Brewing hot profits via franchising

Coffee Day Xpress (CDX), a brand recognised for serving the taste of the brew from home, is a unique concept of convenient cafe, which follows the kiosk format for serving. In an interview, K. Ramakrishnan, President Marketing, Cafe Coffee Day shares the brand’s USP and success journey.

Priyanka Rai (PR): Tell us about the inception and development of Coffee Day Xpress (CDX).

K.Ramakrishnan (KR): In February 2003, ABCTCL the parent company of Cafe Coffee Day (CCD) came up with a new concept to bridge the gap between the leisurely coffee experiences that CCD provides and that of serving a quick cuppa from a vending machine. The idea was to offer the very best in every segment related to coffee to Coffee Day patrons and this concept was called the Coffee Day Xpress (CDX). CDX is a unique concept of convenient café, which follow the kiosk format for serving. It provides fast, hygienic, convenient-to-eat and affordable food and beverages to consumers on the go. It is a sanctuary where the harried metropolitan consumer can pause for refreshment before getting on with life. With its speed of service, convenient locations, freshness, superior quality of coffee, high hygiene standards and affordability, CDX has quickly reached more than 900 outlets across the country, of which 226 are franchise outlets.

PR: What have been your key marketing strategies in establishing this format?

KR: When it comes to marketing, the location and pricing of our product has been done in such a way that it cannot be ignored. We understand our product really well and we know our TG equally well. We have made this particular format for people who need quick refreshment. So the menu includes food and beverage offerings that are fresh fast, tasty, hygienic, convenient-to-eat and affordable.

The next task is to be present in locations where there is a need for fast and hygienic food and beverage options. Consequently you will find our kiosks conveniently located at places like malls, hospitals, high street locations, airports, railway stations, corporates etc. catering to the hunger needs of consumers on the move or those wanting to take a short snack break from their busy day.  So when the kiosk is strategically placed it cannot be missed.

PR: How do you plan to further expand your business horizons?

AR: We are exploring newer and untapped opportunities in tier I markets. For instance, apart from opening our CDX kiosks in corporates, schools, hospitals etc., we are exploring new destinations to open and operate our express cafe formats. We have recently launched our first CDX kiosk at the American Centre in Kolkata and Big Foot which is in cultural centre in Goa. We are also expanding our presence and tapping more opportunities in the tier II market where there is high scope of growth.

PR: What are the key challenges faced by you in establishing Kiosk format? How do you deal with competition?

AR: While kiosks are a successful business format there are a few challenges like sustainability, securing a good location and selling the product in style. When selling the product, one should give proper attention to the customer’s demands, while maintaining the quality of the product and focusing on an efficient delivery system. Our advantage lies in the unmatchable product list, consistency of the products and the level of quality. We maintain certain standards which is unmatched by competition which are primarily local vendors.

PR: Elaborate on special initiatives or programmes undertaken for training your staff?

KR: The café staff, (whom we call Bean Buddy) is our first and primary consumer touch point. Hence regular training is conducted in areas of quality service, billing systems, conversing on the menu etc. However, being a kiosk means they are trained on quicker modes of service, being prompt and efficient delivery.

PR: Kindly share franchise facts for CDX.

AR: This low investment-high returns business model has proved to be a success. The simplicity of the model and the promise of the return on investment (ROI) encourage us to open more outlets. An aspirant franchisee requires an area of 50-100 sq ft in a location that has high footfalls.

PR: How do you see the Kiosk format shape up in India in the coming decade?

AR: There has been a major shift in food habits in metropolitan cities. About 86 per cent of households prefer to have instant food due to steep rise in dual income level and standard of living, convenience, and influence of western countries. The ‘take-away’ space is and will continue to increase phenomenally due to the fast paced urbane lifestyle. Moreover with several healthy and tasty options available in the QSR segment today, consumers don’t have qualms over indulging in kiosk format offerings.

Additionally, according to the recent report on “Indian Fast Food Market Analysis”, the Indian fast food industry is anticipated to grow at a CAGR of around 34 per cent during 2011-2014. And the new growth is likely to come from Tier II and Tier III cities where major fast food players are likely to expand aggressively. With this the kiosk format will grow exponentially.