. However, CCD is way ahead of its competition. With a little over 200 outlets, Barista Lavazza is its closest competitor. “We are exploring various opportunities – be it a highway, a hospital or an educational institution,” Ramakrishnan said.
We ask him whether CCD would come out with a newer format. He said why not? “After all, nothing is cast in stone. Our immediate goal post is to have at least 2,500 outlets by 2015.”
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