The Coffee Giant - Cafe Coffee Day

The largest among all the coffee growers in India today is a man named V.G. Siddhartha. He was born in a traditional coffee plantation family in Chikmagalur. The family had grown coffee for generations but did not have huge ambitions-they were content with a few hundred acres under cultivation. Siddhartha,the only son of his parents,finished studying economics and wanted to see the world for himself. He told his father that he wanted to learn about the world of financial investment; he wanted to go faraway Mumbai and learn from a man named Mahendra Kampani whom he had never met. With permission from his father, young Siddhartha boarded a bus to Mumbai, where he rented a hotel room with a shared toilet.

Mumbai stunned Siddhartha - it was beyond his imagination. The next day, he went to see the man who was to become his mentor. At Kampani's high rise office, he saw people waiting for the elevator at the ground level; he had never seen one and was very self-conscious to ride one. He chose to climb the several floors instead and managed to meet Kampani. He talked himself into an apprenticeship and started working long days and late evenings under the tutelage of the famous investment manager and former president of the Bombay Stock Exchange. After nearly two years, when Siddhartha felt he had a good understanding of the world of money, he returned home to fully engage himself with the coffee business.

The coffee business was a difficult one. Estate owners found it challenging to manage alternate years of famine and glut. Siddhartha started buying the estates that were going out of business and revived them. Over time, the cultivation grew but he found himself at the mercy of international coffee bean buyers who had an upper hand in deciding the coffee bean prices. So, rather then constantly having to negotiate for better prices, he decided to start his own chain to retail coffee. He shifted from selling the beans to selling the brew. That is how Cafe Coffee Day came into being. Today, the familiar cherry red sign dots thousands of places in the country. Not only does Siddhartha sell coffee there but eatables as well because young people like to sit down and spend time over a sandwich and a piece of cake with their coffee.

This was a classic case of the power of adjacency in the market. If you sell coffee, adjacent to it is the idea of a sandwich and a bottled water. But coffee retailing to selling sandwiches is not just about the food and the espresso machines; it is about people. Siddhartha needed thousands of young people to deliver the Cafe Coffee Day experience. Towards this he opened a hospitality training institute in Chikmagalur, and another in Chennai, where he offered stipends to rural youth who could get trained for six months and then join the workforce. He thereby created thousands of jobs for people who otherwise would have found it difficult to compete in a rapidly growing but predominantly urban economy.

In 2010, Siddhartha bought out Emporio, a coffee chain in the Czech Republic. That year, he had a sales turnover of 100 million dollars, serving more than one million cups of coffee a day! This is how was made a coffee giant - Cafe Coffee Day.