These are not cost, these are prices.
But if you are interested in knowing the cost, I remember reading in one of their con-call that CCL’s cost is 50% lower than Nescafe.
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Wow that is a strong moat if it is true.
I am really sorry, I have to apologize here due to a mistake.
None of the Con-calls states that they have 50% lower cost.
But I have some data to compensate for that.
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Management has said that their margins were 30% after giving buy one get one free offer.
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For B2B business their speciality coffee has margins of 30-40%
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Now, comparing only freeze dried coffee with others:
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Yes, thanks for the clarification. 50% did seem a bit stretched.
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Is this a confirmation that they are entering Pods segment which is a multi-billion dollar industry?
Watch from 19:50 where COO say that Pods will come next year.
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We can see that continental coffee are across all super market in Karnataka - MORE | NILGIRIS | JIO MART | LOCAL KIRANA’S - there is a special offer of (Buy 1 get 1 free) priced very lower compared to other coffee products.
I asked few people and they are quite happy with aroma and taste of coffee - doesn’t mean entire south india is happy however Karnataka, Kerala & Tamilnadu are major beneficiaries for companies to target.
Disc : Am not invested ( will wait to see outlook of Q2) and plan my action accordingly.
Scuttle Butt - Cyclicality of the profit may be in increase demand of people buying product in huge quantity in advance due to the lockdown. - As people are frightened to go out.
Secondly many hotels are closed - so people prefer to buy more at house given (Buy 1 get 1 free) is a good trick that played well psychologically in minds of people
Once the habit of taste kicks in for a month or say less than 21 days - people wont prefer other taste - as this is something new
Infact - am craving for this coffee which gives a perfect sense of taste and quality
We would also need to see how people tend to change over taste and replace coffee jars to Continental - which can only be determined by looking in to Q2-Q3 results
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Most of the sales from bulk trading of coffee B2B… retails sales are very less and they are expanding network aggressively… I don’t think pre Covid sales will back on track near soon… 
Dis invested
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Thanks @abdul_hakkeem : this is in particular rightly said.
Homework Revision :
As mentioned by @arjunbadola the client list : Jacobs Douwe Egberts (JDE), Strauss Coffee, & LMZ Soluble Coffee are some big brand to whom CCL supplies. - These have strong market presence in Germany, South Africa & Europe as i stayed most of my tenure in South Africa.
SA markets are pretty dominated by Jacobs & Douw Egberts.
Now India stand at 6th position :
https://coffeemakered.com/top-coffee-producing-countries/#:~:text=Top%20Coffee%20Producing%20Countries%20of%202020%20|%20Largest%20Producers,-No%20doubt%2C%20there&text=The%20two%20popular%20coffee%20types,Coffee%20Producer%20in%20the%20world.
Given chances of expansion in Vietnam as the 2nd largest coffee exporter - https://www.livemint.com/companies/news/continental-coffee-to-invest-20-mn-on-vietnam-plant-india-packing-facility-1565699187859.html
I truly believe that they have large scope - targeting 90+ countries and India (included).
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Could you or @arjunbadola provide any reference / source for CCL’s clients named above?
Many thanks!
The names are provided in somewhere in the past 10 con-calls I can’t exactly recall which one.
Plus there is one amazing axis security report on CCL which also states about its clients.
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A small feedback: I ordered Contintenal Speciale via Amazon on Friday, however it’s not been dispatched yet. This is despite being a Prime member (as earlier mentioned here, I also had to pay extra for shipping). With limited visibility in retail stores as of now, online channel is the major source of association with the brand and maybe we should suggest the company for more customer friendly ordering. These small changes can make it more attractive in the minds of consumers.
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Updates on Quality & New Competition
I’m a regular consumer of Continental Coffee’s blended variant- 70:30 Coffee/Chicory mix. I’m a great fan of this coffee blend and can vouch for the aroma and quality.
Response to fellow VPer- I’ve ordered CCL coffee via Amazon during lockdown. Delivery definitely takes a longer time (more than 10 days for me when I last ordered and did make me wonder if I would receive it) compared to Amazon Prime’s 3-4 timeline but it does get successfully delivered.
JioMart in my area at least doesn’t feature CCL products. However it has introduced a new private label brand ‘Kaffe’ in two variants the 70:30 blend as well as 100% pure coffee at a considerably lower cost.
I haven’t tried it so far but may wish to experiment as a small sachet if CCL increases its cost and the ‘Kaffe’ offers CCL’s aroma and quality at a lowered cost. As of now ‘Kaffe’ 10/20Rs variant isn’t available so not interested.
From the label on Jiomart it appears Reliance is sourcing it from a Kolkata based supplier - Jayashree Tea
BTW, Grofers sources its private label ‘Happy Day’ coffee from CCL. I’ve used and liked it as well. Its not always available on Grofers in my area though.
Agree with VP community about CCL’s competitive advantage over Nestle in terms of price and quality.
Disclosure: Not looking to invest. Merely a coffee lover’s interest
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I am surprised to see Jayashree Tea as their supplier because I was in the opinion that Reliance Kaffe is manufactured by CCL.
Anyways, its good to know that they also supply to Groffers now.
Thanks for sharing!
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Reliance Kaffe is manufactured by CCL products only. Just now verified the same jio mart APP.
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Image from Amazon for XTRA Coffee. Everything seems good for the branded coffee.
They may not take 4-5 years to achieve 200 cr business from branded business. Because of 1+1, many people tried this in fact i am also. We loved it and made our permanent brand. After using the brand for 3 months, i started following the stock and entered in May 2020. As part of my re search, i inquired about 12-15 people and got very good response. Especially 2 senior citizen families has given very good feedback about XTRA. Interestingly, the Road side T Stall guys also replace Bru with XTRA (May Be cost advantage for them). Now personally i started tasting all their other products one by one.
Forget about the B2B business. B2C itself is very big business in future.
Small number analysis from my side.
Per family, Aprox cost of coffee is 300/- per month (Who consume Daily)
If CCL can acquire 1 cr families say in next 10-15 years. Annual turnover of the company would be 3600 Cr. Net profit of 700 Cr is possible and leads to market cap of 20K-30K cr.
May or may not become, 1/2 done is also very good and i am convinced and invested.
The review might be biased as i am invested (7% of the Portfolio).
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FYI- Kaffe Manufacturer Info as showing up on my app. Thought I would share it as VPers may find the competitor brand info useful.
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Agree. I can see Jayasree
When I check the image of the item, it was shown as CCL. Reliance might have contract with both.
If both Jayashree Tea & CCL supply how can it taste same? Does Jayashri Tea have coffee plantation/processing plant? I checked their website and could not find coffee as one of their products. Seems some mistake on the part of JioMart.
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This CCL info on the packaging is correct in the jar and also in the plastic packs. This is odd. One will only know any difference in taste when they consume it. Or it is likely an error on JioMart. No such issue on Grofers ‘Happy Day’ as I have verified CCL info and the taste is great!
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