Wake up and smell the Starbucks

Sep 30 2013, 11:52 IST
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SummaryBangalore’s homegrown Café Coffee Day now faces real competition

India. It is choosing its locations with care and Indianising its menu to just the right degree. Starbucks’s first store in India is in the historic Elphinstone Building at Horniman Circle in Mumbai. The chain quickly followed it up with several more stores in the city, including one located in the annexe of the celebrated Taj at Gateway of India. When the first Starbucks opened in Mumbai, the snaking lines indicated that its 90-rupees-or-more coffee was a must-try for Mumbaikars.

Café Coffee Day’s most premium store is the Café Coffee Day “Square” located in the ground floor of its own coffee bean-shaped headquarters, round the corner from the hip UB City Mall and next door to the newly-opened Marriott Hotel. There, tea is conspicuously absent from the menu. Café Coffee Day has several hundred stores dotting its base city, including stores within a kilometre of each other in the premium Lavelle Road, M.G. Road and Residency Road locations. It even has a café next to the M.G. Road metro station.

Both chains have their coffee bean sources sewn up, too. Starbucks sources mostly from the Tata plantations, while Siddhartha owns thousands of acres of coffee estates in southern India.

Starbucks’ range of coffees, which includes the espresso, americano and macchiato, priced at over Rs 100 per cup, and its Indianised menu, including its elaichi mawa croissant and its murg tikka panini, are affordable only for the top 10 per cent of India. In India, Starbucks is café snobbery at its peak. On the other hand, Café Coffee Day’s more modestly priced coffees and menu items like its egg wrap and blueberry frappe are within the reach of the top 30 per cent Indians. Where Starbucks beats Café Coffee Day is in its premium positioning, its coffee quality and its service standards. The last is definitely a challenge for Café Coffee Day, which is growing at breakneck speed.

The two chains’ customer bases may not overlap too much, but that has not stopped the café wars from hotting up. Nothing describes their combat more aptly than Café Coffee Day’s tagline: A lot can happen over coffee.


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