Furniture line retailing: Future Group in deal with Bean Coffee Trading Co

21 Apr 2010, 0010 hrs IST, Kala Vijayraghavan & Maulik Vyas,ET Bureau
 
 
MUMBAI: Cafe Coffee Day may develop a private label coffee brand for the Future Group as part of a multiple partnership between the two groups.

Kishore Biyani, CEO of Future Group, and V G Siddhartha, chairman of Amalgamated Bean Coffee Trading Co that owns the country’s largest coffee café chain, said they are also developing a furniture line to be sold through the retailer’s Home Town chain.

“We are building a strong relationship by looking at mutually beneficial partnership across some categories,” Mr Biyani told ET.

The two have already signed a formal agreement and a MoU for the partnership.

When contacted, Mr Siddhartha said, “Kishore Biyani and we are looking at ways of strengthening our partnership through various options for coffee consumption and supplying furniture to Future Group’s furniture retailing outlets.”

While structural and investment details of the partnership could not be ascertained, people familiar with the development say Mr Siddhartha is making sizeable investments in the furniture manufacturing facility that sources timber from his coffee plantations.

Already, a team from Future Group is co-designing the furniture with the staff at Dark Forest Co, a closely held family concern of Mr Siddhartha, which manufactures and supplies furniture to about 99 Café Coffee Day outlets across the country.

Amalgamated Bean Coffee Trading grows coffee in the 7,400 acres of its own estates and another 2,500 acres of managed estates. The group also sources coffee from 11,000 small growers, making Mr Siddhartha the largest individual coffee plantation owner in Asia.

The private label coffee brand that Cafe Coffee Day will develop for the Future Group will be called CCD, and it will be retailed in all Cafe Coffee Day outlets besides Biyani’s chains like Big Bazaar and Food Bazaar.

Mr Biyani has been aggressively building his FMCG private label business recently after some leading manufacturers refused to increase retailer’s margins. Future Group’s private brands include Cleanmate in floor-cleaners, Sach in toothpaste and Tasty Treat in processed foods.

“Our focus is to grow coffee consumption and build strong FMCG brands,” Mr Biyani said about the deal with Café Coffee Day.

Café Coffee Day, or CCD, has recently rebranded itself with its new squared – a ‘Dialogue Box’ logo and new furniture, cutlery and changed menu to connect more precisely and reposition itself as a hangout place for its consumers.

It operates 915 outlets countrywide and holds a65% share in the Rs 400-crore coffee chain market in India. It plans to have 1,000 outlets and revenues of Rs 840 crore by the end of this fiscal year.

It wants to reach out to Europe, West Asia and South East Asia with a targeted turnover of $1 billion by 2015, say sources close to the company.

Mr Siddhartha is reported to have raised $200 million for his business conglomerate early this month. His empire includes Coffee Day Hotels & Resorts, broking firm Way2Wealth, VC firm Global Technology Ventures and realty venture Tanglin Development.