PGDM – RM – BATCH – 2018– 2020 – VI TRIMESTER FOOD RETAILING END

TERM EXAM

K.J. Somaiya Institute of Management Studies & Research

Note : All Questions are Compulsory

I, Attempt the following Case Study (Compulsory)

HALLI BERRI

Sowing the Seeds

It was in the year 2003 when a little coffee plantation in Chikmagalur,Karnataka in South India
was hit by severe drought. It was also around this time that the family which held ownership of
this estate faced the untimely death of the Head of their Family, leaving the four women of the
Kariappa heirloom with a 220 acre heritage estate that had been in the family since 1900’s. It
was then that these women; spearheaded by the undying spirit of the mother, Mrs. Nalima
Kariappa and her three daughters Maanavi, Anusha and Tejini who took it upon themselves to
turn the scars into stars.

What started as Chikmagalur’s homely blink and miss coffee shop, Coffee Barn Café; which
gave away little tin foiled packets of freshly ground Arabica coffee and little hand written notes
to its connoisseurs turned into what stands today as India’s first women lead coffee restaurant
called Halli Berri. The word - Halli Berri, (Halli roughly translates into village in the local
Kannada language and Berri synonymous with the coffee berry) idea came about one day over
the breakfast table. Suggested by Maanavi, the oldest daughter of the girls, the name struck an
instant chord. Halli Berri or my village berry was unique, fun with an element of a backstory.
The fact that it peaked phonetic interest in the listener due to its similarity to Hollywood’s
leading actress’s name didn’t hurt it either.

The Brew starts here

Ignited with the concept, the four women then went onto create Halli Berri’s first branding; a
packet of 200 gms wrapped in kraft paper bag and a deep brown sticker. A tiny valve on the back
of the packet lured customers instantly to smell a hint of the fresh coffee aroma through its
opening, enough to remind the holder of Mother earth’s purest produce. The next step was to
begin retailing the product on the plantation’s coffee shop and in the closest Urban city called
Bengaluru. Godrej Nature’s Basket , the gourmet retailer within the city was enthralled by the
sincere struggle of the founders and placed these little brown packets of the Kariappa history on
shelves across stores in Bengaluru. Halli Berri wants to aggressively push itself into the modern
trade retailing across India.
 PGDM – RM – BATCH – 2018– 2020 – VI TRIMESTER FOOD RETAILING END
TERM EXAM

History of Coffee

The origin of coffee in the world can be traced back to the 15th century where early reliable
evidence of knowledge of the coffee plant appeared in Yemen’s Sufi monasteries. Old fables of
Kaldi; the legendary Ethipian goat herder noticing his herd dancing from one peculiar berry
bearing shrub to another as they grazed on the cherry-red fruit containing the beans is an old
wives’ tale of the history of coffee.

History of Coffee In India

The first evidence of coffee growing in India came with the introduction of coffee beans from
Yemen in the 16th Century by Sufi saint; Baba Budan to the hills of Chikmagalur. Since then
coffee plantations have become established in the region, extending from Chikmagalur to Coorg
in Karnataka. Production in India is dominated in the hill tracts of South Indian states, with the
state of Karnataka alone accounting 54% followed by Kerala’s 27% and the remaining by Tamil
Nadu. Indian coffee is said to be the finest shade grown coffee, as opposed to direct sunlight
anywhere else in the World.

The Halli Berri Retail Strategy

As Halli Berri wanted to aggresively expand in the Indian market, Tejini; the Director –
Marketing at Halli Berri was in a Dilemma as to how the brand had to establish itself in the
mindset of the Indian consumers as the production cost of single origin coffee is very high, the
pricing for the product would be very high, for example Rs. 1500/- per kilo (most normal
coffees are priced at around Rs. 400 per kilo) The company chose a differentiated strategy like
how Royal Enfield was for motorbikes, Halli Berri wanted to replicate the same in the coffee
segment. The company targeted the high- end segment and positioned the brand as a “nicher” in
the market place. The next challenge for the brand was to be adopted by the Indian consumers
who are very price conscious- be it the rich or the poor. The biggest challenge faced by Halli
Berri was to inculcate the habit of consuming and purchasing single origin coffee by the Indians.
The company was faced with cash crunch and so could not spend more money on marketing
this brand. The company is now keen to further enhance the brand in the Indian market place.

Halli Berri’s 4 Critical areas

The Distribution Network : A strong distribution network targeting the modern trade to carry
the product at the store is the first challenge for the brand. Although the company experienced
difficulty, they could penetrate into a few gourmet retail stores without much difficulty. The
brand also faced problems of distribution where the product had to move from a remote location
to a modern retail outlet in urban cities. Coupled with the problem is the acceptance of Single
origin coffee and how to create awareness without too much of ad spend. Indian consumer
typically have very less patience to experiment with new products and it pose a major problem
for Halli Berri.

The Consumer Behaviour : Consumer Adoption process in India works mostly through Word of
Mouth (WOM) Marketing and high brand recall. Both the instances are difficult for an emerging
 PGDM – RM – BATCH – 2018– 2020 – VI TRIMESTER FOOD RETAILING END
TERM EXAM

brand like Halli Berri. The company is planning its own outlets (can be a better option) however
budget constraints can be a difficult proposition, to implement this idea. Halli Berri. has to
understand what are the key success factors that drives a brand to be a darling for the consumers,
so that these strategies can be implemented by the Company.

Modern Trade: Modern trade in India (both online and offline) account to only 8% of the entire
retail pie (unorganized retail accounts to 92%) comprising mainly of mom and pop stores. Halli
Berri. will find it difficult to cut into this 8% organized retail which is still in its evolving phase
and trying to understand its own footprints. The ability to carry a young brand like Halli Berri
seems to be a difficult proposition for this brand however every cloud has a silver lining. Halli
Berri, has been accepted by India’s largest food store, Nature’s Basket- the supermarket chain
famous for gourmet categories.

The Millennial Customer: Increased standard of living, ability to spend and the changing
lifestyles is leading to the new . Indian consumer called as Millennials; this segment is disrupting
the existing culture and traditions and challenging the status quo of how India as a Nation is
operating. These segments are on a rampage to start their own enterprises, beat the odds and get
into unknown businesses like Richa Kar who started India’s first online lingerie portal
(Zivame.com) or Bhavish Aggarwal who started Ola Cabs. Can this segment be the future
consumers for brands like Halli Berri.? Or should it target the post liberalization youngsters who
have a six figure salary package in the corporate world is the main question that will play a
critical role in the success of this brand. Ms. Tejini‘s mind is hovering on all these thought
processes, which will drive the future demand for Halli Berri in the Indian Market.

Questions

1. Identify a market segment for Halli Berri, taking into consideration the future consumers
(Millennials) from India, how can this brand target this segment ?

2. Halli Berri with its strong presence owing the coffee plantations is planning to enter into
front end operation in the value chain and is launching Single Origin Chain of QSR’s in
select cities across India. If you are the head for Food Retailing at Halli Berri, What ideas
would you offer for this chain of stores to get success in the Indian Market ?

3. Design and illustrate the Food Supply Chain Model for Halli Berri from the Farm to Cup
Model in order to be efficient and cut cost significantly ?

4. How can you promote Single Origin Coffee Restaurants in India, select any 4 media as per
your choice ?

*****