Coffee Day Fresh ‘n Ground, the Rs. 30 crore division of the Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), has its expansion plans in full swing. Apart from exploring the franchisee model, the division, which offers freshly ground filter coffee in various blends, is conducting a market test by placing its products on retail shelves. All this is in tune with its plans to double its revenues by 2006.
CJ Jayanth, Sr. GM, Fresh ‘n Ground says, “Apart from a significant export market share, we had a full-fledged coffee procurement network and we also own around 5,000 acres of coffee plantations. Due to this, in 1995 we felt that it was the right time for us to enter the domestic market.” Since then, ABCTCL has gone on to establish a nationwide café chain through its Café Coffee Day outlets, besides consolidating the market through Coffee Day Xpress kiosks and vending machines.
The Fresh ‘n Ground division operates out of exclusive stores that offer a number of filter coffee blends. Currently restricted to the South, the division has a number of outlets across Karnataka, Andra Pradesh, Kerala and Tamil Nadu. What started as a 20 outlet each in Bangalore and Chennai has now grown into a 340-outlet unit. Says Jayanth, “Along the way, we explored the franchisee route and today 50% of our outlets are company owned and the remaining 50% are franchisees.”
Along with the franchising, the company also plans to place its product on retail shelves. Two blends under the name of Fresh ‘n Ground are currently being market-tested in Bangalore. “Our concept is all about freshness and it is our commitment to our customers that we will replace any stock that is more than a week old,” says Jayanth. The division is working on a distribution pattern where stocks can be refreshed on a weekly basis. It uses its 75 outlets in Bangalore to produce fresh coffee on a daily basis and monitors demand precisely. According to Jayanth, this model will be extended to Andhra Pradesh and Tamil Nadu in a few months.
Besides fine-tuning its distribution model, the division is also getting its marketing strategy together. While a mass media campaign has been used from time to time, the division’s focus lies on direct interaction and below the line activities. In its early days, Fresh ‘n Ground launched a door-to-door campaign reaching 1.5 lakh homes across Bangalore and Chennai. According to Jayanth, this helped form an emotional bond with the customer. Apart from direct campaigns, the company has also engaged in various below the line activities, including a loyalty program. Under this scheme, members are given an accident insurance worth Rs. 1 lakh. Along with this, the points earned with each purchase can then be exchanged for a variety of goodies. “This loyalty program is a one of its kind initiative. Our brand is all about connecting with people emotionally and offers like this make it possible,” says Jayanth.
While Café Coffee Day outlets are growing to be a common sight in the North, the Fresh ‘n Ground section will take a while to get there. The division is relying on the brand promotion made by the company’s cafes and kiosks to pave the way for a filter coffee trend to make its way North. “Even when we do go North, we will be targeting customers who are familiar with the South Indian concept of coffee,” says Jayanth. The division, which is working on a rapid expansion model has at present around 340 exclusive outlets around the South and is hoping for revenues around Rs. 60 crore by 2006-2007.