Coffee chain Cafe Coffee Day plans to launch flavoured water in 2007. The company has already extended its brand Coffee Day to packaged drinking water.
Naresh Malhotra, CEO, Cafe Coffee Day, told Business Standard, "Over the years, we have built our brand and customer loyalty.
"This is being leveraged for the beverage extension and it will work."
Cafe Coffee Day sells its own brand of cookies, wafers and mints, apart from coffee.
The company believes the packaged water foray will help it build the Cafe Coffee Day brand as customers would carry the bottled water with them, thereby increasing brand visibility.
In foreign countries, retail chains such as Macy's in the US are known to have bottled water.
At present, the packaged drinking water sells in 50 per cent of Coffee Day outlets at a price of Rs 15 a bottle of 500 ml. Malhotra said, "Instead of introducing existing brands, we see it as an opportunity to build a brand ourselves."
The company plans to sell its packaged drinking water across all its 400 outlets by January 2007.
"We can't match with that pricing as we serve packaged water under a different ambience as opposed to mom and pop outlets which retail other packaged water brands," said Malhotra.
Cafe Coffee Day executives expect 70 per cent of their 100 million customers (expected walk-ins in 2007) to buy packaged water from their outlets.
Malhotra, however, clarified the company would continue to offer normal water at no additional cost at the outlets.
Both the packaged water and the flavoured water extensions will bear the Cafe Coffee Day brand name and will primarily target the age group of 16- 25 years. The company believes that customers will find its water foray attractive.
The company expects a revenue of approximately Rs 75 crore (Rs 750 million) from its water foray in its first full year.
At present, Cafe Coffee Day outsources its packaged water from third party manufacturers.
However the company will be looking at other options, Malhotra said without elaborating further.
