Mumbai: The iconic India Coffee House, an eight decade-old coffee chain run by the Coffee Board of India, is looking at bringing on board private sector food and beverage retailers as master franchisees, to revive operations and expand its footprint.
The coffee chain, with a presence in upscale areas like Chittaranjan Avenue in Kolkata and Parliament Street in New Delhi, once counted among its regulars intellectuals such as Satyajit Ray, Amartya Sen and a young Buddhadeb Bhattacharjee. This was in India Coffee House’s heyday.
However, over the past four decades, the chain has become a shadow of its former self. There are now about a dozen India Coffee House outlets, said a pre-bid consultation and request-for-information document sent to coffee retailers and marketers to attend a meeting held on 31 January. Close to 120 company representatives attended the meeting, which included retailers Café Coffee Day and Hindustan Unilever Ltd, the maker of Bru coffee and Lipton tea, said a person aware of the development.
“As a policy, we do not comment on market speculation,” said an HUL spokesperson.
In its document, the Coffee Board has laid out its role and plans for opening 75 franchise branches over the next three years. The Coffee Board will identify and get locations at low rentals in high footfall areas such as public institutions and private sector establishments across India. There will be two formats—air-conditioned and non air-conditioned—and, depending on the type the licensing fees, security deposit and interiors would differ.
The Coffee Board will also promote the initiative by building awareness through a broad-based, countrywide ‘India Coffee’ campaign, which will highlight the positioning and offerings of India Coffee House outlets. The outlets will promote fine Indian coffees and serve coffee-based beverages and food at affordable prices in a hygienic environment.
The document is a precursor to the tender, which will be floated in March, said the person cited above on condition of anonymity. Mint has a copy of the document.
To qualify for the tender, firms need to have a business experience of at least three years and a net worth of at least Rs10 crore. Additionally, prior experience in operating various food service formats such as fine dining restaurants, casual dining restaurants, cafés or bistros, quick service restaurants, food and beverage kiosks or carts is a necessity. Franchisees would have to invest in setting up store infrastructure and undertaking commercial operations.
Firms were invited to share their views prior to the Coffee Board floating its tender.
“The brand evokes a lot of nostalgia and it will be interesting to see the government revive it,” said Harminder Sahni, founder and managing director, Wazir Advisors Pvt. Ltd, a consultancy.
However, revival may not be easy. Close to two-thirds of India’s population is below the age of 35. “These people have no memory of India Coffee House. The partnership will have to go beyond good locations and nostalgia to win customers,” said Anil Talreja, partner at global consultancy and audit firm Deloitte Haskins and Sells LLP.
The coffee retail market is estimated to be a Rs1,864 crore market with nearly 3,000 active cafes, according to the National Restaurant Association of India’s Food Service Report 2016.
The cafes are expected to have a category average growth rate of 9% between 2016 and 2021.
Some of the leading retail chains include Cafe Coffee Day, Costa Coffee and Starbucks.
While India Coffee House is owned by the Coffee Board, there is an equally well known Indian Coffee House which is a workers cooperative owned by the Indian Coffee Workers’ Cooperative Society Ltd. It was also established prior to Independence and people often get confused between the two chains due to their similar sounding names and heritage.livemint