(10 April 2006 7:00 pm)

BANGALORE: From selling Coffee Vending machines to adding retail of branded packaged filter coffee- it's taken Fresh & Honest (FHCL) a decade to make this particular increment to their portfolio. FHCL today announced the launch of Alive, a new filtered coffee brand in Karnataka.

The brand was launched in Tamil Nadu (TN) earlier this year on 27 February. A Kerala launch is scheduled for the first week of May, with an Andhra (AP) launch planned for mid May. Nationally, the brand will be rolled out by June end.

The launches are currently South India focused because 90.2 per cent of filter coffee consumption happens there, with West India following at a far second place with 5.2 per cent of the consumption pie, closely followed by the North of the country with a three per cent, the rest of the consumption happening in the Eastern Zone of India.

The Indian Filtered Coffee market is estimated to be around 20,000 Tons and Rs 3 billion in value, with 53 per cent supply happening from the organised sector and 47 per cent from the unorganised sector comprising of small shops that provide a mix of chicory and coffee in varying proportions.

Alive will be 70 per cent coffee and 30 per cent chicory. The top nationally branded player in the market is HLL's Bru with a lion's share of 68 per cent followed by Tata's who command a meager eight per cent of the market share. A local player in TN, Narasu, contributes 13 per cent to the pie, with the rest being shared by smaller players. FHCL plan to have Alive capture 10 per cent of the market share (approximately 1000 Tons) in the first year itself and catapult to the second or third position, depending upon which players share they can eat into.

FHCL will be spending Rs 20 million on its marketing/ad/promotion campaigns in the next two months.

A print and media campaign is planned and has already commenced in TN. A TVC has been aired on Sun, Raj and Vijay channels along with DD's rural channel in TN.

FHCL CEO R Shivashankar claims that the TV ad campaign has been so successful in TN, that he has already received enquires for export since "Sun has an international audience."

Local TV cable channels are another avenue that FHCL may use. The creative work for the TVC has been done by Rediffusion; the TVC is produced by Chennai based VKP at a cost of Rs 4 million. Another TVC is being shot at present according to Ravishankar, who plans to spend Rs 20 million plus towards promotion (excluding the cost of the TVC's). All creative ideas and media business is handled by Rediffusion.

Aroma, colour, taste and the right bitterness are the factors that control the drinkers preference for a particular brand as per FHCL's research. To attract customers, FHCL claim that their latest offering is a rich, roast and ground coffee. The product is priced at premium of 10 per cent vis-à-vis other players.

FHCL claim that their technology is a first in India - the fresh coffee beans that go into the preparation of 'Alive!', are subject to both drum and air roasting processes and each grade of coffee bean is individually roasted to release its full flavor.

Another industry first is packaging - Alive will be packed in high optical density metallised polyester material with nylon poly inner layer for better moisture barrier and aroma retention properties, is available in 50, 100, 200 and 500 gms retail packs in the market.

Aggressive direct awareness creating initiatives in Karnataka are also on the anvil. FHCL plan to induce mall, department and large store customers to sample a cuppa and purchase a packet of Alive, as also visits to residences to sell the first packet. This has worked quite well in Chennai and the number of repeat customers has been far in excess of expectations according to Shivashankar.

In the mean time FHCL claim that their imported Italian machines dispense six million cups of hot and cold java and other drinks every month from their 2300 coffee vending machines sold from their 15 branches and 22 cities in India.

The vending machines are located in five start hotels, corporate offices, and in Barista, which happens to be a group company. FHCL plan to use the FMCG distribution route instead - 14,600 outlets in TN, 11,400 in Karnataka, 10,700 in AP and 4,100 in God's Own Country.

FHCL is a part of C Sivasankaran Sterling Infotech Group of companies along with Barista (which was acquired some time ago), Dishnet Wireless, Aircel and Aiwo (restaurants).