’We’ll make them drink kaapi’

In response to International coffee chain Starbucks' tie-up with Tata Coffee, Cafe Coffee Day's marketing head, Ramakrishna exudes confidence in being able to take them on in the Indian

'We'll make them drink kaapi'

In response to International coffee chain Starbucks' tie-up with Tata Coffee, Cafe Coffee Day's marketing head, Ramakrishna exudes confidence in being able to take them on in the Indian

What does a native of Chikamagalur do when a Jew from New York tries selling coffee in his backyard?

The native in this case happens to be V G Siddhartha Hegde, (son-in-law of External Affairs Minister S M Krishna), who grew up amidst his family's 400-acre coffee plantation in Chikamagalur and went on to become the founder-owner of Cafe Coffee Day.

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Cafe Coffee Day founder V G Siddhartha and Starbucks founder Howard Schultz.

The New York Jew happens to be Howard Schultz, the founder-owner CEO of Starbucks, the international chain of coffee shops.

The international chain of coffee shops will soon launch in India, in association with Tata Coffee, where Cafe Coffee Day is a market leader.

Ironically, Siddhartha set up what was called Coffee Day Cyber Cafe in 1996, after being inspired by Howard Schultz's autobiography titled Pour Your Heart Into It: How Starbucks Built A Company One Cup at a Time!

Later, he rebranded it to Cafe Coffee Day, which has more than 1,030 coffee shops in 175 cities and towns across India, and it is still expanding, with its suggestive slogan "A lot can happen over coffee".
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Besides, the company has 1,000 kiosks, branded Coffee Day Express. It has 15,000 vending machines in some 4,000 companies, and also sells roasted filter coffee powder.

He always had the early mover's advantage and successfully faced competition from the Barista chain of coffee shops. So what's he got up his sleeve now that he has to face competition from Howard Schultz's Starbucks?

MiD DAY could not talk to the reclusive Siddhartha himself to find out, but managed to talk to 'Ramki' Ramakrishna, Cafe Coffee Day's Head of Marketing in Bangalore, where the company is headquartered at Vittal Mallya Road.

"We welcome competition because the customer will benefit. We will continue to work hard. We know that Starbucks is an iconic brand. Let them come, we'll make them drink kaapi (native Southspeak for coffee)," said Ramakrishna.

Starbucks is the largest coffeehouse company in the world, with over 16,858 stores in 50 countries, including over 11,000 in the United States, over 1000 in Canada, and over 700 in the UK.

The company also owns the Starbucks Entertainment division and its Hear Music brand, through which the company markets books, music, and film.

It even has a partnership with Apple's iTunes to sell music as part of the coffeehouse experience. Besides, it has got Tata Coffee Ltd to back it up in India.

According to fast moving consumer goods (FMCG) sector analysts, what Siddhartha and Ramki have on their side is the first mover's advantage.

Despite its sourcing arrangement with Tata Coffee Ltd, it is not yet known if Starbucks will be able to source coffee beans cheaper than Cafe Coffee Day.

It is the same in Europe as well while rivals have to spend 12 Euros (Rs 768) for 1 kg of coffee, Cafe Coffee Day sources it from its plantations for merely two euros (Rs 128).
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That is the kind of cost advantage widely expected when Starbucks begins to brew it in Siddhartha's backyard, as the coffee brand wars are all set to begin.