Sterling Group's Fresh and Honest Cafe Ltd has entered the packaged filter coffee segment with the launch of 'Alive'. The company is targeting a 10 per cent share of the organised segment and is bullish on estimates that the organised segment's share would go up to 70 per cent in 2010, from the present 47 per cent.
Disclosing the shares of different regions in the segment, R Shivashankar, CEO, Fresh and Honest Café, said, "Currently, the South dominates the market with a 90.2 per cent share, but the rest of India is also growing rapidly, thanks to the parlour culture. We are starting off with the South now, and in the next six months, we should be present nationally. The clear opportunity, as we see it, is that the market is still dominated by unorganised players."
The market size is estimated to be in the region of Rs 300 crore per annum, and growing at 5.5 per cent y-o-y. The market leader in the organised segment is Bru Green Label, with a lion's share of 68 per cent. Alive was priced at a premium of close to 10 per cent over the market leader, Shivashankar said.
The brand has been rolled into the Tamil Nadu market in February end, and will be introduced in other South markets by April 1. Thereafter, the brand will be launched in the West, followed by North India. Over the next two months, the brand launch will be supported by a communication campaign with a budget of Rs 2 crore. This will be spread across television, radio, print and extensive sampling exercises. The campaign is slated to begin from March 16. While is Rediffusion DYR is the creative agency, TME handles the media duties.
"Even as we speak, the advertising is being checked out. The communication will be different, and highlight that our product is superior. We will finalise on it in the next week or so," Shivashankar added.
41,800 retail outlets will offer the brand in the four states of Karnataka, Kerala, Andhra Pradesh and Tamil Nadu in the next two months. The packaging, taste, and aroma had been conceived after gathering consumer insights from the vending network of the company, he further said.
The product would be sampled through 'leading publications', and the existing vending network, Shivashankar said. The group vends over six million cups of hot coffee each month, and claims a market share of 80 per cent in the business. The challenge will be to take forward that leadership to a new segment, through Alive.