CHAPTER 1

INTRODUCTION
BACKGROUND

Evolution of a Coffee Caf

The beginning:
It all began around 1000 A.D. when Arab traders began to cultivate coffee beans in large
plantations. They began to boil the beans creating a drink they called qahwa which
translates to that which prevents sleep. The drink became widely popular, and the need for
coffee beans grew.
Interesting facts about Coffee & Cafs:

Coffee was first known in Europe as Arabian Wine.

Coffee is presently the second most traded commodity in the world. It is second only
to oil.
Nescafe was invented by Nestle because it had to assist the Brazilian government to
solve its coffee surplus problem.

Growth of Caf Industry in India

Hot beverages have always been a part of the tradition of India, especially South India.
Coffee took the first seat in South India when the traditional Brahmin classes brought
down the beverage from the ruling British around the 1930s. During the early years the
drink was confined only to traditional rich Brahmin families who served filter coffee in a
davra- tumbler. Coffee is no more confined to the rich Brahmin class now, though the
tradition of serving filter coffee in the davra- tumbler continues to this day. In order to
spread the drink, coffee houses emerged at various places in the country, which also
served as the opposite places for lawyers and the educated class to hold discussions
ranging from politics to cinema. It is also believed that many scripts and ideas for films
evolved here. One of the oldest coffee houses in South India is the Raayars mess,
Chennai, which serves first class filter coffee even today. The mess was established in the
1940s and continues the tradition of coffee but supplements it with tiffin also.
The vintage location of the mess attracts huge crowds even today early in the mornings,
Coffee however was not the only item on the menu. These places also served food and
other drinks to their customers. The drink also became famous and as a result even five
star hotels began cashing in on it. Several hotels all over the country started opening
coffee- shops that catered to high- end customers. This showed the popularization of
coffee cafs, to all sections of society.

The drink has now become more of a concept than merely a drink itself. The last decade
witnesses the growth of numerous coffee pubs in the country. A number of coffee caf
owners tried to westernize the taste in contrast to the filter coffee. Now, large retail chains
like Qwikys, Barista, and Caf Coffee Day have opened up around the country. The
concept of a caf today is not merely about selling coffee, but about developing a national
brand. Retail cafs now form a multi- crore industry in the country, and have huge
potential for growth locally, and internationally.

NEED/JUSTIFICATION

CAF COFFEE DAY

Indias favourite coffee shop, where the young at heart unwind.
Caf Coffee Day is a part of India's largest coffee conglomerate, Amalgamated Bean
Coffee Trading Company Ltd. (ABCTCL), the first to roll out the coffee bar concept in
India with its first caf in Bangalore. Its a Rs. 750 crore, ISO 9002 certified company.
With Asias second-largest network of coffee estates (10,500 acres) and 11,000 small
growers, making its holder the largest individual coffee plantation owner in Asia, this in
addition to being India's only vertically integrated coffee company. Coffee Day has a rich
and abundant source of coffee. This coffee goes all over the world to clients across the
USA, Europe and Japan, making us one of the top coffee exporters in the country.

We all know that Caf Coffee Day is one of the most popular hangout places. The coffee
joint is very famous among youngsters. Coffee is one of the favorite beverages and has
become more appealing because of its variety.

Coffee has been around in India since the 17th century. However, coffee drinking has
traditionally been largely restricted to domestic consumption, and mostly in the South
Indian states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh. Coffee has been
around in India since the 17th century. However, coffee drinking has traditionally been
largely restricted to domestic consumption, and mostly in the South Indian states of Tamil
Nadu, Karnataka, Kerala and Andhra Pradesh.

India ranks sixth as a producer of coffee in the world accounting for 4.5% of the global
coffee production. India has about 170,000 coffee farms cultivating around 900,000 acres
of coffee trees. India is the largest producer and consumer of milk in the world with 98%
of milk being produced in rural India. Coffee consumption in India is growing at 6% per
annum compared to the global 2% plus.

Caf Coffee Days menu ranges from signature hot and cold coffees to several exotic
international coffees, tea, food, desserts and pastries. In addition, exciting merchandise
such as coffee powders, cookies, mugs, coffee filters, etc. is available at the cafs.
It was in the golden soil of Chikmagalur that a traditional family owned a few acres of
coffee estates, which yielded rich coffee beans. Soon Amalgamated Bean Coffee Trading
Company Limited, popularly known as Coffee Day was formed. With a rich coffee
growing tradition since 1875 behind it coupled with the opportunity that arose with the
deregulation of the coffee board in the early nineties, Coffee Day began exporting coffee
to the connoisseurs across USA, Europe & Japan. Coffee Day's two curing works at
Chikmagalur and Hassan cure over 70,000 tonnes of coffee per annum, the largest in the
country. Coffee Day has a well-equipped roasting unit catering to the specific
requirement of the consumers. The process is carried out under the control of experienced
personnel to meet highest quality standards. The most modern technology available is
used to maintain consistency and roast the coffee beans to the demanding specifications
of the discerning coffee consumers.

Caf Coffee Day (CCD) pioneered the caf concept in India in 1996 by opening its first
caf at Brigade Road in Bangalore. Today, more than a decade later, Caf Coffee Day is
the largest organized retail caf chain in India with cafes functioning in every nook and
corner of the country. Drawing inspiration from this overwhelming success, Caf Coffee
Day today has cafes in Vienna, Austria and Karachi. Whats more, new cafes are planned
across Middle East, Eastern Europe, Eurasia, Egypt and South East Asia in the near
future.

In October 2009, CCD unveiled a new brand logo, a Dialogue Box, to weave the concept
of Power of Dialogue. In accordance with this new brand identity, CCD planned to give
all its existing outlets a new look by the end of 2009. Cafs would be redesigned to suit
different environments such as book, music garden and cyber cafes suitable for corporate
offices, university campus or neighborhood. The change plan included new smart menu,
furniture design, among others.

OBJECTIVES
The following are the objectives of the project:1. The Coffee Caf Day Industry.
Section one of the Thesis is a peek at the coffee caf industry. It takes a look at
how the industry has evolved through time, from its early beginnings in Europe, to
its current form of a highly organized sector. It also details the structure of the
industry, with its various components, in its current form. It finally deals with how
this industry has grown in India, and what its current status is.
2. Case study on Caf Coffee Day.
This section deals with the overall operations of Caf Coffee
Day, and like the previous section, the functioning and aspects of its Marketing
and
Human Resource.
3. Defining Marketing Mix.
The 7Ps of marketing mix is explained with reference to Caf Coffee Day.
4. Market Survey.
The survey analyses how the company is performing in the areas of Taste and
Quality of Products, Value for Money, Delivery, People, Dcor & Architecture,
etc.
5. To Know the Recommendations.
The last section of the Thesis identifies areas where the organization is performing
excellently, and areas where they need to improve. It also provides
recommendations
based on the finding of the market survey, and the case studies of the firm. This
section will provide an overall perspective on the comparative study of the firm.

LITERATURE REVIEW

CCD An established brand image in India

Mr.V.G Siddhartha, Chairman CCD initiated his business interests in coffee by incorporating
Amalgamated Bean Coffee Trading Company Limited (ABCTCL) in the year 1994. From
Exports to commodity trading and building a brand, Coffee Day entered with Fresh n
Ground and subsequently went up the value chain thereby revolutionizing the metropolis
with Cafes under the brand Caf Coffee Day.

Caf Coffee Day is a division of India's largest coffee conglomerate, Amalgamated Bean
Coffee Trading Company Ltd. (ABCTCL), popularly known as Coffee Day, a Rs. 300 crore
ISO 9002 certified company. Coffee Day sources coffee from 5000 acres of coffee estates,
the 2nd largest in Asia, that is owned by a sister concern and from 11,000 small growers. It is
one of Indias leading coffee exporters with clients across USA, Europe & Japan.
Cafe Coffee Day (CCD) has an established brand image in India and ranks No 2 in the Brand
Equitys Most Trusted Brands 2008 survey in the food services category. Rival Barista is at
No 5. CCD has been able to make a connection with the Indian consumers, predominantly a
mong the youth. CCD is the market leader in India and was awarded the Exclusive Brand
Retailer of the Year by ICICI Bank in its Retail Excellence Awards 2005 for the organize
d retail sector.

CCD today has become the largest youth aggregator and from a marketing standpoint the
success has come by focusing on the three As Accessibility, Affordability and
Acceptability.
Bidisha Nagraj, The Marketing President of Caf Coffee Day.

Although demographically, a typical consumer would be male or female between 15-29

years of age, belonging to middle to upper class, we call our consumers young or young at
heart. We are about juke boxes, good and affordable coffee and food. The brand fit is with the
youth or young at heart. So we often look out for brands that are aspirational in nature
Sudipta Sen Gupta, Marketing Head, Caf Coffee Day.

Innovative formats to woo new customers.

During our college days we use to be satisfied with drinking coffee in the canteen or the
roadside dhaba, but young people today want a posh environment to chill out.
Sudipta Sen Gupta, Marketing Head, Caf Coffee Day.

The three formats- movie, sports and books will attract all kinds of customers. The average
age of visitors to CCD ranges from 18-30. With the new formats the company will cater to a
varied customer base.
Caf Coffee Day, Marketing President, Bidisha Nagraj.

Ever since its entry in India, CCD created an entry barrier for competition with as many as
four CCD cafs dotting a single street. The cluster/blanket strategy aimed at getting the

customers habituated to the brand. Within the Mumbai suburbs of Bandra, CCD has six
outlets. At another location it has six cafs within a span of half a kilometer. This leads to an
increased footfall for the company.

LIMITATIONS

The following are the limitations:1.

A study is restricted only for selected CCD outlets

2.

Time duration was 60 days

3.

The respondents may give biased opinion.

RESEARCH METHODOLOGY

Primary Data:
1. Survey through questionnaires
2. Face to-Face interview
Sample size: 100
Sample unit: Customers of Caf Coffee Day
Sampling method: Convenience Sampling

Secondary Data:
The major source of secondary data is through internet .The information on coffee
industry and company profile of Caf coffee Day is collected through internet.