To be successful in business, it’s necessary to have just the right blend of drive and passion. But without a vision of where the company is headed, and a plan on how to get there, there’s no guarantee of success.
Challa Srishant understands this only too well. When the Managing Director of CCL Products (India) joined the coffee exporter and private label manufacturer in 2005, he had a thirst to modernize the legacy company to ensure it continued to deliver on its vision of creating only the finest and richest coffee in the world.
“Within the first two years of launching the brand, we reached almost US$1.2 million in revenue for our branded business.”
“We’re now one of the largest instant coffee exporters and manufacturers across the globe,” he confirms.
But like most things of note, this wasn’t an overnight success.
Srishant’s first move was to create a digital infrastructure to optimize efficiencies in company operations. The next step was to establish a cost-effective direct communication line with the company’s international customers. Over the next few years, the foundation was laid for an R&D center within the company, which has allowed CCL Products to implement innovations in the most efficient and sustainable way possible.
Adapting with Time
As a great proponent of in-house R&D, Srishant also encouraged the company to experiment with complex coffee flavors and to establish a niche portfolio of products.
“To do this, we ended up making our own equipment on site in some cases,” Srishant explains. “It means we’re able to build factories at a price point that is lower than others. That’s why our return ratios are better. It also means that we have a flexibility that nobody else has.”
Once CCL Products began to primarily focus on supplying coffee to other brands, Srishant realized that, with capacity soon to outpace demand, it would need to create a point of difference. For that to happen, feedback from existing customers – who were brand owners themselves – would prove to be crucial.
This, in turn, enabled the manufacturing units to undergo frequent upgrades, allowing CCL Products to better cater to unique customization requests by customers.
It was this ability to create customized blends that gave Srishant the confidence to experiment and launch the company’s own in-house brands in a small way. “We started selling the product directly and, based on our customer feedback, we ended up changing our blend three times in 18 months,” Srishant explains.
“Within the first two years of launching the brand, we reached almost US$1.2 million in revenue for our branded business.”
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Thanks to this strong growth, CCL Products was able to create a separate vertical and, within five years of its launch, the brand revenue alone had reached approximately US$18 million.
Today, the company boasts more than 1,000 unique blends, servicing more than 400 clients in more than 100 countries through its operations in four factories across the globe.
Srishant is now focused on consolidating the company’s new business model. CCL Products has already acquired six coffee brands from the United Kingdom-based Lofbergs Group, and is on track to achieve 40–50 percent of revenue from the B2C segment by 2030.
To reach its targets, it has more than doubled the capacity of its plant in Vietnam and is building a new facility in India with the aim of having a total capacity of 77,000 metric tons across India, Vietnam and Switzerland by next year.
Beyond Coffee
Recent global events have thrown up multiple challenges for businesses the world over and, as a result, CCL Products is now looking to diversify.
Despite the COVID-19 pandemic, it added an additional 10 percent volume in the first few months of 2020. Similarly, territorial de-risking brought about by the Russia–Ukraine war meant the company grew by 20 percent. But Srishant says that, despite these impressive results, there were concerns about an over-dependence on a single product category.
“That’s why we’re looking at diversifying out of coffee with innovative products such as plant-based meat,” he explains.
As the company takes a measured, sustainable approach to its product diversification, it’s also building internal capabilities to create specialty coffees and small volumes for new brands that want to create a niche lineup. This is quite the opposite direction of the company’s economies of scale model from the early years.
Supporting these ambitious plans are CCL Products’ long-term suppliers, many of whom have been working together since 1989.
“We can now match any coffee quality from anywhere in the world.”
“If it’s a win–win situation and both can grow together, then the partnership works in the long-term. Otherwise, if you have fly-by-night operators and you’re working with them on a short-term basis, it’s not going to be sustainable,” Srishant says.
“We can now match any coffee quality from anywhere in the world. From the most economic products to the most expensive products, we can make them in the same facility. This is something that’s unique in our industry.”
Despite the company’s success, it’s clear that Srishant doesn’t intend to rest on his laurels. “On day one of joining the company, our chairman told me very clearly that the day you say that you know everything – that’s it. You’re done,” he recalls.
“That’s really the motto for our entire team. Every day we learn, we adapt; mistakes may happen but we course-correct and we move on again.
“We’re innovative, we adapt and it’s this, combined with a positive attitude to every challenge, that will continue to set us apart from the crowd.”