"Conversation is the main product at Café Coffee Day": K Ramakrishnan, CCD

Was there life before Café Coffee Day (CCD)? Many young Indians wouldn't even know that because CCD is ubiquitous with 1,497 outlets. It created the coffee shop culture and has been around for 17 years: it celebrated its birthday last month. afaqs! spoke to K Ramakrishnan, CCD's President, Marketing, on the chain's journey so far and where it is heading.

Edited Excerpts

We address the youth, so change is a continuous process - be it the menu or the look or the music. People look for change even if they keep having the same thing at the café. If we don't give them that, they will go elsewhere looking for it.

Many Indians, especially the youth, have grown up with CCD. Once they grow up, they feel, 'I love the brand but what's new in it for me?' To give them that something extra, we brought the Lounge two years ago, beginning with Bengaluru. Today, we have about 47 lounges. There are clear differences between a cafe and a lounge: the colours are milder, the music is softer and the density of people is lower. The brewing also differs plus the cuisine is much wider.

A Square is a unique format; it's is a celebration of coffee. Usually coffees are blended but here we have coffees from a single origin such as, say, Guatemala Coffee. Currently, we have just two of them, one each in Bengaluru and Delhi.

Coffee Day Express is however a kiosk like outlet.

A cafe size varies from 450-1,300 sq ft whereas a lounge starts at 900 sq ft and a Square begins at 1,200 sq ft. We don't have a specific target for the number of Lounges and Squares but overall we are targeting 2,000 outlets by the end of 2015, which means 503 more to go in 29 months!

By the time the above target is met, we expect to be present in another 100 towns in addition to the existing 200. Having said that, we think there is still scope in the big cities too.

If that was the case, there would be one cafe on Linking road, one in Colaba and one in Lokhandwala, that's it. But the need to have a conversation is irrespective of a location, you need it everywhere, at arm's length.

We believe in aggressive expansion; that will continue. We believe in the strategy of clusters. On a busy road, you may not want to cross it so it's better to have cafes on both sides of the road. The aim of clustering is to capture as many customers as we possible.

We believe that our biggest medium is our Café but when we use it as a medium, we target the people who make repeat visits. If we have to grow the market, we needed to tap people for first time walk-ins.

A report about two years ago said that even in SEC AB, in the top ten towns, in the addressable age group of 17-35, only 47 per cent of the people go to cafes. The other 53 per cent have various perceptions about hanging out there. There are price perceptions; some think it's a place for interviews while others don't go to cafes because they don't have a girlfriend. If you correct these perceptions, you address the other 53 per cent. That's the reason we tried to reach them through other media.

It's too early to say whether the aim of increasing the market size has been achieved or not. If two months was all it took, every brand would have done it. Advertising is just one part of the process: change of menu, change of look and feel and word of mouth, all of it works together.

How do you say that only 80,000 are active? It's like this: engagement for each post is a smaller number like you mentioned, but you have to calculate it over a period of, say, month. In that sense, it is in excess of 55 per cent for the Cafe Coffee Day page on Facebook.

We are there on Twitter, Pinterest, Facebook, Foursquare and Instagram. In India, almost all the youth brands have a higher following on Facebook than on Twitter, so do we.

Expectations change continuously. If the customer gets one extra thing (be it a smile from the person who serves the coffee) in a few consecutive visits, that gets converted to into expectation. Fortunately or unfortunately, the audience profile has remained more or the same as far as the cafe is concerned. The lounge has a little more working population than teenagers.

The menus are standardised. The first task is to be as consistent as we can. The experience that a customer gets in one cafe in one city is similar to that in any other cafe in another city.

We have experimented in the past with what we used to call a glocal menu. Now, we don't have it. It's not about whether it worked for us. While consolidating our food-vending services, we centralised it so the focus is on being more consistent.

In future, we might change it but even if we do the local flavour won't be more than 5 per cent.

At Cafe Coffee Day, conversation is the main product and everything else surrounds it. People go to a Cafe Coffee Day to have a conversation. You incidentally have food and coffee. Some of our cafes are wifi-enabled. Then, we have cafe radio which talks about the music that people listen to. So, fundamentally, we are a place to hang out and where people can have their conversations, which are surrounded by food and beverage, merchandise and music.

The challenge for retail is always the same: finding the right location and the right people to work. Consistency and day-part walk-ins are a challenge. For example, when you start a cafe, you invest in the space but it is crowded only for certain hours in a day. How do you make this uniform?

We're still experimenting with how to solve this. At some locations, we talk about happy hours; at some others, it's about offering a free beverage to build the lunch crowd.

To my mind, everything is a competition for my brand, even IPL - because if someone is watching a match, he or she is not in our outlet. But we try to reach at any place where the need is going to arise. Whenever a new locality comes up, CCD is the first retailer present.