Costa Coffee eyes lucrative Indian market, to open 300 outlets |
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Fri, 26 Aug 2005 06:05
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LONDON - Leisure group Whitbread Plc has disclosed that it plans to take its flagship Costa coffee chain to India. The group said that it planned to open the first of the 300 planned outlets in
India's capital city, New Delhi, in September.
Costa's Managing Director Mark Phillips said that the group had identified a local partner and had signed a franchise deal to start the chain of coffee shops. He acknowledged the fact that Indians were traditionally tea drinkers, "People think of India as a tea-drinking nation. But the reason we identified India was because its young, affluent middle-class like to drink coffee and like to differentiate themselves from the older generation," Phillips told The Financial Times in a candid interview. Even though India is a prominent grower of coffee beans, Costa will initially import beans from beans from Venezuela and Kenya and roast these in Italian fashion.
“India is predicted to become the fourth-largest economy in the world and has a growing middle class. We estimate there are 40 million potential Costa customers there,” Phillips predicted. The local partner in this venture is Devyani International, a company that specializes in bringing western brands to the country.
Costa will have its task cut out in luring Indians away from tea though. Although there has been a spurt in Coffer bars of late in the country, notably in Bangalore where outlets like Cafe Coffee Day and Barista's have made their presence felt, coffee is yet to carve a place for itself in the average Indian's heart. Traditionally, the day begins here with a cup of tea and it is going to be a Herculean task to replace this with coffee. However, the spurt of call-centers and the relatively well-off college going youth in the country have adopted coffee in a big way. And it is this market that Costa hopes to capture before Starbucks enters into the fray. “This is a major deal for Costa and we are delighted to be the first international coffee brand to open in this fast-growing market. There are already successful local concepts, so there is a proven consumer demand for the product," Phillips concluded.
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