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Coffee Day Xpress on major expansion drive

Coffee Day Xpress on major expansion drive

Author | Jasmeen Dugal | Thursday, Feb 26,2004 8:15 AM

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Coffee Day Xpress on major expansion drive

Bangalore-based Coffee Day Xpress plans to set up 1,000 food and beverage kiosks by 2008, which addresses the need to provide "fast, hygienic and affordable food" without investing in a large café. "The operational success in the IT capital has induced us to draw an aggressive nationwide expansion plan," said Sandip Mukherjee, President, Coffee Day Xpress.

The company has already set up 100 kiosks, a majority of them in South India, and plans to reach the 250 mark by March 2005. "We are targeting mainly IT corporates and retail petrol pumps for setting up our kiosks," added Mukherjee. Shopping malls, educational institutions and hospitals are not ruled out.

One tends to associate coffee kiosks and cafés with hip youngsters. So why isn't Coffee Day Xpress targeting educational institutes? "It is a seasonal business, since there are so many long holidays. Moreover, Coke and Pepsi have already tied up with most of the institutes and are offering a huge amount of money and supplies as part of their tie-up, something we cannot hope to match. However, we have tied up with IIT Delhi, Amity Business School and Lady Shriram College," Mukherjee told exchange4media.com.

The coffee conglomerate views the Delhi Metro as a prime opportunity. "There are, on an average, 55,000 daily commuters between Shahdara and Trinagar, so it is a hugely profitable business opportunity for any company. However, it might take time as there is a lot of paperwork and legalities involved in setting up kiosks in the Delhi Metro," said Mukherjee. "We are present at the Mumbai airport, and the Kolkata International airport has approached us," he continued.

Which segment offers lucrative business opportunity? "We have huge growth potential in the corporate segment, which is driven by the Café Coffee Day brand value, easily installable kiosk models and ready availability of fresh food and snacks," said Mukherjee. There are around 40 outlets in the corporate segment and the expansion of each company could mean an expansion opportunity for Xpress too. "Today we are present in the office premises of Ericsson, Airtel, IBM, HCL BPO, Hughes and in the petrol pumps run by oil majors HPCL, BPCL and IOC," added Mukherjee.

Of all the kiosks that the company plans to set up, 90% would be operated by franchisees. "The company's franchise model offers attractive business opportunities for housewives, small and medium traders and even for retired employees who have opted for VRS, as the initial refundable investments would be as low as Rs 2.5-3 lakh.

Moreover, with no working capital required, and with an average daily turnover of Rs 1,200, a franchisee is guaranteed of profits right from the first month," said Mukherjee.

Which region does the company view as the most lucrative? "The southern region, which would see major expansion, followed by the north. We have also received a very encouraging response from Delhi; our research has indicated that the average Delhiite has the desire to conveniently pick up hygienic and affordable food on the move," replied Mukherjee. "We are looking forward to increasing our presence here and are in the process of evaluating appropriate locations and franchise partners."

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