After two decades in the coffee industry, major coffee exporters SLN group has ventured into the instant coffee market with the launch of its brand new product ‘Levista’. As the group expects the top-line to touch Rs 1,100 crore with it new brand, SLN group director N.Sathappan speaks to Indian Retailer during the launch of Levista recently.
Tell us about your journey in the coffee industry. What inspired you to launch your own brand?
For nearly six decades my family has been in the coffee industry as we owned coffee plantations. However, it was only in1997 that we ventured into exports and there has been no looking back ever since. We are the major coffee exporters in India with our processing plants having a capacity of processing 8,000 metric tonnes of coffee. After two decades of hands-on experience in the export business, we thought this was the right time to launch our own brand and we decided to enter the market with instant coffee because most of the coffee drinkers are youth. We were sure we could capture the young coffee drinking market with instant coffee powder.
What is the market size for instant coffee?
In terms of quantity consumption, about 21-23,000 metric tonnes of coffee powder are consumed in India with majority of the coffee drinkers located in South India especially Tamil Nadu and Karnataka, followed by Andhra Pradesh. Instant coffee market is growing at 10 per cent.
What business model will you follow?
Unlike Cafe Coffee day brand which has taken the retail route, we have decided to take the footsteps of Nestle and Hindustan Lever which follow the distribution model. Initially, Levista will be available in 30,000 retail outlets in Tamil Nadu and 25,000 outlets in Karnataka, and eventually will be launched pan-India.
What are your retailing strategies?
We will mostly retail through distribution, but we will also open our own coffee experience centre in Coorg, Karnataka. We will be present in most of the major malls in all tier I cities with our coffee shops and kiosks apart from opening our own retail outlets. The coffee shops will follow COCO model in tier I cities, while in tier II cities we will follow FOCO model.
What are your fiscal targets?
We had registered top-line of Rs 800 crore last year and with the launch of Levista we expect top-line to touch Rs 1,100 crore.
Coffee is mostly consumed in South-India, how do you plan to take the product pan-India?
We are going to depend on social media to promote our brand and take it to the large market. Although Levista is a premium product, it is priced competitively and price point is our strategy. We will open coffee shops and experience stores in North India too so that our brand presence in increased.
What are your international expansion plans?
We have a large consumer base overseas and by 2019 we plan to launch Levista in the global market. We mostly supply to South East Asian countries, China and Turkey. We will be present in these countries too with our brand in the next two years.