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Interrobang Season 9 Marketing Case Challenge - Cracking The Coffee Code
Interrobang Season 9 Marketing Case Challenge - Cracking The Coffee Code
August 2019
Teams will submit a case analysis/solution document comprising of no more than 6 pages
of single spaced, 12-point font (including illustrations and excluding TOC, Cover page).
The first page of the document must comprise of an executive summary of the solution
suggested by the team. The executive summary should be limited to one page only.
There is no pre-determined structure to analyse the case. Participants are free to use any
format which best illustrates and provides convincing arguments supporting their
solutions.
Wherever necessary, the participants must refer to the sources of information and data.
Case presentations will be judged based on the following criteria – the originality,
creativity and uniqueness of the idea will receive the highest weightage; the feasibility of
implementation, sustainability and scalability of the idea; its fit with ITC’s vision and the
manner in which it can leverage ITC’s strengths; the thoroughness of research, analytics
and economic logic used to defend viability and execution of the idea.
Last date for submission of case solutions is 26 August 2019. Teams must send their entries
to the email ID provided for the campus
For full details, please refer to the Interrobang Season 9 Case Challenge Brochure available
with your Campus Point of Contact or contact interrobang@itc.in.
Coffee. The one thing that means different things to different people. For some, it’s part of
their morning rituals. As someone remarked, ‘I orchestrate my morning to the tune of coffee’.
For many it is the de facto beverage of their social gatherings and meetings, especially given
the rise of the café culture in India over the past decade. Some would be asleep without it.
While many use it to keep their brains ticking over.
Historically, India has overwhelmingly been a country of tea-drinkers, but coffee drinkers are
fast catching up. Could coffee soon replace chai as India’s unofficial national drink? Mintel
research shows for instance, that India is among the world’s fastest-growing markets for
packaged coffee, expanding at a compounded annual rate of over 15% between 2012 and 2016.
And this growth in India’s coffee culture shows no sign of slowing down.
For long, South India was considered to the only market for coffee, but the fact is that in the
past three years it has been the North Indian market that has been driving the growth of coffee
in India, as new generation of aspirational young Indians discover the joys of coffee (see
below), especially when it comes to growth in the Instant Coffee market, where it is the non-
south markets that are driving the growth (See Annexure 1).
1ThisCase is developed by and is the sole property of ITC Limited. This is for academic purposes only and is not
intended to be copied or displayed or reproduced at any place outside the Campus.
Interrobang Season 9 Case Challenge
Hot as a Cup of Coffee
The coffee market in India is a battle between two large players, especially in the Instant
Coffee segment – with the South dominated by Hindustan Unilever (HUL) and non-South By
Nestlé (See Annexure 2). This dominance stems from the fact that both these companies have
strong brands that have stuck deep roots among coffee drinkers by virtue of being present in
India for over 50 years. While Nestlé’s Nescafé entered India in 1963, HUL’s Bru was launched
in 1968.
This entrenchment of these two brands (along with their variants and sub-brands) is also
largely because their consumers have become habituated with them. Coffee drinking, as with
any habit, is one that is hard to break — and amongst coffee lovers, it is harder still to get them
to change their loyalty to a brand, as this habit-driven consumption comes with its own rituals,
methods of making and most of all taste. All of this makes it hard for a new entrant into the
market to make an impact.
Perhaps the only segment that these two players do not dominate in the coffee market is the
Roast & Ground (R&G) segment, which is a fragmented market with ~300 players, most of
who are local and limited often to a single state (See Annexure 3). But even here, the only large
– and national – player of note is HUL with Bru Green Label.
ITC Sunbean
It was into this apparently unwelcoming market – yet one full of opportunity and growth for
the brand that can come up with the magical formula for success – that ITC entered into with
its own brand, Sunbean for discerning coffee lovers. As a company with an agri-business
division which is amongst India’s largest coffee exporters, and with a famed distribution
network that covers up to 80% of coffee-selling outlets, ITC is well positioned – and poised –
to establish itself as a serious player in the Indian coffee market, both in the Instant Coffee and
Roast & Ground segments.
b. North India – IC: 25% (290 crore); West – IC: 13% (320 cr.); East – IC: 13% (162
Nestlé 29%
HUL 66%
Others 5%
Others 4% 4% 3%
3. Roast and Ground (R&G) segment: A fractured market with up to 300 mostly local
players