Cafe Coffee Day takes on Lavazza, unveils low-cost coffee maker Wakecup starting Rs 3,999

Cafe Coffee Day (CCD), the V.G. Siddhartha-promoted largest coffee retail chain in India, has launched its own brand of coffee maker called CoffeeDay Wakecup, targeting coffee lovers who would want to make their own brew at home.

The machine, to be available in two variants and four colours, and capable of dispensing two different flavours of coffee in 30 seconds, are priced at Rs 3,999 (semi-automatic) and Rs 4,999 (automatic) exclusive of taxes.

The machines, launched by Commerce Minister Anand Sharma on the opening day of the three-day India International Coffee Festival on Wednesday, are on display at the venue.

The coffee makers are built in China with Italian technology, while the capsules are made in India. There are, of course, single-serve machines already available in the Indian market: Lavazza's sleek portable coffee machines, branded Lavazza Blue 850, are priced at Rs 13,500.

While Lavazza's range of products aims at the premium segment of coffee lovers, Wakecup targets all sections of users with its pricing strategy.

"Customers will buy it only if they can afford it. Life, as you know, is becoming very expensive," Siddhartha had recently told Business Today.

The Coffee Day Group will use its expansive network of 1125 cafes and 900 Express outlets to market its ambitious product.

According to Venu Madhav, Chief Operating Officer of CCD, the single-serve capsule or refill is available in two flavours - Estate blend and Pure Arabica blend, priced respectively at Rs 10 and Rs 15 apiece.  

While Wakecup dispenses shots of Espresso, the machine also comes with a milk frother that will help the consumer make his own cappuccino by providing foamy topping of milk.

Madhav said CCD had enabled Indian coffee to make its presence felt at the global level. He attributed the success to having given the brand an aura of romance.

Anil Bhandari, a member of the Coffee Board and President of India Coffee Trust, which is organising IICF, called 'Wakecup' a "game changer".

"This can spread like wildfire and has the potential to reach at least 18 million middle-class households," he said. "The country has been waiting for this kind of cheap coffee making machine."

Harish Bijoor, the retail consultant, in a study that his firm carried out this July 2011 in 26 small towns in India, ranked CCD among the top five brands youngsters could recall.

"CCD has an opportunity to brand colonise smaller towns where the aspiration lies," he says. This machine will take CCD to homes in small towns where an outlet may not be viable.

CCD revenues are expected to top Rs 1,200 crore in 2011-12. The chain makes about 10 to 12 per cent of cash profit.

The fastest-growing part of the global coffee industry today is the single-serving coffee made at home, whose worldwide sales is delivering an average growth of around 30 per cent a year, compared with 6 per cent for drip.

Nespresso has made Nestle the leading seller of coffee in Europe. Nespresso is now Nestle's fastest-growing brand, with annual growth better than 30 per cent per annum from 2005-2010. Nespresso enjoys revenues of $3 billion annually and 10 million refills daily. Time magazine reports that Nestle's margin in Nespresso is at about 85 per cent, compared with 40 per cent to 50 per cent for regular drip-coffee brands.

The fourth edition of India International Coffee Festival is the first outside Bengaluru and aims to increase coffee consumption, particularly in north India. The potential is enormous: despite its popularity in south India, coffee's per capita consumption in the country is still a mere 90 grams annually, against 6 kg in United States.

Coffee Board Chairman Jawaid Akthar said at the event that India had emerged as a major producer of coffee despite the climate not being too conducive for coffee plantation. The country has even produced an indigenous brand of coffee, Monsooned Coffee, registered as a Geographical Indicator product. He noted that increased coffee consumption in the country would also help the one million odd people employed by the industry, of which 5,00,000 work on coffee plantations.