In 2023, CCL Products (India) Ltd, whose flagship product is Continental Coffee, acquired the British coffee brand, Percol to tap into the country’s evolving beverage landscape and elevate the premium coffee experience across India. This marks a strategic shift toward building a high-margin branded portfolio and is a pivotal step in CCL’s strategy to move up the value chain, transitioning from a B2B leader to a B2C player.
Recently, the coffee manufacturer launched the premium brand Percol in three curated freeze-dried instant coffees — Intenzo, Da Essenza, and Espresso Noir — to elevate the at-home coffee experience. In addition to Percol, CCL also acquired brands such as Rocket Fuel, Plantation Wharf, The London Blend, Perk Up, and Percol Fusion from Food Brands Group, a subsidiary of Löfbergs Coffee Group. According to Redseer Strategy Consultants, the premium instant coffee segment (priced above ?200) represented 46% of the market in 2023 and is expected to surge to 55–60% by 2028, growing at a robust CAGR of 20–25%.
Commenting on the acquisition Raja Chakraborty, Chief Marketing Officer, Continental Coffee says, “Our acquisition is in line with our vision and our goal of becoming not just a pan-India player, but also take our consumer brands into international markets. Coming to Percol, the brand aligns with our vision and is a purposeful brand.”
A look at Percol’s history shows that the brand was built on three fundamentals – it should be good for the coffee growers, the planet as well as for the consumer in taste and quality. Percol was also among the early brands to be certified by Rainforest Alliance and Fairtrade.
Tapping Into Cultural Insights
A research was undertaken by CCL Products was to understand consumer behavior in South and Non-South markets. A key insight and difference that emerged was that coffee was seen as a lifestyle product in markets beyond South where consumers drank tea on a day-to-day basis but would serve coffee to guests.
Chakraborty explains, “Coffee has a very different role in the consumer's life in Northern and Western markets compared to the Southern markets. Consumers in the Northern markets consume premium products and premium SKUs. Our research showed that this trend is being driven by e-commerce and is slowly percolating down to modern trade, i.e, premium consumer households and premium channels is driving this trend.”
He continues, “Coffee in e-commerce is growing at almost 4.5x. This is driven by new brands and the premium category. As per our understanding and research, the premium category is contributing to 10% to 15% of the category. It is the fastest growing category and it will become bigger. The entire growth of premium category is coming from Non-South markets and that’s why we are entering into the premium segment. Quick commerce is growing faster than e-commerce and the premium segment of coffee is growing faster than the mid-premium and economy segment in quick commerce compared to e-commerce.”
Another difference between South and the rest of India was in the taste profile. In the South people prefer to drink chicory coffee which has a distinctive taste in terms of strength, the coffee is slightly thicker, and its taste profile and flavor is absolutely different than if you drink a pure coffee, which is milder and preferred elsewhere in the country. Chakraborty says, “The taste preferences, consumer behaviour are very different. Consumers outside South are more experimentative and open to try out newer products and formats in coffee compared to the South. This opens up in the North and West where we can target consumers through product innovation. This is the driver of the category, and a great opportunity for all players to be in and grow the category.”
With Percol positioned as a crafted premium product and coffee penetration low in Non-South markets, the strategy is top-down with the focus on premium consumers in metros, mini-metros and e-commerce, quick commerce and modern trade stores the distribution channel. Looking at the pricing, 100 gm of Percol retails at Rs 850.
He says, “With Percol, we are bringing a better quality, superior coffee to India and the consumer will get a far greater experience when they sip the coffee. We are starting with instant coffee but our product portfolio will continue to expand with a lot of innovative products. Our product strategy is built around premium coffee created with superior beans and advanced technologies. We will bring in new innovative formats to consumers, and our purpose as a brand is to constantly evolve and upgrade the consumer habits in India. As a brand, Percol is going to be a premium experiential brand.”
Looking at the promotion and communication, the focus is on Digital, specifically performance marketing, and experiential marketing. This is backed by retail media as e-commerce and quick commerce being the primary channel to generate awareness and conversion. Currently, with the brand at the launch phase, top-of-the-funnel spends take precedence over bottom-of-the-funnel. Chakraborty says, “Our focus is on top-of-the-line, i.e. building awareness and consumer engagement. Currently, our spends will be equal between retail media and experiential. Once the brand starts gaining traction and greater consideration then retail media will take precedence over other media.”
Percol is betting big on experiential right from the time the consumer first experiences the product, and provides an unboxing experience with the bottle placed in a beautiful carton to elevate the first experience with the brand. He adds, “Experience starts with how you experience the product. That’s why, we say that unboxing Percol is an experience. At every touch point, we will ensure that there is experience with Percol including in our communication and media strategy.”
With the coffee and café culture growing in India, Chakraborty reiterates that CCL sees coffee as a world of opportunities given that the consumer is evolving and inquisitive. He adds, “The explosion of coffee shops has expanded consumers’ knowledge and their aspirational connection with the category. It opens up a world of opportunities for brand building. We will be looking at newer ways to engage consumers and are keen not to do marketing the traditional way.”
The Continental Portfolio
Commenting at CCL Products (India) Ltd’s FMCG business, Chakraborty says, “Continental Coffee has done extremely well in last two years and we have been growing upwards of 40 to 45% CAGR and we are confident about our growth momentum. While the company is concentrated in the South, it is now present across India with the current focus on larger metros, and also non-metros and smaller towns in other markets beyond South India.”
Looking at the brand portfolio, Continental Coffee is the mother brand. For the South, the company also has the instant coffee brand, Continental Xtra. Chakraborty says, “Continental Xtra has got good market share in South with upwards of 17% market share in Andhra Pradesh and Telangana. Continental Xtra is a strong and growing instant coffee brand for South India.” For non-South markets, the instant coffee brand is Continental Speciale. CCL Products’ filter coffee brand is called Continental Malgudi, focused on Karnataka and Tamil Nadu. Another brand in the portfolio is Continental This, a premix coffee targeted to the younger audience in the Non-South markets and with Percol the company is expanding its coffee brand portfolio into premium instant coffee. He adds, “We have a full portfolio which can be seen as South and non-South and operate nationally. A lot of our current business comes from South and our performance has been robust, in terms of growth, volume, and value and we expect to continuously grow in South. That's how we have built our portfolio and we are bringing in newer products and brands into our portfolio so that we can expand outside South as well while we continue to grow in South.
Looking ahead, CCL Products (India) Ltd vision is to become a food company, with coffee as its core, expand the categories it is present in and engage with consumers with new formats and innovations. Chakraborty says, “Going ahead, we should expect constant evolution, growth, expansion, and eventually we want to become a Pan-India and then a Pan-global organization in FMCG.”
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