Coffee Consumption in India is on the Rise

The UK's leading coffee chain Costa Coffee is quite bullish on the country. Excerpts: Costa Coffee's initial plan was to open 300 outlets in India in three years, but so far it has managed to open about 10 outlets. Do you think it would be able to meet its target in the stipulated time-frame?

We entered the Indian market in September 2005. During the last six months, we have opened 11 outlets in and around Delhi, and by the end of this financial year, there should be more than 13 outlets in place.

We expect to be in all major cities in the next three years. Our long-term plan is to have 300 outlets in the next 3-4 years. In fact, the Costa brand has been so well received in India that we are confident of even beating our target.

Costa opened 80 new stores in the UK last year, making it one store every three days. The same pattern be followed in India too.

India still remains a tea-loving country. Can Indians be tempted away from their daily cuppa?

I would like to highlight two things here. First, we do of course offer in our shops a wide selection of teas - i.e., 12 different varieties of tea and two iced teas.

Coffee is, however, a lifestyle choice and younger consumers are moving to the coffee shops to exercise their freedom of choice and to meet friends, etc.

To this point, Costa is well placed to appeal to new consumers who want to be seen in an aspirational upmarket environment with a wide choice of high quality Italian coffee and complementing food products.

India may soon see the entry of global majors like Starbucks as well. How do you plan to take on the competition?

The UK is probably the most developed coffee market in the world where Costa is the No. 1 coffee brand, not Starbucks, although they have existed for more than 10 years there.

We are a European brand and in other markets where we operate with Starbucks we sit beside them, however we remain the brand of choice. They have their customers, we have ours. If they arrive in India, it would be good for the nation's coffee market and we look forward to beating them here as in other markets.

Costa at present has 550 stores worldwide, out of which 430 are in Britain. Will India be the regional base for growth into Asia?

I think India will be a very important market for Costa. In the long run, it may even become No. 1. But, for sure, it will be among the top three-four markets across the globe. We have already set up our office in Delhi.

As our business grows, we will strengthen our own Costa team in the market to support our chosen partner and to work alongside them on key elements of the brand system, e.g., marketing.

How much of your success in Britain and worldwide is due to the fact that you are also into non-coffee beverages? What role will tea have in your Costa chains in India? Will you be offering Indian teas?

First and foremost, our brand stands for the best coffee in the world. In addition, however, we offer to our customers a broad range of food and drinks.

It's the collective offering which makes the brand what it is. This broad range of hot and cold beverages and exciting food will surely help appeal to a wide range of Indians .

How much of the coffee served in your Indian stores will be brewed from Indian beans and how much will be imported?

At the moment we will concentrate on establishing our brand in India. In the meantime we also will look at providing coffee in our Indian coffee shops which are from Indian beans, roasted in India.

But that's not our priority now. So we will continue importing coffee at present as we are an Italian coffee shop selling the finest blend of coffee, roasted ourselves, to a secret recipe and blend.