Coffee – Other brands

In Line with its plans to have a pan India presence, Devyani International Ltd, the master franchisee in India for Britain’s coffee chain Costa Coffee, plans to invest close to Rs 25 crore to set up 50 outlets across the country in 2008, besides foraying in the office space.

We are taking Costa Coffee to key cities in North India. We will soon launch in Agra, Meerut , Amritsar and Chandigarh among others and our first outlet in Mumbai would come up by June, Devyani International CEO and President Virag Joshi said.

The company recently opened outlets in Jaipur, Lucknow and Ludhiana. On the anvil are plans to launch Costa Coffee in Kolkata. Mumbai and Bangalore the company said in a release.

The coffee chain already has over 20 outlets in Delhi and the NCR. Besides opening new stores, Costa is also introducing the concept of Cart and Kiosk. While the kiosk model would be a full fledged structure that would serve the entire menu of Costa food and beverages on the lines of a Costa store, the Cart model would be a smaller version and would consist of a counter that would serve only coffee.

In early 2008, US based coffee retail giant Gloria Jeans Coffees, joined hands with hospitality major Citymax India to launch a chain of coffee house across India. Citymax India, which is a part of the Dubai based global retail giant, the Landmark group would invest around Rs 40 crore to roll out 90 outlets throughout India in the next four years.

The company plans to promote the Gloria Jeans Coffees brand in India through franchising Gloria Jeans Coffees will offer a five star coffee shop experience but at affordable rates. It will target executives and professionals in the 25-45 year age group. The unique selling proposition (USP) of the brand would be the use of top quality beans and enhanced service standards. Gloria Jeans coffees currently run around 770 outlets in over 30 countries including 435 in Australia.

The global cafe cum entertainment giant – the $426 million Hard Rock International has announced its plans to enter in India. Industry sources said Hard Rock International has signed an exclusive arrangement with two Indian Franchisee partners – Jai Singh and Sanjay Mehtani. The first Hard Rock café is expected to come up in Mumbai, in September. Hard Rock International Inc, now operating in over 40 countries is the wholly owned subsidiary of London based. The Rank Group Plc. Hard Rock’s revenues grew 11.5% in 2004, to $426 million. British leisure group Whitbread Plc plans to open more than 300 outlets of its Costa coffee chain in India.

Branded coffee retailing in India is at the stage of growth. Coffee has gradually moved to a social drink. The success of coffee retailing is an example of a change in customer lifestyles. The increase in competition will see issues like customers loyalty, with pricing and quality of products taking prominence. The Indian market is also very price sensitive. Given these circumstances –

1) What are the factors which have accounted for the extraordinary success of Starbucks?
2) What was the value proposition that Starbucks offers to its customers / that it has created for the customers?
3) Can the mix of product (which is not cheap) place and experience work in India?
4) Build a road map which the company would adopt for launching into India and a road map for post launch.
5) Evaluate the coffee industry in India and Starbucks s an organization by applying Porter’s Five Forces Model.
6) Identify new growth opportunities that can be tapped by the company in mature and developing markets.