Home >Companies >News >Café Coffee Day increasing automation, reducing vendors

Bangalore: Café Coffee Day is increasing automation in coffee brewing across its 1,500 cafes and has consolidated the number of its food vendors as it looks to improve the quality of its fare and control costs.

“While we obviously had our quality control measures, there was a degree of difference in quality. We had hundreds of food vendors earlier, now they’re down to a fourth of that. We did the consolidation ahead of the launch of our food menu last year," Ramakrishnan K., president, marketing, said in an interview. “It has ensured uniformity in quality to a very large degree and (brought) costs benefits as well," he said.

In the brewing process too, quality depends on standardization to a large degree, Ramakrishnan said.

“There’s still a human being who makes coffee so there is variation. But what we’re trying to do is reduce the variability to a large extent. There are two skill areas involved: the way the coffee is filled into the filter and the latte art (making a pattern in a cup of coffee). The rest, such as the quantum of coffee required, can be automated and that is what we are working at," he said.

India’s largest coffee retailer needs to improve and maintain the quality of its food and beverages while it expands aggressively.

The company has a target of opening as many as 200 cafes per year over the next few years. The company is also facing increasing competition from the likes of Costa Coffee as well as new entrants such as Starbucks.

Café Coffee Day is seen as more of a place to meet for young adults rather than as a coffee specialist such as Starbucks or Lavazza, said Shripad Nadkarni, founder and director, MarketGate Consulting.

“They have to make sure that they are in the ballpark in terms of the quality of the coffee and variety with rivals like Starbucks but they can’t compete with them on coffee because these companies have a strong coffee heritage. The differentiators for Coffee Day are things like their ambience and food. What Coffee Day has done well is that they have got their brand right; basically it’s a meeting place," Nadkarni said.

The retail chain, founded by chairman V.G. Siddhartha, is also increasing non-coffee offerings such as tea, hot chocolate and lemonade, which together generate more than 45% of beverage sales now. More than 60% of Café Coffee Day’s business comes from beverages.

“The purpose is to attract youth who may not be coffee drinkers to come to our cafes. The more we go into non-coffee markets, the contribution of non-coffee drinks increases. Apart from Karnataka, Tamil Nadu and Andhra Pradesh, the rest of India is largely non-coffee drinking. But we still get more than 50% of our beverage sales from coffee and that number will likely remain," Ramakrishnan said.

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