Coffee chain Costa Coffee has just launched its Express service – or coffee on the go – in home base UK. But for the moment, it rules out plans to enter this segment in India.
Instead, the focus here will be to continue adding more stores.
“We plan to launch 60 to 100 stores annually for the next three years,” said Mr Santhosh Unni, Chief Executive Officer.
Although its competitors Café Coffee Day, Coca-Cola’s Georgia, Bru and Nescafe already have a visible presence in the express or institutional business, Mr Unni said it would be premature to talk about entering this space for the next one year – even though it has a presence in American Express and Google offices in India.
“In UK, our parent company has acquired an express business, so over a period of time other international markets such as India will have a ripple effect. But not in the next one year,” said Mr Unni.
Meanwhile, the company has tied up with PVR Cinemas, and will be given the first option of putting up a café in the multiplex. Currently present in four cities, the coffee company plans to enter eight cities by the end of its expansion spree in three years. Kolkata, Hyderabad, Chennai and Punjab are on its radar. Rather than entering more cities, it plans to focus on a particular territory and add more stores there. It will use a combination of various channels, from shop-in-shop, airports, IT parks to multiplexes to achieve this.
Costa Coffee will have its work cut out as the coffee chain space is intensely competitive. CCD has close to 1,400 stores, while Barista has around 140. Gloria Jean has 10 to 12 stores while Coffee Bean and Tea Leaves has a few outlets.
Besides, there are Coffee Board’s subsidised stores that claim to serve fresh filter coffee.
The market for coffee cafes is pegged at Rs 750 crore but together with the express business, can touch Rs 1,000 crore.
There is enough scope for growth and the entry of international chains such as Starbucks is welcome, said Mr Unni. Costa Coffee hopes to become the number two player going forward.
Source : The Hindu Business Line