- July 4, 2018 / 4 min readIn export CCL plans to corner a bigger pie in the freeze dried coffee by setting up a fourth plant exclusively catering to it at Chittoor in Andhra Pradesh at an investment of Rs 300 crore
The Hyderabad-based instant coffee major CCL Products (India) Ltd plans to introduce sachets that are set to redefine coffee consumption in the country and meet the challenge of its competing beverage tea head-on.
CCL MD Challa Shrishant said that the company would soon launch 3-in-one sachets in the retail market that will contain instant coffee, spray dried milk powder and sugar, and the customer would have to just add water to drink it.
“Coffee cannot compete with tea in several regions of the country as it is not as affordable,’’ he said. The move is aimed at capturing the market in North India, where tea is the main beverage. Almost 80% of the coffee consumption in the country is concentrated in the four states of Tamil Nadu, Karnataka, Andhra Pradesh and Telangana.
The product, to be launched under CCL domestic brand Continental, will be the first such locally produced one in the retail market. Consumption of coffee is growing at 15 to 20% in India compared with single-digit growth overseas, but it is yet to penetrate into smaller towns, he said.
The company hasn’t decided on the price but the product is likely to be available at a basic rate of Rs 10 a sachet with different flavours such as cappuccino, vanilla, hazelnut, etc., costing more. The customers will also have the option of sugar-free and non-dairy cream variants for those who are lactose intolerant.
CCL, which offers over 1000 blends, achieved 16% rise in its a consolidated turnover year-on-year at Rs 1,142.84 crore in 2017-18 with instant coffee exports, where it holds the top position with around 50% share, accounting for a majority of the earnings. “We achieved Rs 46 crore sales in domestic market and hope to double it in the current year,’’ Shrishant said.
In export, CCL plans to corner a bigger pie in the freeze-dried coffee by setting up a fourth plant exclusively catering to it at Chittoor in Andhra Pradesh at an investment of Rs 300 crore. “Freeze dried coffee is a premium niche market and is globally growing at a fast clip,’’ Shrishant said. CCL currently has one plant in Andhra Pradesh and two abroad in Vietnam and Switzerland.
In the current year, CCL is expecting about 10 to 20% increase in export volumes. But a downswing in coffee prices and depreciation of the Brazilian currency could impact export earnings, he said.
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