Costa Coffee is a British multinational coffee company which entered India in 2005 to become a part of coffee revolution in the country. Talking to Restaurant India, Virag Joshi tells how the coffee retailing has changed the F&B scenario in India with major international and national players entering into the segment.
How is coffee business changing the Indian F&B scenario?
Indian coffee market which is growing at 17 percent annually is outpacing the overall QSR segment. Customers are today flocking to coffee shops since the concept of coffee and snacks between meals is growing in India. Leading QSR chains are now making coffee an integral part of their offerings. Chains like McDonalds and KFC that focused only on their flagship offerings like pizzas and burgers are diversifying into the cafe concept to attract customers throughout the day.
What is your view on the growing culture of cafes in India?
The Indian middle class are ready to spend more to be a part of global lifestyle and culture today. Coffee shops have become the preferred hang-out zone for the youth and first choice for business as well as personal purpose. While India still remains a predominantly tea drinking nation, coffee has made major inroads. As per market estimates, the consumption of coffee has more than doubled over the last decade. It is increasing to 2.5 to 3 percent a year.
Today major local and international players are available in the market. Who do you see as your competitor?
All coffee shops that serve high quality hand crafted coffee and beverages accompanied by a great food menu in a classy ambience is competition for us at Costa. Having said that, India has space for multiple high quality café brands and consumers must have choices.
What is the major problem that you face in coffee retailing?
There are three major obstacles confronting us today which we believe are common for the whole of Indian coffee retailing. Real estate in India especially in metros and Tier 1 cities has become a big challenge, hiring and retention of competent manpower and relatively slow pace of growth in the sector compared to other segments.
What marketing strategy you apply at Costa? How is it different from others in the market?
We use a combination of traditional and social media along with smart in-store promotions to communicate with our target audience.
Over last eight years, Costa has consistently delivered a great coffee experience to its growing customer base. Our mission is to save the world from mediocre coffee by making and serving perfect, handcrafted drinks in our global network of Costa Coffee stores.
Coffee consumption in India is increasing 2.5-3 percent annually. What are the driving factors for the same?
Increasing disposable income and higher tendency to spend, larger number of working women and international lifestyle aspiration are the major reason that is driving the coffee culture in India.
What sort of investment have you made considering the fact that coffee industry is in expansion mode?
We are investing in opening outlets where our core customers want us- from high streets to malls, corporate IT parks to airports etc. We are also investing extensively in training so that the Costa experience is always of the highest order for our customers. We are also investing in hearing what our customers and potential customers have to say- we conduct two large scale consumer research for feedback every year for detailed feedback on brand Costa.
How many outlets do you have presently and what is your expansion plan for the coming years?
We have 100 plus outlets operational in India. However, we are planning to add more outlets in existing areas of presence as well as evaluating new geographies in 2015.