BEVERAGE BATTLE

Chennai, home of Indian coffee, scoffs as Starbucks enters the market

Obsession
Made in India
Quartz india
Obsession
Made in India
Quartz india

When Starbucks opened its first coffeehouse in Chennai last month, its 50th in India, many people wondered why the chain had waited so long to come to the city. Was it because it was summoning up courage to enter the land of filter coffee?

The US chain, which has entered India in partnership with the Tata group, opened its first outlet in Mumbai in October 2012. But it took two years for Starbucks to come to Chennai, where it opened its first outlet in the Velachary area on July 10. It plans to open a second outlet soon, in the Alwarpet locality.

Chennai is famous for its ubiquitous filter coffee, a potent brew made in a cylindrical metal device with two compartments separated by a fine filter that allows water to percolate through a bed of coffee powder. The decoction that drips through into the bottom compartment is then mixed with milk and sugar to produce the famous Chennai filter coffee.

For now, youngsters are thronging the new Starbucks outlet, but filter coffee, brewed in most Chennai homes and available in low-cost eateries around the city, might yet prove to be formidable competition.

Starbucks’ representatives did not reply to specific queries about the chain’s prospects in Chennai. But because Starbucks is not a pioneer, it will not have to create a market for its style of coffeehouse: another chain has already done that.

Indeed, the first battle for coffee in Chennai took place a good 15 years ago, when the city got its first Western-style coffee house with Café Coffee Day’s first outlet in Nungambakkam in 1999. Since then, the chain has grown to 74 cafés, becoming the largest in the city.

Starbucks, therefore, not only has another competitor in Café Coffee Day but also a fellow-traveller, albeit one that got an early start.

“Chennai was always a market where consumers understood their coffee well,” said K Ramakrishnan, president of marketing for the Café Coffee Day chain. “However, by presenting the beverage in new and different variations from across the world, we were able to appeal to consumers. Moreover, our cafés also offered a space where the youth could meet, relax and hang out. That, coupled with our offerings like cappuccino and lattes, [allowed us] to attract the youth from drinking just filter coffee to including other variations.”

Further, even though Chennai has a strong filter coffee market, there is plenty of room for other players, he said. Café Coffee Day isn’t too worried about competition from Starbucks, he said, because Chennai has space for more such places.

Neighbourhood favourites

Café Coffee Day is not the only one that is blasé about competition from Starbucks. Local eateries, too, with their affordable prices, high sales and loyal clientèle, couldn’t care less about competition from a chain.

A cup of coffee costs about Rs 25 at local eateries, while prices start at Rs 75 at Café Coffee Day and Rs 120 at Starbucks.

“Coffee shops are for youngsters who want to spend some time over a cold coffee or some other drink,” said Gopal, managing director of Geetha Café, a popular place for filter coffee, which manages to sell 600 to 800 tumblers of coffee a day from five kilograms of coffee powder. “But regular coffee drinkers still come to us.”

The Mylai Karpagambal mess, one of Chennai’s oldest coffee haunts, located near the famous Kapaleshwar temple in Mylapore, sells 1,000 tumblers a day. “It is a good thing for us that more coffee shops are springing up,” said Ramadas, grandson of S Prabhudas, the founder. “Only if you eat at ten guests’ homes will you crave and come back home to your mother’s food. Also, competition motivates us to deliver our best.”

Also, the market for the two kinds of establishments were different.

“The ambience at a café is what attracts me more than what is in my cup of coffee,” said Krithika Sukumar, 27, a communications professional. “I love serene coffee shops with good music. If I want filter coffee I would rather make it at home the way I like it.”

For others, the taste is paramount. “I go to filter coffee joints because I grew up developing a taste for it, and when I go out for coffee I am focused on the taste,” said Shivakumar Sridhar, 29, technical head at Maximum Media. “Nothing satisfies my coffee urge better than authentic filter coffee. Wherever I go, it is my benchmark for taste.”

This post first appeared on Scroll.in.

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