CAF COFFEE DAY

CORPORATE PROFILE
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.

In the calendar year 2000, Coffee Day exported more than 27000 tons of coffee valued at US$ 60 m to these countries and, for the second time in its short career of 7 years retained the position as the largest coffee exporter of India.

Coffee Day has a wide and professional network in the major coffee growing areas of the country comprising over 48 agents and 50 collecting depots. Coffee Day's two curing works at Chikmagalur and Hassan cure over 70,000 tons 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.

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Coffee Day Comprises of the following Sub Brands

Coffee Day - Fresh & Ground Caf Coffee Day Coffee Day Vending Coffee Day - Xpress Coffee Day Exports Coffee Day Perfect

Caf Coffee Day currently owns and operates 213 cafes in all major cities in India. It is a part of India's largest coffee conglomerate named Coffee Day, Rs. 200 crore ISO 9002 certified, company. Coffee Day's most unique aspect is that it grows the coffee it serves.

Key Features
Pioneers of the Caf Concept in India with the its first Caf at Brigade Road, Bangalore in 1996. This Caf was opened as a Cyber Caf (first of its kind) but later, with the burst of cyber cafes it reverted to its core competency. Coffee. Essentially a youth oriented brand with majority of its customers falling in the 15- 29 year age bracket. Each caf, depending upon its size attracts between 400 and 800 customers daily. It is a place where customers come to rejuvenate themselves and be themselves. USP of the Brand: Affordable Price Coffee Winner of Platinum, Gold, Silver and Bronze medals at the India

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Recent Development
1) Coffee Day set to brew 3 premium formats

India's biggest cafe chain Coffee Day will unfurl three new premium formats as it brews the next phase of growth. Coffee Day Square, which will become the chain's flagship outlets, will roll-out into four metros over the next six months, specializing in 'single origin' coffees - classic beans sourced from a single estate in a single country across the world - targeted at a more discerning consumer. Coffee Day Lounge will be cafes where beverage is paired with food, where people "meet over a meal" and not just coffee. The third format, still to be named, may resemble a cafe nightclub and would look at offering a more vibrant experience with live DJ music and bar-stool seats.

The decade-old Coffee Day, which heralded a cafe revolution in urban India, is also powering ahead with its existing core format that has carved out a place as 'young hangouts'. At present, the chain has 694 outlets and is seen adding 20-25 every month in a slowing market. The 3,000 sqft first Coffee Day Square, the most premium of the emerging formats, is expected to open in Bangalore next month; to be followed by 8-10 more outlets across the four top metros in six months, Cafe Coffee Day director Alok Gupta told ET. "Cafe Coffee Day has been a youth hangout, now Coffee Day Square will be a 'coffee hangout' for a more discerning, young-at-heart consumer who wants a truly great cup of coffee," he added. Besides the single-origin brews from around the world, it will also propel India's signature coffees - like Araku Emerald and Rajgiri Pearl - into the cafe culture. "The effort is to take consumers up the value chain and connect them with India's coffee heritage in a contemporary way," Mr. Gupta said. The next in the line, Coffee Day Lounge, will be more focused on the dining experience. "This will be a gourmet format where we will look at food as a separate vertical. Here we will offer diet food, traditional foods and separate offerings for children, among others," he said. The biggest youth puller, however, is likely to be the third format resembling a nightclub, which the company will start rolling out only after six months. Mr. Gupta describes this as an outlet where people can "connect standing rather than sitting".

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2) Cafe Coffee Day to have 900 outlets by year end.

India's biggest coffee cafe chain, Cafe Coffee Day (CCD), has just upped its growth target. CCD marketing president Bidisha Nagaraj says the latest plan is to grow from the present level of 590 cafes to 900 by the end of FY09. This works out to a growth rate of almost 68% for the remaining nine months of the fiscal. If one takes 520 cafes CCD had at the beginning of the fiscal as the base, the growth rate will be a whopping 92%.

"We are constantly revising our target upwards," she says. "We planned to end the previous fiscal with 480 cafes, but exceeded it by over 8% and set up 520 cafes. The basis for our growth strategy for this fiscal is a brand archetype study, which indicates that there is a growing market for CCD in both the 15-29 age group and the 29-plus segment. We are averaging 500 footfalls per cafe per day. At present, 80% of our consumers are in the 15-29 age group."

3) Cafe Coffee Day adds aroma to Karachi.

Born in Bangalore, brewing in Karachi. Can Indian coffee add some pep and aroma to Pakistan amid an economic downturn? Amin Hashwani, the CEO of Cafe Coffee Day (CCD) in Pakistan, is hopeful that more people will flock to his cafes in the coming months.

He is wooing young Pakistanis. Regular customers say the best thing about the cafe; is the international standards and the Pakistani prices and some sandwiched designed for local taste.

However, what makes the familiar urban Indian brand look unique is not the price, but the very fact that CCD is possibly the only franchise of its kind operating across the historically troubled border. "Although there are restrictions for investment from both countries, there should be a genuine effort to not just look at trade but long-term investment to create vested interests in maintaining good relationships between the two countries," comments Hashwani, who also heads the Pakistan India Business Forum.

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The easier part for the Cafe was brand Recognition in the early days. "Most people who walked through the doors said that they knew about the Cafe and were eager to see what was in the menu," recalls Ajay Solanki, the operations manager.

Solanki, who left a career in the hospitality business in Dubai to come back to Pakistan, has shed his initial skepticism about prospects for an Indian caf ;. Muhammad I am, a software engineer, says that it makes all the difference for him.

"I come here with my family as a treat and the service is good and the prices make it worth the visit." Solanki says.

4) Cafe Coffee Day to expand in Pakistan.

Cafe Coffee Day, India's largest retail coffee shop chain, plans to open 19 more outlets across Pakistan in the next 12 months after the success of its first venture in Karachi, a top company official said here Sunday.

"We are opening the second retail outlet in Karachi next week in the posh Clifton area where we are already operating the first outlet since November 2006. We plan to open 18 more such outlets in the four provinces of Pakistan, covering Islamabad, Lahore, Peshawar and other cities later this year," Cafe Coffee Day director Naresh Malhotra told IANS here.

Unlike in Vienna where the company already operates two retail outlets on its own, it has opted for a franchise route in Pakistan to comply with the regulatory framework there and protect its investments.

"Buoyed by the overwhelming response to our first outlet, we have decided to open the second one in the same locality to create a cluster for greater visibility, brand promotion and increasing market share.

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"We intend to create similar clusters in other Pakistani cities to hard sell our products and maintain our identity," Malhotra said on the sidelines of the second India International Coffee Festival (IICF 2007) here.

With an upfront investment of about Rs.5 million in each outlet, the company plans to make a cumulative investment of Rs.90 million in Pakistan and create a retail chain as in India.

As part of its expansion spree in the subcontinent, the subsidiary of the Rs.3.5-billion Amalgamated Bean Coffee Trading Company Ltd (ABCTCL) plans to open about 100-150 outlets spanning 100 cities in fiscal 2007-08 with an upfront investment of Rs.300-450 million.

"We are setting up our kiosks with vending machines at about 120 railway platforms across the country in the next 12 months to boost consumption of our coffee varieties and brands," Malhotra added.

The company is also in talks with two more low-cost air carriers to extend its reach beyond Air Deccan and Go-Air in airline catering.

The private firm, which raised Rs.1.25 billion through two rounds of funding from the International Finance Corporation (IFC) of the World Bank and the US-based Sequoia Capital, is projecting about 30 percent annual growth to post about Rs.4.5 billion for the current fiscal.

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TARGET MARKET

Pioneering the Coffee Caf concept in India, Coffee Day opened its first caf at Brigade Road, still one of the most happening places in Bangalore. The young and the young at heart immediately took to the place. A smart, simple space that they could call their own for a whileDiscuss, listen to conversations, hold short meetings or even have a lot of good funall over steaming cups of coffee. A little over a decade later, it is still the largest organized retail caf chain in India with cafs across the landscape. Coffee Day today is totally in tune with its target audience. Its a rapport thats as strong as the deep red coffee day color.

When Caf Coffee Day was launched in 1996, the target audience was expected to have a similar profile and the logo adopted for the cafes was a close variant of Coffee Day. There was a profile match, for some time. The years rolled by and the caf culture percolated almost completely to the Indian youth by year 2000. No longer was the caf a bastion of the intellectual, it had become an urban youngsters favorite hangout. An in-house research shows that Caf Coffee Days customers are mostly young college students and young professionals.

And it was time for Caf Coffee Day to rejuvenate itself - through its look and logo. The change of logo is the beginning of a process at caf Coffee Day. The spin offs of this contemporization process will be seen in the brand communication and the interior design as well.

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PRODUCT MIX

COFFEES & TEAS Hot Coffee Espresso Espresso Americano Macchiato Cappuccino Caf Latte Coconino Caf Mocha Irish Coffee

REFRESHING ALTERNATIVES Granitas Blood Orange Cool Blue Pineapple Crush Emerald Ice Ruby Surprise

EATABLES Melting Moments Banana n Walnut Cake Banana Chocolate Mousse Banana Caramel pie Chocolate Doughnut Cookies Marble Cake Pineapple Getaux Chocolate Cake

International Coffee Colombian Juan Valdez Ethiopian Qahwah Kenyan Safari Cold Coffee Sweet Mint Cold Sparkle Brandied Banana Tropical Iceberg Iced Eskimo

Smoothies Mango Colada Strawberry Colada

Ice Creams Vanilla Chocolate Seasons Best

Cremosas Litchi Ginger Spice Pina Colada

Quick Bites Samosa Puff Pizza Croissant French Fries Kathi Roll Wraps

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POSITIONING STRATEGY

Consumer Profile:

Research shows that 37% of the customers are between 20 and 24years. 27% of the customers are between the age group of 25-29 years. 60% of the customers who visit the caf are male and 40% are female. 52% of customers who visit the cafes are students. 18% of the customers visit the cafes daily while another 44% visit weekly. Each caf, depending upon its size attracts between 500 and 800 customers daily, mainly between 4pm and 7 pm. Customers describe Caf Coffee Day as the place they frequent most after home and workplace/college. It is a place where they meet friends and colleagues, in groups of 3 or more. The prices here are perceived to be reasonable and it is a place where customers come to rejuvenate themselves and be themselves rather than a place to be seen at vis a vis other cafes.

Brand Image Caf Coffee Day is a regular meeting place for 15 to 29 years old, both male and female, who are waited on by friendly and informed staff, and are, offered the best made coffee, hot or cold, beverages and food in an invigorating ambience. It is urban youngsters favorite hangout. Its customers are mostly young college students and young professionals. It is for those who are young or young at heart.

The significance of the Colours The RED stands for leadership and vitality. It also stands for passion ( for coffee). The GREEN stroke harks back to our coffee growing heritage and the coffee plantations that we own.

The significance of the Text, Fonts and Swirl Caf is noticeably larger than the rest of the text inside the logo box. This denotes that Caf Coffee Day pioneered the caf concept in India way back in 1996. Caf Coffee Day would like
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to own the word caf in the minds of its customers. When one thinks of a caf its got to be Caf Coffee Day. The font used for Caf is called SLURRY. The font looks as though the letters have congealed out of a liquid. It gives the impression that the word is still forming itself and evolving into something new and something better constantly. This is the characteristic of Caf Coffee Days customers and this is the characteristic that the brand too wants to adopt.

The upward SWIRL inside the logo box stands for the invigorating and uplifting nature of coffee and the ambience at caf Coffee Day. COFFEE DAY has been written in the same stylized font as the earlier logo for continuitys sake as also to preserve some of the linkages with Coffee Day, its sister brand.

CONSUMER BEHAVIOR The coffee is mainly considered as a snack. Caf Coffee Day gave a new environment and ambience to have the same snack. People love to be the outlets and spend quality time with family and friends. Its not just about the coffee but also about the time the spent. Light music, great coffee and quality snacks make caf coffee day a favorite hangout place for both youngsters and the professionals. Even professionals love to have small meeting with clients in these places. Thats why they said that Many things can happen over a coffee .

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