‘A lot can happen over a cup of coffee’: How CCD became India’s largest coffee chain

Team Udayavani, Jul 25, 2021, 12:11 PM IST

Source: hotelmaharaja.com

VG Siddhartha, born in Chikkamagaluru district of Karnataka, comes from a family that has been in the business of coffee plantations for around 140 years. Siddhartha is credited with India’s largest coffee empire, Cafe Coffee Day.

After graduating from Mangalore University, he joined JM Financial Limited in 1983-1984 in Mumbai as a management trainee/intern in Portfolio Management and securities trading on the Indian Stock Market under Vice-Chairman Mahendra Kampani.

Two years later, he returned to Bangalore, where he was given money to start a business of his choice. Siddhartha bought a stock market card for Rs 30,000, along with a company called Sivan Securities, which was renamed in 2000 as Way2wealth Securities Ltd. Its venture capital division came to be known as Global Technology Ventures (GTV).

He was a full-time proprietary investor in the stock market and owner of 10,000 acres of coffee farms by 1985.

In the 90s when coffee trading was liberalised, he doubled the money he had invested in the plantations within a year. In 1993, Amalgamated Bean Coffee Trading Company Ltd (ABCTCL) was born. The company focused on coffee exports. ABCTCL would trade 20,000 tonnes and within two years the company became the second-largest exporter from India.

The first CCD retail outlet was launched in Bengaluru in 1996,  with the tagline ‘A lot can happen over a cup of coffee’. The outlet was meant for customers to sit and surf the internet while enjoying their coffee; hence the name ‘Cafe Coffee Day. Here coffee and an hour of Internet surfing cost Rs 100.

In the over two decades since, CCD has become the largest coffee retailer in India with over 1,700 outlets across the country. To put that in perspective, its nearest rival, Barista, has 220 stores. Tata Starbucks has just 146 stores as of 2019.

CCD is India’s largest coffee chain and is owned by Coffee Day Global which is a subsidiary of Coffee Day Enterprises. It has around 1,700 cafes, around 48,000 vending machines, 532 kiosks and 403 ground coffee selling outlets.

CCD stands apart from competitors such as Starbucks, Barista and Costa Coffee, is its focus on Tier 2 cities. While its competitors catered to the economically affluent top 20 percent of Indian consumers in the metros, CCD strategically sought to reach a wider economic class.

CCD achieved its low pricing point was due to the fact it grows its own coffee. The Chikkamagaluru-based business grows its own coffee in over 20,000 acres of land and is the largest producer of Arabica coffee beans in Asia.

Apart from CCD,  VG Siddhartha has founded a hospitality chain which runs a seven-star resort Serai and Cicada.

Controversy

VG Siddhartha was accused of tax evasion in 2017. Income tax raids were conducted at over 20 locations in Mumbai, Bengaluru, Chennai and Chikmagalur by senior officers of Income Tax Department of Karnataka and Goa regions.