Café Coffee Day, popularly known as CCD, is not only a coffeehouse for the individuals of India but has become India’s favorite place for coffee and conversations today. Founded in 1996, the Bengaluru-based Indian multinational chain of coffeehouses has emerged to be one of the favorite haunts of the millennial and the Gen Z group within a short time.
CCD had served over 1.6 billion cups of coffee annually in six countries when it discovered that it was on the brink of bankruptcy. This is why it decided to shut down its operations outside India. It was present in a list of countries — Austria, Czech Republic, Malaysia, Nepal, and Egypt before this decision.
The first Café Coffee Day outlet was set up by CCD owner V. G. Siddhartha on July 11, 1996, in Bangalore, Karnataka, with the slogan’ A big deal can occur over some espresso’.
Café Coffee Day quickly extended through the urban areas in India, including new stores with more than 2000 bistros opened all over the nation by 2016. In a range of 20 years, CCD has blended its approach to progress, with the fame and cherish it has reaped.
History of Cafe Coffee Day
How CCD Started the Journey?
Mounting Debts and Controversies
The Missing of the Founder of CCD and his Death
Cafe Coffee Day Business Plan And Marketing
The Present Day CCD
Achievements of CCD
History of CCD
The history of Café Coffee Day lies in its origins as a pioneering Indian coffee chain, founded in 1996 by V.G. Siddhartha, with the vision of bringing coffee culture to India and making it a popular hangout spot for the youth. Café Coffee Day Global Limited Company is a Chikkamagaluru-based business that produces coffee on its very own land of 20,000 acres. It is the biggest maker of arabica beans in Asia, sent out to different nations including the U.S., Europe, and Japan.
V. G. Siddhartha began the Café chain in 1996 when he started Coffee Day Global, which is the parent of the Coffee Day chain. The first outlet was opened on July 11, 1996, in Bangalore, Karnataka.
Soon after the foundation of CCD Coffee, the biggest challenge faced by Café Coffee was to make a revolutionary change in Indian culture where the majority of the population preferred drinking tea rather than coffee.
CCD quickly extended to different urban cities in India, with more than 1000 bistros opened in the country by 2011. In 2010, it was declared that a consortium driven by Kohlberg Kravis Roberts would invest INR 10 billion in Coffee Day resorts which are owned by CCD. It was during the same time the brand changed its logo to the present logo that is used by the company to feature the chain as a spot or place to talk.
This was finished with real changes in the format of the stores, including the expansion of parlors a complete redo of the interiors, and, above all, its slogan “A lot can happen over coffee.” The organization is vertically incorporated to cut expenses: from owning the plantations to becoming the coffee, preparing the espresso machines, and making the furniture for the outlets.
CCD Case Study
How CCD Started the Journey?
CCD started its journey with the incorporation of its parent Coffee Day Global Limited Company in 1996 by V.G. Siddhartha. It was on July 11, 1996, when the first CCD outlet was set up at Brigade Road, Bangalore, Karnataka.
Siddhartha did his Master’s in Economics from Mangalore University and had an enthusiasm for innovation. VG Siddhartha dived deep into the stock market in his early career. He had worked for JM Financial and Investment Consultancy in Mumbai when he was just 24 years of age. Veerappa Gangaiah Siddhartha Hegde acted there as a Management Trainee/Intern in portfolio Management and Securities Trading on the Indian Stock Market under Vice-Chairman Mahendra Kampani.
However, after completing his 2 years of work anniversary with JM Financial Limited, VG Siddhartha had to return to Bangalore when he received the capital from his father to start a business of his choice.
VG Siddhartha started by buying a stock market card for INR 30,000, and a company called Sivan Securities, which was later renamed Way2wealth Securities Ltd. The venture capital division of the company came to be known as Global Technology Ventures (GTV).
Siddhartha emerged as a full-time proprietary investor in the stock market in 1985. Furthermore, he also became the owner of 10,000 acres of coffee farms by then.
“When coffee trading was liberalised in the ’90s, I doubled the money I had invested in the plantations within a year,” said VG Siddhartha.
It was then that the Amalgamated Bean Coffee Trading Company Ltd (ABCTCL), a company that focused on coffee exports, was born in 1993.
Siddhartha’s plantations began to produce 3,000 tonnes of coffee, and with the help of ABCTCL, he traded over 20,000 tonnes. This way, in around two years, the company became the second-largest exporter from India.
As soon as its first coffee outlet or CCD store was set up on Bangalore’s crowded Brigade Road, it began to start a new journey.
The company soon expanded far and wide with its revolutionary concept, which allowed the millennials to sit and talk while sipping on their favorite beverage.
CCD is India’s largest coffee chain to date and is owned by Coffee Day Global, a subsidiary of Coffee Day Enterprises.
He was inspired by the proprietors of the “driving espresso brand in Germany, — Tchibo”. This motivation gave Siddhartha a dream of an alternate world generally speaking and opened his eyes. It likewise gave a heavenly idea. With that thought, cup by cup he made his billion-dollar domain.
The company owned around 1,700 cafes, 48,000+ vending machines, 532 kiosks, and more than 403 ground coffee-selling outlets. The annual turnover of Coffee Day Enterprises was worth INR 4,264 crore, as per a Moneycontrol report of 2019.
Devashish Shrivastava
Mounting Debts and Controversies
Café Coffee Day had accumulated a total debt of around INR 6,550 crore, as was reported in March 2019.
The coffee price hit a 13-year low in the international market, which also dragged the Indian prices when the Indian coffee exports were down by 10 %. To combat this debt, Siddhartha had to sell his entire 20.32% stake in the Bengaluru-headquartered IT services firm, Mindtree to the engineering major, L&T for around INR 3,200 crore. He was the largest shareholder in Mindtree and exited the company after remaining invested for close to two decades.
The mounting debts were just unsettling not only for the business but for Siddhartha as well. Even with the sale of his stakes, going ahead turned out to be tough because the working capital requirements could not be met.
All these led Siddhartha to strike a deal with the global beverage maker Coca-Cola for an equity sale in the flagship Café Coffee Day (CCD) at an enterprise valuation of around INR 10,000 crore. Besides, Blackstone was also reportedly in talks with the company to buy a majority stake in the real estate venture of the founder, known as Tanglin Developments, for around INR 2,800 crore.
VG Siddhartha slowly started to come under the radar of the Income Tax Department, which first raided the premises of the Café Coffee Day owner in September 2017. They discovered around INR 650 crore of concealed income from the documents seized when they concluded the search and seizure operations.
The income tax raids were also eventually conducted at 20+ locations, including Mumbai, Bengaluru, Chennai, and Chikmagalur, by the senior officers of the Income Tax Department of Karnataka and Goa regions.
The Missing Founder of CCD and his Death
Siddhartha had been found missing since July 29, 2019, and this news of the missing MD was further confirmed by Coffee Day Enterprises.
Siddhartha had been found missing since July 29, 2019, and this news of the missing MD was further confirmed by Coffee Day Enterprises. Siddhartha had allegedly told his driver that he would be going for a walk near the bridge and asked him to wait at a distance on the 29th of July 2019. The driver lodged a missing complaint with the police after waiting for two long hours for his return. A fisher claimed that he saw someone jumping off the bridge, but it was only allegedly true until two days later when his body was found in the Nethravathi River backwaters.
The Café Coffee Day boss VG Siddhartha had supposedly left a letter where he expressed his unhappiness over not creating “the right profitable business”. Besides, he also alleged that a senior income tax officer allegedly harassed him.
“I have failed to create the right profitable business model despite my best efforts. I would like to say I gave it my all. I am very sorry to let down all the people that put their trust in me. I fought for a long time, but today I gave up as I could not take any more pressure.”
“I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders led to me succumbing to the situation. There was a lot of harassment from the previous DG income tax in the form of attaching our shares on two separate occasions to block our Mindtree deal and then taking the position of our Coffee Day shares… This was very unfair and has led to a serious liquidity crunch,” goes the last letter from the CCD chief.
In September 2019, the organization named reviewing firm Ernst and Young to examine their books of records. They also asked the inspector to investigate the conditions of the last letter composed by Siddhartha and the focus he put on it.
Without leaving much room for speculation regarding the company leadership, Malavika Hegde, the widow of Siddhartha, addressed all realities and showed radical honesty by taking charge of the sinking ship in December 2020. She is the daughter of the former Chief Minister of Kerala SM Krishna. She has a degree in engineering and has been associated with the coffee business since 2008. She was appointed as a non-executive director of the company in 2013.
Malvika took office at the most unprecedented time, burdened with the multiple responsibilities to take the company out of the debt mountain of whooping INR 7000 crore, make the company profitable, and retain the trust of her employees.
Sakshi Jadhav
CCD Business Model And Marketing
CCD has adopted a very effective business strategy, which is compartmentalized below.
Innovation and Expansion
The humongous amount of sustenance and refreshments made CCD possible. Besides, the ambitious moves of CCD and its rapid expansion into level 2 urban communities of India and other remote areas were some triumphant techniques that encouraged CCD to be on the fronts of its rivals like Starbucks and Barista.
Its different auxiliaries like Coffee Day Fresh ‘n’ Ground, Coffee Day Square, Coffee Day Resorts, Coffee Day Beverages, and so forth have helped the organization to satisfy the client’s needs and stay ahead simultaneously.
Also, CCD’s regular involvement on Twitter, Facebook, and Instagram further engaged its customers. Café Coffee Day also brought in the character, Beano, to connect with the purchasers in 2016.
Strategy of Distribution
In 2020, there were 1,752 CCD outlets crosswise over 29 states of India. Café Coffee Day has likewise extended outside India with its outlets in Austria (Vienna), the Czech Republic, Dubai, Malaysia, and Cairo, Egypt. The Indian sorted-out division has the potential for around 5,000 bistros, yet less than 1,000 bistros exist, as of now.
| S.No. | Elements | Illustration |
|---|---|---|
| 1 | People | 17000+ employees, 20 in R&D, 70 in HR |
| 2 | Technology | The latest technology in a coffee plantation, Curing, roasting, and Probat roasting machines |
| 3 | Channels | Cafe, Lounge, Square |
| 4 | Value Proposition | Identifying target customers, defining the benefits, and providing the best value to satisfy |
| 5 | Profit Formula | Financial sustainability of the firm in long run basis |
| 6 | CSR | Provide free education and training to villagers and offer them jobs |
Difference In Concoction
These are some prominent moves that made CCD stand out from its peers and rivals:
- Past nourishment, the emphasis is on getting the experience right. CCD propelled its application to follow shopper conduct, customize offers and advancements, empower cashless exchanges through implicit wallets, and fabricate unwaveringly.
- In 2016, CCD partnered with Freecharge to empower cashless exchanges at the outlets, where the clients could utilize their portable numbers to pay and finish the exchange in under 10 seconds. Be that as it may, Harminder Sahni, author, and MD Wazir Advisors, consider these as strategic contributions.
- To further lift involvement, CCD started Café Concerts in 2016 with attention to live gigs in Mumbai, Delhi, Pune, and Bengaluru. Cafe concerts were unique at the time when it was introduced by CCD and played a big hand in hooking the young crowd.
Sayantan Mondal
The 3As Strategy
The chief components influencing rivalry in the espresso retail area include evaluating, item/administration quality, brand recognition, taste, and item assortment.
To separate itself from rivalry, CCD has manufactured its retail procedure on 3As:
- Affordability: CCD ensures that it attracts every kind of customer — be it a school/college student or an office goer, at an affordable price.
- Accessibility: The goal of the brand was to ensure that the cafes should be within arm’s reach. CCD believes in serving people across the country by providing the same experience everywhere.
- Acceptability: CCD ensures that consumers should buy and drink their product without compromising on taste. The strategy was to bring people together to relax and unwind. The company further encouraged its customers with its catchy tagline that says “Let us catch up on CCD” which every Indian must have heard at one point or another.
The Present Day CCD
At its peak in 2019, CCD operated 1,752 outlets across 243 Indian cities. However Café Coffee Day reportedly shut down around 280 outlets in the wake of FY20 and with this, the company reported a total of 1480 outlets, as per the reports dated June 30, 2020. CCD closed 19 more stores in the past 12 months, reducing its total to 450 in 141 cities.
The Bengaluru-based coffee chain recorded a 10% rise in net revenue, reaching INR 1,013 crore ($120.6 million) for the 12 months ending 31 March 2024.
Coffee Day Enterprises Ltd (CDEL) reported a total default of INR 433.91 crore on interest and principal payments to banks, financial institutions, and unlisted debt securities, including NCDs and NCRPS, for the quarter ending June 30, 2024. The total loan funds of the company amounted to INR 1,159 crore, including INR 102 crore in long-term borrowings and INR 1,057 crore in short-term borrowings, with net debt at INR 881 crore as of FY24.
The company had been trying to pare its debts with the sale of its non-core assets after the death of its founder. CCD has announced to repay its debts worth INR 1644 crore to 13 of its lenders. This had been possible with the sale of its technology business park to Blackstone Group and Salarpuria Sattva at an enterprising value of INR 2,700 crore. The company also sold its stakes to Mindtree and L & L&T previously.
The company’s net debt was worth INR 2,909.95 crore in the FY20 and as per the latest reports dated March 31, 2021, CDEL’s net debt came down to INR 1,731 crore.
It was during the same time that CDEL announced that it had appointed Justice Manjunath to “suggest and oversee actions”, who will supervise the recovery of over INR 3,535 crore, which was allegedly siphoned out of the company into Mysore Amalgamated Coffee Estates Limited (MACEL), which goes as a personal firm promoted by its late founder V G Siddhartha.
The last report said that the “Management of the Company is putting its best efforts to get back the company on track.” It further added that “the debt levels have reduced significantly from the beginning of the financial year March 2021.”
CDEL’s net operational revenue was measured on a consolidated basis in FY21, which was valued at INR 853 crores against INR 2,522 crores in FY20.
The brand currently has a presence in the coffee, logistics, and hospitality segments. The coffee business of the company, which includes its popular café chain brand Café Coffee Day (CCD), contributed around 47% of its consolidated net revenue. The other remaining parts were a result of its logistics business and logistics, which accounted for 45% and 8% of the revenues.
CCD currently operates 450 cafes, which run in 141 cities, and 265 CCD Value Express kiosks. Furthermore, it also boasts of having 52,581 vending machines as of FY24 to “dispense coffee in corporate workplaces and hotels under the brand”.
Achievements of CCD
- 2007 – Cafe Coffee Day won the Times Food Award under the category of “Best Coffee Bar” from the Times of India
- 2008 – Cafe Coffee Day won the Burrper’s Choice Award for being cast a ballot as the “Coolest Café” by the clients of burrp.com
- 2009 – Espresso Day Global won the honor of “Retailer of the Year” under the classification of Food & Beverages (cooking administrations) by the Asia Retail Congress
- 2010 – Cafe Coffee Day won the Indian Hospitality Excellence Award under the category of “India’s Most Popular Coffee Joint: 2010”
- 2012 – Cafe Coffee Day was positioned as the 26th Most Trusted Service Brand in India and as the second Most Exciting Brand under the classification of “Nourishment Services” in India under a study done by Brand Equity (EconomicTimes)
- 2012 – Cafe Coffee Day won the Best Coffee Bar Award from mouthshut.com
- 2013 – Cafe Coffee Day was positioned as the 26th Most Trusted Service Brand in India under a study done by Brand Equity (Economic Times)
- 2013 – Cafe Coffee Day was granted “The NCPEDP – Shell Helen Keller Award 2013” by the National Center for Promotion of Employment for Disabled People for being a good example organization in creating work open doors for individuals with inabilities
- 2013 -Espresso Day Global was granted as the Best Retailer under the class of “Best Customer Service in Café Restaurant” by the Star Retailer Awards
- 2013 – CafeCoffee Day won the Brand Excellence Award in retail part from ABP news
- 2012-2013 – Espresso Day Global was granted a bronze prize by the Coffee Board of India for being the third-best exporter of green espresso
- 2014 – Espresso Day Global was granted “Retailer of the Year” (Organization Food and Grocery) for retail greatness by ABP News
- 2014 – Espresso Day Global was granted ‘Retailer of the Year for brand greatness by ABP News
- 2014 – Cafe Coffee Day was positioned as the 22nd Most Trusted Service Brand in India, as 27th Most Exciting Brand in India, and as second Most Exciting Brand under the class of “Nourishment Services” in India, under an overview done by Brand Equity (Economic Times)
- 2014 – Mr. V G Siddhartha was conferred upon the ‘ET Retail Hall of Fame for his commitment to the development of the retail part
Conclusion
Café Coffee Day has faced tough times but is still loved for shaping India’s coffee culture. The company is working hard to reduce its debt and grow again. With its strong brand, loyal customers, and new ideas, CCD can remain a favorite place for coffee lovers.
Archana Karthikeyan
FAQs
When was Cafe Coffee Day founded?
Cafe Coffee Day was founded in the year 1996.
What is the full form of CCD?
CCD stands for Cafe Coffee Day.
Is Cafe Coffee Day in debt?
Yes, CCD has been in debt for a long time. Coffee Day Enterprises said it has Rs 518 crore of debt including both short and long term and that it has defaulted on about Rs 263 crore of payments.
Is Cafe Coffee Day shutting down?
Almost 500 cafe outlets of the coffee chain Cafe Coffee Day have been closed down since April 2019, as the company looks to arrest the falling profitability of its coffee business and readies for divestment of the business. CCD had to close these outlets as it readies for divestment.
What happened with Cafe Coffee Day?
Coffee Day Enterprises Limited reported that at least Rs 2,000 crores ($270 million) was missing from its accounts, soon after the death of founder V.G. Siddhartha which led to an investigation initiated by their board.
What is the CCD tagline?
“A lot can happen over coffee”, is the tagline of Cafe Coffee Day.
Who are the competitors of Cafe Coffee Day?
A few cafe coffee day competitors are – Starbucks, Costa Coffee, Barista, and Gloria’s.
Can I sit and work in CCD?
It’s ok to sit and work until you’re asked to leave.
Why is CCD in loss?
CCD is at a loss because the founder V.G. Siddhartha died of an apparent suicide in 2019. His sudden death came as a surprise and caused a huge loss to the company. Also, the brand has suffered another hit due to the Covid-19 pandemic and the lockdown.
