Capturing India's Percolating Coffee Market

Presented By:

• Sanjeev Vishwakarma• Ketki Joshi• Abhishek Padukone• Amita Balsundaram• Bhupesh Bhute• Ashish Ghanavat

Case Overview-Sanjeev

Coffee Consumption in World

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Series1

Coffee Consumption in India

• India's coffee consumption pattern gives a clue to the potential that the market holds.

• Per capita consumption of coffee is just 85 grams, compared to 4.5 kilograms in France, 4.6 kilograms in Japan and 6 kilograms in the U.S.

• While India is the sixth largest coffee producer in the world, with an annual output of 300,000 tons, domestic consumption is only a third(100,000 tons)

• India is predominantly a tea drinking nation.• Coffee is a staple only in the southern part of the

country

Coffee consumption in India stagnated at 55,000 tons annually(Mid 90’s), it has doubled since then because of:

• It is believed that the entry of global heavyweights:

will change the game further. • There is bound to be a deeper degree of investment by the existing players, • Entry of big global brands could be a threat to existing players who will have

to work harder to retain customers• Due to this different formats will enter. • Ex : Dunkin' Donuts worldwide is a pick-and-go play. On-the-go coffee

consumption is still nascent territory in India

Creating New Entry Points

Starbucks will source and roast green coffee beans from Tata Coffee

set up retail outlets in partnership with the Tatas

• 17,000 stores in 55 countries, including 426 in China• agreement with Tata Coffee, India's largest coffee producer, in

January’11

said the company is "enthused" about entering the Indian market

Starbucks CEO

Howard Schultz,

Entry Route Issues faced by Starbucks

• Starbucks had in fact begun scenting opportunity in India much earlier, and initially wanted to make a solo entry

• But the company's effort was stalled by FDI regulations -- India does not allow 100% foreign ownership in single-brand retail outlets -- and was compelled to take the partnership route

Entry Route Issues faced by Dunkin’ Donuts

• In February’11, following two years of groundwork and negotiations, the company announced a master franchise agreement with north India-based Jubilant FoodWorks, which operates the Domino's pizza chain in India

• "We will raise the bar for existing players," says Ajay Kaul, Jubilant's CEO, who will oversee Dunkin's expansion

Revenues for Dunkin’ Donuts

• of Dunkin's revenues in the U.S is brought by coffee and other beverages60%

• of Dunkin's revenues in Asia, is accounted by food80%

• of Dunkin's revenues in Asia, is accounted by beverages20%

Strategy of Dunkin’ Donut

• Dunkin' Donuts, which is known globally for pairing coffee with donuts and bagels, is banking on food to grab a bite of the Indian palate

• "Unlike others who are pure cafes, the Dunkin' story is about all-day food, donuts and coffee for premium and middle-class consumers," notes Kaul

Strategy of Dunkin’ Donut….

• "There's a big opportunity for both coffee and food in India," Kaul adds.

• Dunkin's Westernized menu will gradually expand to include Indian fare

• According to Kaul, plans are to look at all formats for the new stores, including 100 to 150 square-foot kiosks

• The first Dunkin' store is expected to open in the first quarter of 2012

• The target is to open 30 outlets in three years and increase to 100 in the next five years.

Expanding the network

Roadblocks Ahead

Recommendation & conclusion

References

Thank You