Date post: | 08-Aug-2015 |
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Does ‘StarBucks’ have the Right Blend for
India
Café Coffee Day is the market
leader in terms of retail footprint
Retail Footprint of Coffee Chains(No of Stores as of Sep 2012)
The Café market is estimated to clock a CAGR of about 13-14% over next five
years
2007 2013 2018
Entry of StarBucks in India
Starbucks is the world’s largest coffeehouse chain with over 19000 outlets in 62 countries
Tata Starbucks is a two-year-old joint venture between the $1.21 Billion Tata Global beverages &
the $14.9 Billion Starbucks Coffee Company
Starbucks first planned an India foray as far back as 2007,in
partnership with Future Group,which was set aside as the
Global Economy SlowdownStarbucks entered India 15 years after it entered China
US Canada
China Japan UK South Korea
Mexico Taiwan Puerto Rico
Philip-pines
Others
No of Stores
11457 1337 1017 1000 764 559 403 297 226 216 2491
1000
3000
5000
7000
9000
11000
Starbucks presence across various Countries/Contribution of countries to
Starbucks(Revenue) The China & Asia Pacific region brought in 6% of the company’s revenue
in the year 2013,compared with 74% from the America’s Whereas the America’s grew at 11% & Europe ,Middle East & Africa
registered just 2% improvement,China & Asia Pacific clocked 27% growth in 2013 compared with 2012
Brand Formats of Café Coffee
Day
1)Regular Café Stores(1495)
2)The Premium Lounge Stores(51)
3)CCD Square Stores(4)
4)CCD Express(600 Take away Kiosks)
5)Vending machines(16000 Nos in
Corporate Offices)
Expansion at CCD has been driven in a grid of verticals &
formatsVerticals Include;
-Transport Hubs-Shop-in-Shops
-Hospitals-jective Highways
-Colleges-Corporate Campuses
The main objective of CCD has to combine verticals & formats to tailor-make an outlet that suites the customer cluster that exist in
any location
Operation
-Starbucks will have only one format of stores & one price
across India
-Any finetuning will be only in terms of size
Price
-Starbucks in India is priced nearly on par with the US & China,and it is priced around
1.5 times CCD
-It is also more expensive than CCD Lounge
-Starbucks has priced its coffee at the median,higher than CCD & CCD Lounge but less than Costa Coffee & The Coffee
Bean & Tea Leaf(CBTL)
How is Starbucks different from Café Coffee Day(CCD)
Supply Chain Management• Starbucks has its sourcing arrangements with Tata Coffee(A
subsidiary of Tata Global Beverages) which allows starbucks to save 100% import duty while maintaining consistent quality
• Tata Coffee set up a plant at Kushalnagar,Coorg in Karnataka,to roast & package gren coffe for all starbucks stores in India.Overtime ,the 375 MT Plant will also supply coffee to select Starbucks markets outside India.
StarBucks
• CCD uses domestic coffee,grown on its own plantations in Chikmagalur,Karnataka.CCD (1900 crore Amalgamated Bean Coffee Trading Company)has 10500 acres of coffee plantations, which produce 7000 tonne of coffee every year.CCD sources its requirement entirely from these plantations.Café Coffee Day(CCD)
The Indian Espresso Roast variety is sourced locally from this plant
CBTL
CBTL sources beans internationally, is a big part of expenses for its 29 stores across seven cities in India
Globally,CBTL purchase specialty-grade Arabica Coffee beans from
small farms & private estates in East Africa,Latin America & the Pacific
Average Ticket
Value(Rs)
Earnings on wekends(Rs)
Earnings on weekdays(Rs)
Earnings per month(Rs)
Expenses(Rs) Profit(Rs)
90-100 40,000 50,000 13,00,000 Food & Beverage-25% of ticket value
Running Cost-Electricity,Water,Rent,Salary
account for little over halfIncidental Expenses
-Tissues,Cups,Wifi account for another 1,00,000
2,00,000
Revenue Per Stores
CCD will just take over 2 years for the store to recover its 50 lakh capex
Average Ticket
Value(Rs)
Earnings on wekends(Rs)
Earnings on weekdays(Rs)
Earnings per month(Rs)
Expenses(Rs) Profit(Rs)
150(Higher than CCD)
70,000 1,00,000 24,00,000 Food & Beverage-25% of ticket value
Running Cost-Electricity,Water,Rent,Salary
account for little over halfIncidental Expenses
-2,00,000
3,00,000
Starbucks capex is more than double that of CCD,so it will take over 3 years -4 months to Break-Even
Food Offerings CCD fine-tunes its menu based on the
location-Idlis at Highway outlets
-CCD Lounge offers shawarma skewers,nachos & khow suey
(About 30% of the revenue for CCD come from food,while beverages account for 60% & merchandise makes up the remainder
- ’Cardamom-flavoured mawa croissant’ has done well-Other menu include tandoori paneer roll,murgh kathi wrap & chatpata paratha wrap
Catering at Starbucks has been handed over to Taj Sats,which has helped develop a menu that keeps in mind local preferences
Barista Lavazza launches 2
menus every year
1)Summer Menu2)Winter Menu
-Catering to local taste buds is something Starbucks has perfected in other countries also
-Ex:In China Starbucks offers Apple-Flavoured coffee that is quite a hit(20% of local palate that Starbucks offers is usually spot on)
Business Advantage
Locations
-Tata’s can be of tremendous help when it
comes to getting great locations
-Tata brings in a unique perspective in terms of real estate acquisitions
capabilities
Retail Presence
-Tata group’s considerable retail presence-Westside,Croma,Landmark,Star Bazaar,Titan,Tanishq offers scope for Shop-in-Shop Starbucks outlets
Integration
The Joint Venture brings in the opportunity to
integrate Starbucks into ‘Taj Hotels', the ability to bring food from the
Taj into Starbucks stores
In the US,Starbucks store sizes vary from 150 sq.ft -1500 sq.ft depending on strategy
Ex:Starbucks has an arrangement to run café’s inside Barnes & Noble book stores. But there’s no guarantee of success
with such arrangements .The smaller outlets may not get the no of customers required to be viable(given Starbucks
higher prices, that seems a definite possibility).Such stores won’t be destinations in themselves in any case
CCD has tie-ups to run Café’s in ‘Essar Oil petrol pumps’ & ‘Shoppers Stop Stores’
Experience shows that the Café is add-on activity, not an objective
in itself-no on drives to the petrol pump for a coffee
(In a shop-in-shop format,the footfalls are created by the principal & CCD
only does a conversion)
What is special in CCD
You can Shop Online
Products
Coffee Makers Coffe Powders Mugs & Cups
Gifts Quick Bites
Gifts
Bags Caps
CCD Shopping
Compact machine, ideal for small spacesThermo block heating system for quick heating Programmable coffee options Capsule auto ejection system Water capacity: 1 L Adjustable & removable drip tray for small and big cup Transparent removable water tankEasy to use and clean
ORION AQUA BLUE - FULLY AUTOMATIC COFFEE BREWER
VEGA WHITE - SEMI AUTOMATIC COFFEE BREWER
Compact machine, ideal for small spacesAdjustable base for small and big cup Simple one button to start/stop coffeeWater capacity: 1 L Thermo block heating system for quick heating Easy-to-clean design ensures optimum convenience12 Months warranty on manufacturing defects
Aromatic coffee percolates instantly with this snazzy Italian style stainless steel espresso maker. It's easy to use and the
perfect gift for your friends, family, or even yourself
Compact machine, ideal for small spacesThermo block heating system for quick heating Programmable coffee options Capsule auto ejection system Water capacity: 1 L Adjustable & removable drip tray for small and big cup Transparent removable water tank Easy to use and clean
ORION GOLD - FULLY AUTOMATIC COFFEE BREWER
SS STOVETOP ESPRESSO MAKER - NEW
Mugs & Cups
PERSONALIZED MUG - HANGING
HEARTS
COOL MUG - AZHAGU RAJA
FLYING HEARTS LOVERS MUG
ECO-MUG GREEN
Coffee Powders
ESTATE BLEND CAPSULES (2
PACK)
GUATEMALA ANTIGUA
FESTIVE BLEND COFFEE
PURE ARABICA CAPSULES (2 PACK)
GiftsA special person requires a special
gift. Now, Café Coffee Day lets you be the reason for the smile on someone's face! Be it Friendship Day, Mother's Day, Valentine's
Day, Women's Day or your birthday, share the simple joys of
Coffee with the ones you love with our pre-paid Café Moments Gift
Card!.
Café Moments
THE CONNOISSEUR
Quick Bites
DOUBLE CHOCO CHIP (PACK OF 2)
BIRTHDAY CELEBRATION CHOCOLATE - 3
CAFE LATTE COOKIES (PACK OF
2)
JOIE CHOCO CHIP BAR (PACK OF 2)
Bags
DHOOM-3 ONE SIDE BACK PACK
DHOOM-3 SLING BAG NITRO
DHOOM-3 BACK PACK SPEED MEISTER
Caps
DHOOM-3 SPEED HUSTLER BLACK CAP
DHOOM-3 AK HAT BLACK REPLICA STYLE-2
DHOOM-3 AK HAT BLACK REPLICA STYLE-1
Coffee Vending machine for Office & Commercial use
Celesta Coffee Vending Machine
The simple and user-friendly controls allow you to enjoy gourmet coffee drinks like cappuccino, latte
and espresso!
Starbucks Special Initiatives
• This project is a collaboration between Starbucks Foundation, Tazo® Tea, Mercy Corps, Indian tea companies and origin communities in India and Guatemala
• Starbucks In India, Starbucks has contributed to tea growing communities for many years. Since 2003, Starbucks has collaborated with Mercy Corps on the CHAI Project in Darjeeling and Assam to help improve the quality of life for 190 tea and botanical communities in a sustainable way. To date, Starbucks and our tea suppliers have contributed US$2.6 million to these efforts, and have directly impacted more than 12,000 villagers with health services and economic development assistance.
CHAI Project
(Community,Health,Ad
vancement Initiative)
• Starbucks and Tata share common values of responsible business ethics and a commitment to community.
• Tata Coffee Limited has been working to improve the lives of coffee growing communities in the State of Karnataka. Through an initial financial commitment, Starbucks will work with Tata to support the expansion of 'Swastha,' a school for children with special needs (in partnership with the Coorg Foundation) and aim to increase its capacity and outreach into the rural communities in the coffee growing region of Karnataka.
SWASTHA
CHAI has helped the community people to;Improve access to water and sanitationHelp young people succeed in school and become leaders in their communitiesLearn the skills to get a job or start a business
More than 60% of Indian tea comes from Northeast India and Darjeeling where approximately 3 million people work on tea estates. Most are daily wage laborers. Each household is generally
allotted permanent worker status for one – sometimes two – family members CHAI is the only organization working with tea estates in Northern Indian, which are normally autonomous entities with little or no government or NGO presence. Starbucks and Tazo’s strong
relationships with local tea growers have helped the project gain access to tea estates, demonstrating a long-term commitment to the communities we are working with, building the
estate managers’ trust, and proving results to all of our stakeholders. In Assam, over 30% of Assam’s population of 30 million lives under the poverty level. The high drop-out rates in local schools and a low skills base have pushed more and more youth to
join insurgent groups due to lack of positive alternatives.
CHAI Benefits to local community;
-Living quarters-Rations of wheat,
-Rice, -Firewood
- Toilet Facilities- drinking water facilities
Results of the Project;( More than 75,000 people and their families have been
directly impacted by CHAI) Water, Sanitation and Health
In Darjeeling, annual incidents of waterborne diseases dropped by 50% in CHAI project communities. Significant
accomplishments include 1,250 latrines constructed and 26 clean water infrastructure projects completed. 2,000 children
reached with hygiene education in schools Youth Empowerment
-In Assam, 54 youth groups formed with 6,000 youth engaged in projects. The high school dropout rate in Assam is 60%.
However, 91% of participants in CHAI Education Retention program continue to higher education. The program also
awarded 297 scholarships Economic Opportunity
-Key results include 65% of youth in the CHAI vocational training program found employment. 2,100 women participated in savings groups, and program supported 1,500 micro-entrepreneurs.
CHAI Project
Background
Aims & Objectives of SWASTHA
Training & Activities
Kodagu a small district of Karnataka having a population of
about 5.33 Lakhs has 3866 persons with different kinds of special
needs (disabilities), which is very high compared to other districts. In Kodagu, Somwarpet Taluk has the
highest number of persons with Special needs, out of the 3 taluks.
To cater to the needs of the above differently abled children, The Coorg Foundation decided to start a Centre. M/S.TATA Coffee Ltd., has kindly agreed to spare their premises at Madapur Road, Suntikoppa.
Swastha, Centre for Special Education and Rehabilitation, was started on 23rd August 2003 with the intention of educating, training and rehabilitating those children kept away from the mainstream of
society because of mental and physical impairment which make them differently abled The aim is to develop their hidden talents and through special education give
them a purpose towards a better life. With these ambitions in mind, Swastha came into existence.
The second unit was inaugurated on 27th February 2007, at Pollibetta. The Swastha's Rehabilitation Unit aims to minimize the impact of disability by
improving the quality of life of the disabled individuals and thus achieve the goal of socio-economic independence with dignity and self-confidence.
Special EducationRehabilitation CentreFacilities: The centre is offering the following acilities to the students like Free boarding and lodging,Free uniforms ,Free education and training., Free transportation facility to the day scholars, Free medical
checkups and free medicines to the boarders, Free counseling to the students and parents by the experts.Other activities:The students are given opportunity to learn :- a) Yoga, b) Dance, c) painting d) poultry e) apiary and f) gardening. The children are also given opportunity to participate in debates, drawing and painting competitions and sports.To involve the children in various cultural activities, we conduct Annual Day , Celebration, World Disabled Day, Independence Day, Republic Day and Gandhi Jayanthi Celebrations.
SWASTHA
Anup George RebelloAsst.Manager
The Catholic Syrian Bank Ltd