The rise and fall of Café Coffee Day

Posted on 03 Sep 2022 10:00 in Small Business Hacks
by Zainab Sohangpurwala

Café Coffee Day-The name that makes many nostalgic and some unaware and confused. This legendary coffee chain went through a rollercoaster ride and is still recovering. There is a lot you can learn from its journey and its competitors. Read along to know.

Café Coffee Day or commonly known as CCD is a multinational chain of coffeehouses started by V. G. Siddhartha in 1966. It all started in Bangalore as a small venture of growing homegrown coffee, brewing it, and serving it at the café.

 

Even the owner was unaware of how this small venture would become a country-wide sensation. It operated more than 1752 outlets across 243 cities. The tagline 'A lot can happen over coffee' appealed to all youngsters, couples, friends, and even working professionals. It became the go-to place for social gatherings. Meetups as well as work meetings. Pocket-friendly coffee and snacks along with comfortable tables and chairs attracted people of age groups as well as economic backgrounds. Plus, there was no restriction on the stay of the customers. Customers could buy one coffee and sit for hours. This concept was new in India as it was clustered with restaurants that made sure customers leave after their meal is done.

Competition enters and disrupts CCD's fame

This made CCD a huge success. But their glory was not sustained for a long time. As competition entered the market CCD could not grow or sustain its customers. The American coffee chain Starbucks became its major competitor. Local cafes and breweries also made it difficult for CCD.

 

Starbucks rise and CCD's fall

Starbucks entered the Indian market with a bang. As a lot of Indians ape, the west flocks and flocks of them went to Starbucks to enjoy its premium coffee and ambiance. The concept of writing names on cups and the aesthetic paper cups made it a trend. People used to go to click pictures with the cup and post them on social media rather than enjoy the beverage.

Starbucks appealing packaging attracted many

But this strategy boosted the sales of Starbucks. Every customer promoted it. This led teenagers and young adults to drift to it. Clean washrooms, free Wi-Fi, and a beautiful ambiance attracted a lot of working professionals. CCD at this time could not live up to the competition.

 

It provided not only lip-smacking coffee but also an amazing ambiance. It provides an experience rather than a product. It sells the American lifestyle to the Indian masses.

 

The year 2019 brought shockwaves for CCD as well as the nation. The founder of CCD V. G. Siddhartha committed suicide due to the burden of heavy debts. He wrote that CCD was under Rs 7200 crore in debt as of March 2019. This created a lot of negative outlooks toward the brand. The negative publicity and ambiguity regarding the cause of his death made a lot of customers shift from CCD to other coffee houses and cafes.

 

A lot of stores shut down; the quality of products also decreased. But Siddhartha's wife was determined to change the fate of this company. She sold a lot of assets and brought down the debt to Rs 2909.95 crore in 2020 and Rs 1731 crore by March 2021. The company is still struggling but is in a much better position now.

 

What does Starbucks do that CCD does not?

As I wanted to get primary on-field data, I went to both these coffee houses to observe why people prefer Starbucks over CCD and vice versa. Starbucks provides a wide range of products like hot coffee, cold coffee, cakes, savories, and snacks. Seasonally it changes its menu and adds new drinks. For occasions such as Christmas, and Halloween Starbucks makes red and orange-themed drinks. It also changes its cup design according to the festive season. It customized the drink as per the customer's wish. Be it low fat, double cream, extra sauce, or no ice, it customizes each drink as per the customer's need.

 

The clean washrooms, tables, and chairs provide a comfortable atmosphere to work. It also provides charging points near tables so that people can charge their devices and work.

 

CCD on the other hand does not customize drinks. They have a more rigid menu and are not open to customization. Snacks and cakes are very few and are overpriced. There is a unisex washroom in most outlets which is not very clean.

 

In interviewing people who, come to CCD they said that the drinks are affordable, and as fewer people come it remains quiet and peaceful.

 

Local cafes and breweries have attracted a lot of schools and college students and freelancers. Each day it is getting difficult to attract and retain customers.

 

This is the story of how one of the famous coffee chains is declining due to competition. But the story doesn't end. CCD is trying to cope. There is a lot that people can learn from the 2 companies. Experiential marketing, product promotion, ambiance and so much more. Let us know in the comments below what you learned from this blog and how you will implement it in your business.

                                                     

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About the author

Zainab Sohangpurwala     
Passionate about helping companies grow their business via content marketing.


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