For the most popular hangout joint amongst youth, the Café Coffee Day (CCD), is on the mission to offer a world-class coffee experience. CCD has redefined the experience of having a meeting in an economical & professional way While ambience and the experience make the difference. The Investment & financial analyst, Mr. V. G. Siddhartha was not wrong in his calculation to generate a cash profit of 10% to 12% of his chain.
Coffee Day Enterprises Ltd, which runs the country’s biggest coffee chain Café Coffee Day (CCD), launched its first café in Bangalore in 1996. As of March 2015, there are 1530 outlets across 29 states in India. The vertical integration of owning the plantations, growing coffee, making the coffee machine and making the furniture for the outlet must have accelerated its growth besides other factors. The control over raw material & the process (roasting & powdering) gives the unmatched quality at minimum cost. Besides the strong Research & Development Unit contributes to the innovation.
The national highway between Bangalore and Mysore is just 140 kilometers. You will locate 7 CCDs on the route that enables as a rest stop & for the travel break. CCD is targeting this space on intercity highways for expansion. It is just brilliant to expand the presence in this space, especially when more smart cities are expected in India. But the CCD’s lounge targeting families for freshly cooked food may be a deviation from the core competency and could be another calculated bet for growth.
CCD is planning to raise about Rs.1,200 crore through an Initial Public offering to expand its retail network and reduce debt. The company also plans to open over 215 Cafe Coffee Day outlets and 105 kiosks in the next two financial years. The demographic dividend of India as the 50% of India’s current population is below 25(0 to 25) years is a strong positive factor for CCDs.
The great idea of converting the beans to a happening experience with persistence deserves a big thumbs up. As experts say companies that have a multifaceted set of capabilities are really hard to replicate. CCD is one such company. But do they have the ability and the agility to face the competitions, as now various disruptive business models change how business is done at a disruptive speed ?.