Cafe bar culture has been on an upswing in the country. But in-home coffee consumption still has not been as big as marketers would have liked to. However, over the past few months, coffee marketers (in-house coffee consumption) like Nescafe and Bru have got aggressive and been trying to cash-in on the trend to make coffee a more regular drink consumed at home.
According to market reports, in-home coffee consumption in India is as low as 15 per cent compared to tea penetration which is about 96 per cent. However, in southern part of the country, coffee penetration is higher (about 4 per cent). In-home coffee in India is a two player dominated market – Nestle’s Nescafe and HUL’s Bru. According to KPMG, Nescafe leads the market with 33.6 per cent share, while Bru corners 31 per cent share of the pie.
The youth connection and the social quotient
Experts say that coffee in India (except the southern markets) is not a habitual drink but is consumed more like a lifestyle product and the out-of-home consumption of coffee is high. Cafe Bar’s have become a place to socialise and hence coffee is quite synonymous to socialising now. Coffee marketers like Nescafe and Bru are also trying to harp on the same socialising aspect of coffee to promote in-house coffee consumption.
Abraham Koshy, Professor of Marketing, Indian Institute of Management- Ahmedabad says, “Cafe bars have gradually made coffee a cool drink to have, especially for the young. Now marketers like Nescafe and Bru are trying to cash-in on that trend.”
And that’s why the key coffee marketers are targeting youth and have roped in Bollywood celebs to entice the young population to take up coffee consumption at home. This shows how how companies are relying on the youth consumers drive the growth of in-home coffee consumption.
Anand Ramanathan, Associate Director, KPMG Advisory doesnâ€™t think that Nescafe and Bru cater only to the youth market. â€œI think they cater to a mass market. But yes, in terms of positioning, both the brands have been trying to capture the youth space. Nescafe in the past some time has been coming up with very selective youthful targeting,” he says.
Anand is referring to Nescafe’s ‘Know your neighbour’ and now ‘Bring out the best in you’ campaigns that positions coffee as a social conversation enabler among the young generation. Nescafe has youth icons like Deepika Padukone and Purab Kohli and its campaigns harp on the socialising aspect of coffee. Pete Blackshaw, Global Head of Digital & Social Media, Nestle India, shares, “Because of the cafe culture getting popular, drinking coffee at home was no longer a cool thing to do. We wanted to get back into the life of the youth and that’s why we started with ‘Know your Neighbour campaign’ in 2010.”
HUL’s Bru (which is strong in southern market but not so popular in the rest of the country) has also gone very aggressive in the last one year. The brand has roped Priyanka Chopra and Shahid Kapoor as endorsers. Bru’s positioning is â€œCoffee livening-up every moment by stimulating conversationâ€, which is again harping on the social enabler role of coffee. In a more recent effort, HUL’s Bru Gold greeted The Times of Indiaâ€™s readers on Sunday morning with the â€˜smell of coffeeâ€™. The half-page ad of â€˜Bru Goldâ€™ coffee carried an innovation which gave readers a strong aroma of coffee with complementary visuals.
While youth is a key audience, social media is becoming a strong medium for coffee marketers to engage these consumers. Both Nestle and Bru are aggressively utilising the medium to engage the youth.
Marketers are doing all this, and more to lure consumers to have coffee more often at home.
New consumers through trials and variety
Since the penetration of in-home coffee is still low in India, marketers are trying to push this through various means. Nescafe launched its single cup ‘My First Cup’ to push trials. Koshy feels, “Single person consumption packs are very important for this market as it encourages trials and encourages coffee drinking among non-users. Since the price is low trials go high among non-users.
HUL’s Bru on the other hand has been trying to capture the market through segmentation and launching different products for each segment. The brand is capturing pure coffee lovers with Bru Gold, high end consumers through exotica range and Bru Lite for consumers who don’t prefer strong coffee.
Arun Srinivas, General Manager, Beverages, HUL, says, â€œIndian coffee connoisseurs actively look out for international blends for the perfect aroma and taste. The Bru Exotica range of international freeze dried coffees, marks our entry into the premium coffee segment. With Bru Exotica, our endeavour is to offer the worldâ€™s finest coffee experiences, best suited for the Indian taste buds.”
Koshy says, “Both Bru and Nescafe are adding variety and giving excitement to the category.”
With all these efforts, coffee marketers are trying to make coffee as a cool drink and inculcate coffee drinking habit amongst the youth, which anyways goes to the cafe’s for coffee. They are tapping consumers who anyways have coffee at cafe’s and making them have coffee at home also. At the same time, getting non-consumers also to start consuming coffee is another way these marketers are looking at expanding the market. However, it won’t be an easy task for these coffee marketers to spread the coffee aroma in Indian homes, with tea still dominating Indian in-house beverage consumption and added notion of tea being healthier than coffee. Marketers need to work on dealing these perceptions too if they want coffee to rule India homes.