Home / Companies / News /  A lot happened over coffee to modify India’s tea-drinking culture

NEW DELHI : Before some of the world’s largest coffee chains set up shop in India, homegrown Cafe Coffee Day (CCD) was the de facto coffee server for the country’s youth during the 1990s and early 2000s.

CCD started by V.G. Siddhartha, chairman and managing director of Coffee Day Enterprises who went missing on Monday evening, can be credited with introducing the largely tea-drinking Indian population to the western concept of branded coffee shops. This was especially in a post-liberalized India, when the opening of the economy in 1991 created a wealth of jobs and aspirations among middle-class Indians leading to a surge in popularity of the coffee chain.

“Café Coffee Day, in that sense did what Starbucks did globally," said Santosh Desai, managing director and chief executive of Future Brands Ltd. Desai said that the chain’s expansion collided with a cultural shift in India, which was turning mobile. “On-the-go quasi offices were springing up in the 90s and early 2000s and CCD was right in the middle of it," Desai said.

Starting off as a single café in Bengaluru’s Brigade road in 1996, CCD today is India’s largest coffee chain. As of 31 March, CCD had 1,752 cafes, spread across 243 cities. In 2005, the chain expanded overseas, opening its first international outlet in Vienna.

CCD for most Indians also served as their neighbourhood “hang-out" joint and successfully substituted for the lack of any affordable spaces in the country where Indians could socialize—be it meetings or first-time dates.

“CCD built the café ecosystem in India, and expanded the out-of-home coffee drinking habit beyond just the top metros; this was especially true as they expanded in residential areas, opening up small stores in dense catchments," said Shubhranshu Pani, managing director, retail services, JLL India.

The chain also had the first-mover advantage. CCD stores came up before foreign brands such as Starbucks that opened its first café in India in 2012; Costa Coffee and The Coffee Bean & Tea Leaf.

However, over the last few years, competition in India’s coffee chain market has gained pace. As a result, same-store sales growth at CCD fell from 8.2% in Q4FY18 to 5.4% for the quarter ended 31 March. In the same period, the chain expanded at a modest pace, from 1,722 to 1,752 outlets.

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