Review of Management, Vol. 10, No.

3-4, December 2020

Review of Management
Vol. 10 No. 3-4, December 2020 pp. 4-9
ISSN: 2231-0487

Indian Coffee House Delhi at the Crossroads: A Case Study

Srirang K Jha* and Himanshu Pandey**

ABSTRACT
Established in 1957, Indian Coffee House Delhi is managed by Indian Coffee Worker’s
Cooperative Society Ltd. with a motto of ‘no-profit–no-loss’. Over a period, it has attained an
iconic stature. However, now the organization is languishing in its own pristine glory. Revenue
has declined so has the number of frequent visitors. At the same time, the Indian Coffee
House has not changed. Rather, its service quality and ambience have deteriorated beyond
repair. Morale of the employees of the Indian Coffee House, so called owners, is touching the
lowest ebb. However, there is still hope that the fortune of the Indian Coffee House can be
turned around by reorienting its management philosophy and strategy. This case study argues
that the cooperatives can also be managed as corporations to the best advantage of their
members/owners.

KEYWORDS: Indian Coffee House, Indian Coffee Worker’s Cooperative Society Ltd., New
Delhi, India

ABOUT THE ORGANIZATION

Indian Coffee House in New Delhi’s Connaught Place was established in 1957. Managed by
Indian Coffee Worker’s Cooperative Society Ltd., it has attained an iconic stature which goes

*Associate Professor & Head, General Management Area, Apeejay School of Management,
New Delhi E-mail: jha.srirang@gmail.com
**Student, Post Graduate Diploma in Management Program (2019-21 batch), Apeejay School

of Management, New Delhi

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beyond the run-of-the-mill restaurant chains. The waiters at the Indian Coffee House have a
unique sense of pride which comes from inimitable legacy of the organization. There is hardly
any other restaurant chain in India which can claim to have an elite guest list including nine
prime ministers. It happened to be a place where ideas were proposed and turned down, and
debates continued over endless cups of affordable coffee and cutlets (Dutta, 2016). Culture
of open debates posed threat to the powers that be, during emergency. Top officials of the
government during emergency had an inkling that conspiracies were being hatched over non-
descript mugs of coffee at the Indian Coffee House (Jha, 2016). No wonder, Indian Coffee
House was demolished during emergency in 1976 but was rebuilt later at its current location
i.e., top floor of Mohan Singh Place in Connaught Place (Jha, 2016).

Even today, Indian Coffee House hosts a good number of young and old visitors from varied
fields like art, social work, politics, among others. It has emerged as a favourite joint for the
college goers who find the place imbued with ‘old world charm’ and ‘pocket-friendliness’
(Dutta, 2016). In the pre-Covid-19 phase, Indian Coffee House used to have about 800 visitors
(Dutta, 2016). Number of visitors has declined in the wake of Covid-91 pandemic.

[Photo Courtesy: The Hindu: https://www.thehindu.com/news/cities/Delhi/delhis-iconic-

indian-coffee-house-battles-massive-slump-in-business-unable-to-pay-salaries-for-
months/article32534060.ece]

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ISSUES AND CHALLENGES

Indian Coffee House has been hit hard by the Covid-19 pandemic. According to a report
published in The Hindu, Delhi branch of Indian Coffee House has witnessed 70% decline in
sales revenue whereas other branches suffered losses to the tune of 60% (Babu, 2020).
Monthly rental of the Connaught Place based Indian Coffee House outlet is INR 1.19 Lakh. The
organization owes the rent to New Delhi Municipal Council. However, due to lockdown and
concomitant loss of revenue, the rental dues have piled up significantly. It is becoming almost
impossible for the management of Indian Coffee House to pay rent as well as salaries to the
staff in the wake of dwindling income. Before the pandemic, Indian Coffee House used to
generate a revenue up to INR 1.08-1.44 crore in a year which has come down heavily,
threatening the very survival of the organization (Babu, 2020).

However, the things started deteriorating much before the onslaught of the Covid-19
pandemic. Indian Coffee House lost its pristine charm slowly but gradually over the last 30
years. Once upon a time, it used to be a hub of intellectual discourse, an affordable meeting
ground for the social activists and the political leaders of all hues. Unfortunately, now only a
smaller number of such visitors can be spotted at the Indian Coffee House. There are only a
few die-hard enthusiasts from the olden times who make sure that the kitchen of the Indian
Coffee House keeps running without fail. Besides, there are college students who still prefer
to come here, primarily because it is the most affordable hang-out at Connaught Place. Setting
of the place itself has been a great attraction for most of the coffee lovers (Zachariah, 2015).

Ambience, which used to be the centre of attraction earlier, has somehow been lost. The
restaurant appears to be dilapidated. Furniture at the Indian Coffee House is in a deplorable
condition. Even hygiene and cleanliness both in the dining hall as well as kitchen are not okay.
The number of staff has been reduced drastically which clearly shows on the deteriorating
quality of services. The guests have to wait for long to be served. In order to keep the prices
low, Indian Coffee House has the same old menu with no variation in the last so many years.

More than quality, the management is quantity-conscious. It is funny but true that the kitchen
staff has to comply with norms related to quantity of inputs and outputs. Failure to comply
with the norms results in admonishment from the supervisors. Here is the sample of the

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norms: “One kilo of rice and 250 grams of urad dal without husk gives 35 dosas. Similarly, one
kilo of potato with half a kilo of onions gives masala for 18 dosas. One kilo of rice and half
kilomof urad dal makes 50 idlis, and one kilo of urad dal gives about 50-55 vadas”
(Balasubramaniam, 2017). Any variation from the norms is construed as failure of the kitchen
staff. In case the quantity increases, it is seen as wasteful and if it is used less, concomitant
assumption is that the customer is short-changed (Balasubramaniam, 2017). In reality,
complying with such strict norms is quite challenging when everything is done by human
hands.

Moreover, morale of the staff of the Indian Coffee House is touching the lowest ebb. They
have not received their salaries for months due to financial constraints faced by the
organization. No one has any clue about revitalizing the Indian Coffee House and re-energising
the staff so that the old glory of the place can be regained. While all the employees of Indian
Coffee House are also its owners and they elect the management committee, they have
largely failed to keep pace with changing expectations of the stakeholders, especially the
coffee-loving youngsters who are ready to pay a premium for offerings which are of
significantly high quality, varied and served quickly. The likes of Barista, Café Coffee Day,
Starbucks are thus gaining ground in Delhi. Given the glorious legacy, the Indian Coffee House
can once again reclaim the lost grounds and redefine the exciting culture around a cup of
coffee. However, how to turn around India Coffee House without compromising on its core
values is a big question.

SWOT ANALYSIS
Strengths Weaknesses
• Legacy • Low morale of the employees
• Brand name • Dwindling income
• Affordability • Limited menu
• Ambience • Poor service quality
• Location • Poor hygiene and cleanliness
• Poor quality of furniture
• Less number of employees

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Opportunities Threats
• Reviving the old coffee house culture • New entrants in the coffee house space
with fresh outlook like Barista, Café Coffee Day, Starbucks,
• Modernising the coffee house with Chaayos, etc.
expanded offerings in line with current
tastes and demands
• Run the cooperative as a corporation
with profit motive so that its owners can
earn better as a shareholder
• Attracting the young coffee lovers
through innovative ways like open mic
• Set up new outlets at the university
campuses

THE WAY FORWARD

Since its inception, the Indian Coffee House has been managed by a cooperative society with
a motto of ‘no-profit–no-loss’. This has been touted as biggest strength of the organization.
Unfortunately, the biggest strength of Indian Coffee House has turned out to be its greatest
weakness. When the organizations work with a motto of ‘no-profit–no-loss’ they eventually
lose competitiveness. There is hardly any urge to augment profitability. There is hardly any
drive amongst the employees to compete in the market. There is hardly any desire to innovate
and improvise the quality of services and other offerings. Running a cooperative does not
mean running a charitable organization. ‘no-profit–no-loss’ may be a right idiom for an NGO,
but certainly not for a cooperative society. Cooperative societies are established to carry out
business and make profits and distribute the same equitably among all its members.

The Indian Coffee House flourished when there were no competitors in the market. Now the
only way to revitalize the Indian Coffee House is to reorient its management philosophy
without changing its structure. There are a number of cooperative societies which are
operating profitably and taking good care of all their members. If the Indian Coffee House will
focus on making profits, they will have to set their house in order and be more responsive to

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the guests in order to increase revenue. They will have to innovate. They will have to recreate
the ambience with enviable quality of food and services. They will have to look at strategies
of their competitors and see what can be done differently rather than just sulking in the legacy
that Indian Coffee House holds close to its heart.

REFERENCES
Babu, N. M. (2020). Delhi’s iconic Indian Coffee House battles massive slump in business,
unable to pay salaries for months. The Hindu:
https://www.thehindu.com/news/cities/Delhi/delhis-iconic-indian-coffee-house-battles-
massive-slump-in-business-unable-to-pay-salaries-for-months/article32534060.ece
Balasubramaniam, C. (2017). Serving a legacy. The Hindu: https://www.thehindu.com/life-
and-style/food/serving-a-legacy/article19682567.ece
Dutta, S. (2016). Indian Coffee House: A former haunt of politicians and writers, thronged by
loyal customers today. The Indian Express:
https://indianexpress.com/article/cities/delhi/indian-coffee-house-delhi-2888772/
Jha, M. (2016). Once the hub of intellectuals, this famous coffee house has in Delhi has lost
its flavours. Youth ki Awaaz: https://www.youthkiawaaz.com/2016/06/indian-coffee-
house-new-delhi/
Zacharia, P. (2015). Indian Coffee House: The ambience is free. Mint:
https://www.livemint.com/Sundayapp/fGuferX5qDy3uuktAl25EI/Indian-Coffee-House-The-
ambience-is-free.html