Tata Coffee and Starbucks

7/23/2019 Tata Coffee and Starbucks

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COMPETITOR ANALYSIS

Market Share of Major Coffee Retail Chains in India

The Indian coffee market is passing through an evolutionary phase where consumers’ preference

towards out of home consumption is developing. The exceptional growth of out of home consumption of

coffee in the coffee chains has been triggered by the young adults. The young adults segment of the

population spends major time outside home or at work, which has influenced the growth of the coffee

chains in India.

The retail coffee market in India is majorly dominated by Cafe Coffee ay with !,!"# chains

across India followed by $arista with %"& coffee serving chains and Cost Coffee with '# chains. It is

being observed that almost ()* of the coffee retail market has been held by these three players and

the rest #* being held by other small and new players. +verwhelmed by the response in India, coffee

retail giants are expected to expand their network in India in the near future.

Café Coffee Day

Caf Coffee ay which is known as CC was the largest coffee chain in India. Their mission statement

was -To be the best caf chain in the country by offering a world class coffee experience at affordable

prices.

CC was also the first coffee bar in India which was established in !(() in $angalore $y

largest exporter of coffee in India, the /malgamated $ean Coffee Trading Company 0/$CTC12. In

%&!&, they dominate the market with a share of '3.3* with total retail outlets of !&"# in over !&& cities.

The company offers numerous options in the product offerings such as Cappuccino, 4spresso,

Caf 1atte, Cafe 5ocha, Irish coffee and Ice tea along with wide variety of eatables such as sandwich,

cakes, burger and others. The products are offered to be consumed in the cafe as well as in take away

format. The company also offers various merchandise products such as coffee mugs, gift vouchers and

others.

+ther brands are also promoted in a CC outlet through innovative and interactive use of

posters, cards, danglers, leaflets, contest forms, etc. CC has tied up with popular television serials

and also ran promotion contests for many brands. It had also tied up with some popular Indian movies

where CC was featured in some of the scenes. CC has six caf formats6 5usic Cafs, $ook Cafs,

7ighway Cafs, 1ounge Cafs, 8arden Cafs 9 Cyber Cafs. 5usic Cafs provided customers with the



choice of playing their favourite music tracks on the digital audio jukeboxes installed in the caf. CC

has been also coming out with more formats like sports Caf, singles caf, and fashion caf.

arista

:ounded in %&&&, the company is a pioneer of Indian Cafe culture. The company has positioned the

brand as a joint where people can indulge in conversations with a cup of coffee. The target segments

for the company are the youth and young adults, who are aware about the global lifestyles and enjoy

new flavours and taste of coffee. $arista is planning to expand its latest chain of cafes -$arista Cr;me

1ava<<a to more parts of the country.

/long with offering coffee, the company also offers fresh salads, sandwiches, pi<<as, pastas

and desserts. The company offers in stores promotions from time to time along with other promotions in

commercials and films. $arista has a pan India presence with more than %"& retail outlets. #3 of the top

outlets offer =i>:i availability along with '3 outlets offering $lu>:i for mobile savvy generation.

Coffee and other products at $arista were priced high and its target audiences were youth from

the upper>middle>class segment. The coffee at $arista was made with high>?uality /rabica coffee

beans and baristas 0brew masters2 were invited from Italy to make new blends. $rotin $anerjee, @ice

Aresident of 5arketing, $arista, said, -+ur inspiration was the traditional Italian 4spresso bars where

the idea is to create a Bhome away from home. In %&&!, $arista entered into a strategic alliance with

Tata Coffee 1td. 0Tata2, the largest coffee producer in India. Tata later ac?uired a "3* stake in $arista.

The alliance allowed $arista to enlarge its distribution network and set up outlets in the Taj 8roup of

hotels owned by Tata and its other allied businesses.

In %&&#, /mit Dudge, its promoter, sold )3.#* stake of the company to an EFI businessman,

Givasankaran 0Giva2, who later in %&&# bought the remaining stakes from Tata as well. /fter the

ac?uisition, Giva revamped the chain, opened more $arista outlets in Gouthern cities, and began

franchising its outlets. It started opening up a new outlet every !& days. / new %) look was given to its

outlets by making changes in its seating arrangements, in>store merchandise, and providing a better

youthful ambience of the store. The brew masters maintained friendly relations with the customers and

called them by their first names.

$arista joined with specialty retailers such as the music retailer Alanet 5, the book retailer

Crossword, and the Taj 8roup of hotels for setting up espresso corners in their premises. It also

launched a concept called $anCafe, a coffee shop within the bank premises and joined with the bank/$E /5F+.



Costa Coffee

Costa Coffee was incorporated in India in %&&3 with a tie up with evyani International 1imited, head

?uartered in Eew elhi, the Company serves the coffee lovers across India. Company inaugurated its

launch with # cafes in $angalore. The company commands a share of #.(* in the Indian coffee market

in %&!&.

The Company offers different variety of coffee such as 4spresso, cappuccino, cafe latte and

others. Gome of the premium offerings which the company offers are muffins, cakes, desserts,

sandwiches, wraps and pastas. The company operates with nearly '# stores across India. The

Company is planning to focus on the prominent cities such as Aune, elhi, 5umbai and $angalore. The

company is planning to predominantly expand in the metros.

!"iky#s

Two software engineers, Ghashi Chimala and Ghyam, opened the first Hwiky’s outlet in Chennai in

!(((. They were inspired by the specialty coffee bars in the nited Gtates. The menu at Hwiky’s

included varieties in hot Italian coffee, Indian coffee, specialty hot coffee, cold coffee, frappes, milk

shakes, tea, other beverages, desserts, and snacks. It targeted youths in the age group of !J to "&

years. $y %&&%, the annual revenues of Hwiky’s were #" million IEF.

Hwiky’s had three types of formats6 Hwiky’s Coffee Aubs were stand>alone coffee bars,

Hwiky’s Coffee Islands were outlets within big stores, multiplexes, and movie theatres, and Hwiky’s

Coffee Kpress were coffee kiosks. $y %&&) it had over %& outlets in nine cities in India and one

franchise in Gri 1anka. Hwiky’s had plans to open more outlets in metropolitan and large cities in India

and abroad through franchising its business. It had joined with retailers such as 1ifestyle, 5usic =orld,

and 4bony to open store>in>store outlets.



CONCL$SION

Gtarbucks is another industry stalwart to enter the Indian markets due to vast potential and the huge

untapped market. Indian market is always influenced by the traditions followed in the =estern

counterparts hence the success of 5c onald’s, L:C, etc to name a few. =ith access to 7ollywood

movies where these brands are flashed ?uite often, the aura surrounding brands such as Gtarbucks

scale new heights. Indian consumers have always welcomed change when it comes to their taste buds.

Cappuccinos, 1atte have eclipsed the traditional 4spresso filter coffee. :ilter coffee seems like

an archaic notion, only restricted to the elderly people. In fact the coffee shops have itself undergone a

tremendous transformation, with them replacing a hang>out joint for the teenagers.

The timing of their entry could not have been better. =ith $arista, Caf Coffee ay and Costa

coffee almost losing their sheen, Gtarbucks comes in like a breath of fresh air. The future outlook of any

company is not complete without an analysis of the industry in which it operates. The coffee industry of

India is the sixth largest producer of coffee in the world, accounting for over four percent of world coffee

production, with the bulk of all production taking place in its Gouthern states. India is most noted for its

5onsooned 5alabar variety. It is believed that coffee has been cultivated in India longer than anywhere

outside of the /rabian Aeninsula.

Tata Gtarbucks 1imited, the 3&M3& joint venture between Gtarbucks Coffee Company and Tata

8lobal $everages 1imited is bringing an unparalleled experience to Indian customers. $oth companies

have a history of delivering product innovation and the highest ?uality experience to customers around

the globe. They are delighted to come together today and transform the coffee experience for

consumers across India, while providing a %J community gathering place to connect with family and

friends. Thus, Coffee culture is poised to be deeply in>grained into Indian culture in the near future, if

this strategic alliance succeeds.

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Tata Coffee and Starbucks