Is brand CCD a strong enough brew?

Meenakshi Verma Ambwani New Delhi | Updated on July 31, 2019 Published on July 31, 2019

CCD, the brand that introduced the cafe chain culture in India, is the largest player in this space with over 1,700 outlets   -  AFP

With Coffee Day Enterprises battling its biggest crisis since its inception over two decades ago, Café Coffee Day’s (CCD) brand equity may just prove to be its biggest strength.

Cafe Coffee Day’s logo, which is known for its bright red colour, soon turned to black to mourn the death of the company’s founder V G Siddhartha, on its official Instagram and Twitter handles.

Paying homage to its founder, the company on its official Twitter handle said, “We remember our beloved Chairman V G Siddhartha with pride and miss him dearly. We stand committed to his vision and will continue building on its legacy.”

Bittersweet memories

From recalling their first visit to a CCD outlet to sharing stories about how the chain has over the years, become the key venue to meet with friends or business meetings, consumers took to social media as well, reminiscent about their memories.

Ace cricketer Ashwin Ravichandran tweeted, “My first memories of going out with friends and having a cup of coffee happened only with the inception of Cafe Coffee Day. Sad news #RIPSiddhartha #cafecoffeeday.”

Veteran brand expert Harish Bijoor said, “Siddharath’s passion for the brand was unquestionable. Further, consumer brand franchise is the big thing that he has built. This will go nowhere, provided the company can find its feet quick with its day-to-day operations. I think it will.”

Bigger challenges

CCD, the brand that introduced the cafe chain culture in India, is the largest player in this space with over 1700 outlets. However, competition in the coffee shop space has intensified over the past few years. As per a report by the National Restaurant Association of India, the organised cafe segment in India is pegged at ₹9,370 crore in 2018-19.

N Chandramouli, CEO, TRA Research, said: “The brand equity will sustain as there is an empathy factor attached with it. However, the cafe business is tough and competition has been intensifying in this space from international and home-grown brands in the past few years.” He added, “Given the current macro-economic conditions, the brand will need to deftly handle these challenges.”

Speculations were rife about a possible stake sale by the company to beverage major Coca-Cola in June. A letter, purportedly written by the late founder before he went missing on Monday, mentions talks of partnerships with companies like Coca-Cola and ITC.

Nalin Khanna, Group MD and CEO at business and brands solutions company, Vertebrand, said that while the company’s brand equity may remain strong in the short term, it needs a white knight to pump in the necessary investments and sort out the financial issues, so that the brand equity does not get eroded in the long term.

Published on July 31, 2019
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