BATTLE OF BREWS

Foreign coffee retail chains like the UK's Pret A Manger and Canada's Tim Hortons have forayed into India with big expansion plans. Should the likes of Tata-Starbucks, Cafe Coffee Day and Barista worry?

- Ashish Sinha

WHEN A THIRD OF the disposable income is generated and spent in the top-60 cities of the country, it is only natural for businesses like coffee retail chains to set shop in these places. So it did not come as a surprise when UK-based international food and coffee chain Pret A Manger (French for "ready to eat") opened two stores in Mumbai's prime locations. Quite predictably, their next destination is Delhi. Pret A Manger, best known for its freshly made food and organic coffee, has tied up with Mukesh Ambani-owned Reliance Brands (RBL).

Similarly, popular Canadian fast-food restaurant chain Tim Hortons, best known for its coffee and doughnuts, first opened in Delhi NCR in August last year. At last count, it had 16 stores in India, mostly spread across Delhi NCR, Chandigarh, Ludhiana, and Bhatinda (as Punjabi NRIs and their relatives are well-versed with Timmy's, as its popularly known). It recently entered Mumbai opening two stores there. It plans to enter Pune and other major cities soon.

Meanwhile, the incumbents in this business, Tata-Starbucks (more than 333 stores), Cafe Coffee Day (1,380-plus stores) and Barista (350-plus stores), continue to enjoy their respective dominant positioning offering coffee, food and beverages. They too have drawn up their respective expansion plans.

The coffee retail chain business is expected to expand fast in India. From the existing around 2,200 stores, the count is likely to shoot up 25-30 per cent in the next 36 months occupying more than 6 lakh sq. ft of prime retail space and attracting investments worth Rs 1,200 crore or more.

Why This Coffee Rush?