Continental Coffee on acquisition spree

Continental Coffee Ltd., one of India’s premium coffee manufacturers has acquired a clutch of brands from Food Brands Group, a subsidiary of Löfbergs Group.

CCL Products (India) Ltd (CCL), India’s largest instant coffee manufacturer, was established in 1994. CCL India is one of the world’s largest private label coffee manufacturers and has manufacturing sites in India, Vietnam and Switzerland. The company supplies to over 400+ trade clients in 100 countries amd recently became a “USD Billion” company on the Indian Stock Exchange.

CCL has acquired Percol^Ò, Rocket Fuel^Ò, Plantation Wharf^Ò, The London Blend^Ò, Perk Up^Ò and Percol Fusion^Ò from Food Brands Group, a subsidiary of. The agreement accelerates CCL’s strategy in expanding the manufacturing and distribution of FMCG products globally.

The acquisition will give CCL access to major supermarkets in the UK, which is Europe’s largest instant coffee market with annual retail sales of USD 850 Mn (Rs 6,918 Cr).

Percol^Ò is a much-loved progressive brand, launched in 1987 which achieved several notable milestones and has stood for sustainability all along. The Percol product range currently comprises of Instant Coffee, Roast & Ground Coffee and Coffee Bags. Incidentally, CCL had been a preferred supplier of some of their SKUs and blends in the past.

Praveen Jaipuriar, CEO, CCL said “We’ve had tremendous success in developing a consumer brand proposition at home and welcome the opportunity to develop a similar approach in other markets by adopting and improving local brands. Percol^Ò is an exciting venture and a brand with undoubted favourable heritage. In close cooperation with our UK sales & marketing partner we will innovate, introduce new products and focus on B2C and B2B marketing to realise value for our shareholders, employees, partners & clients”.

Daniel Styrenius of Löfbergs Coffee Group, said “Percol^Ò is a tremendous brand and one which we are proud to have been the custodian for since 2013. The sale allows us to focus on the Löfbergs Roast & Ground and Whole Bean business which is growing rapidly in the UK”.

The market for freshly brewed coffee has been burgeoning in India over the past decade. While out of home coffee consumption (at cafes and restaurants) has been a trend already, at-home coffee consumption has been led by several marquee D2C coffee brands such as Slay, Blue Tokai, Sleepy Owl, Rage, and many others. It is to cater to this segment that CCL’s new acquisitions will come in to play.

The total size of at-home coffee consumption market in India is approximately Rs. 6,400 Cr pa (USD 800 mn). Over 4,000+ coffee shops that dot the Indian coffeescape are estimated to contribute another Rs. 6,000 Cr. Online first D2C brands in India have shown massive scale and are currently valued at Rs. 1,500 Cr pa.

Nestle’s Nescafe and Hindustan Unilever’s Bru together dominate the at-home coffee market with a collective market share of over 70%. Continental Coffee, Tata Coffee and a few others collectively have the rest of the 30% market share.