Cafe Coffee Day

    The tagline A lot can happen over coffee” became everyone’s favourite and provided them with an ambience to create a ton of memories. From long drives to fixing a marriage, Café Coffee Day (“CCD”) was everyone’s first choice. The first CCD outlet was launched in Bengaluru in 1996 and the chain has now grown manifold across the globe assuring that customers have a great time while sipping a good cup of coffee. CCD has always worked with three principles: affordable coffee, good ambience and quality service. 

    VG Siddhartha, who gave India its first ever coffee chain, was born to a family of coffee plantation owners in Chikmagalur, Karnataka. He began his career as an investment banker in the 1980s, and soon started to invest in the stock market himself. Mr. Siddhartha’s first break came after 1991 when the Indian economy was being liberalized, lifting restrictions on the trade of coffee. This opened for him the way to start a coffee beans business in the year 1993. 

    Within the span of two years, his company became one of the largest exporters of coffee from India. But this was not the end of his ambition. He knew he had to do something new and different if he wanted to remain at the zenith of the coffee business and, this is how Café Coffee Day was born. 

    The café, with its greatest utility of internet access, instantly became a major hit among the youth and corporate executives and since then, CCD has been everyone’s go-to place. CCD has its outlet in every nook and corner of India. From Kashmir to KanyaKumari, you can sip an amazingly brewed cup of coffee at CCD anywhere. The company also owes the first mover advantage to its success, before the arrival of international chains in India including Starbucks and Costa Coffee.

    Subsequently, the arrival of international coffee chains such as Starbucks and Costa Coffee stood as a great competition for homegrown business Café Coffee Day in the year 2012. This led to a downfall in expansion of the business and as a result, in the year 2015, Mr. Siddhartha made the Company public by listing it on the Indian Stock Exchange. Unfortunately, the response was not on a positive side hence, the company’s share price fell by 18% on the very first day of trading.

    Addressing this, Shubhranshu Pani of JLL, a real estate firm that advises Café Coffee Day, made a statement to BBC saying “They (CCD) realized that they had to change their strategy to fight competition”. To everyone’s surprise, the strategy worked for Café Coffee Day and it made profits consecutively for three financial years. However, the major obstacle of rising debt continued to hurt the growth of Café Coffee Day business. 

    Mr. Siddhartha sold 20.41% of his investment to Mindtree, an Indian IT firm, for more than $450m to reduce the company’s borrowings. The reports also suggest that Mr. Siddhartha was in conversation with investors such as Coca-Cola to sell a portion of his stake in Café Coffee Day, however, CCD and Coca Cola, both, denied such reports.

    Eventually, the shares started falling sharply in value and, ever since the news of Mr. Siddhartha’s disappearance was first announced, the share price has fallen by more than 35%. Many believe that Café Coffee Day could have had a bright future if the dealings were executed properly, which is why the demise of Mr. Siddhartha left everyone in a huge shock.

    Latest articles

    Related articles


    Leave a reply

    Please enter your comment!
    Please enter your name here