Starbucks did not destroy CCD. Debt did

Added: 2026-05-19

[00:00:00]In 1996, a man named V.G. Siddhartha opened a small cafe in Bangalore. He called it Cafe Coffee Day. India had never seen anything like it. A proper cafe, good coffee, a place to sit, talk, and belong. For a generation of young Indians, CCD wasn't just a coffee shop, it was a way of life. By 2010, 1,700 outlets, six countries, 500 million cups of coffee a year. By 2019, 9,000 crore in debt, and a founder who couldn't find his way out. This is the full story of Cafe Coffee Day.

[00:00:44]Act one, the rise. Let's go back to where it all started, 1996.

[00:00:51]India's economy is liberalizing. A young, aspirational middle class is emerging, and there is nowhere, nowhere for them to go and just sit. Siddhartha saw that gap. He didn't just open a cafe, he created a category. His competitive advantage was unique. He didn't just sell coffee, he owned the entire supply chain. His family owned coffee estates in Chikmagalur. From bean to cup, it was all CCD.

[00:01:22]That vertical integration gave him margins nobody else could match. And then the rollout began. 100 outlets, 300, 600. By 2010, 1,700 outlets across India, the undisputed number one cafe chain in the country. For millions of Indians, CCD was where you went on your first date, where you studied for your exams, where you had your first job interview. The brand was woven into Indian life. At its peak, CCD was serving 500 million cups of coffee in a year.

[00:01:59]Act two, the fall.

[00:02:02]So, what went wrong? One word, debt.

[00:02:06]Siddhartha was a visionary, but he was also an aggressive deal maker. He had invested in multiple businesses beyond CCD, tech parks, real estate, a stake in Mindtree, the IT company, and he funded all through borrowing. For years, the growth covered the cost. CCD kept expanding, revenues kept climbing, the debt felt manageable, and then it didn't. Interest rates rose, revenue growth slowed, the company's debt spread across multiple businesses had quietly crossed 9,000 crore. Interest payments alone were crippling the businesses.

[00:02:49]Siddhartha was forced to sell his Mindtree stake at distress prices just to save his businesses. The pressure was relentless. In July 2019, V.G.

[00:03:01]Siddhartha went missing near the Netravati River in Karnataka. He was found the next day. He left a letter. In it, he described the unbearable pressure that he was under, the harassment from lenders, the weight he had been carrying alone. India lost a brilliant entrepreneur. His family lost a husband and a father. And CCD lost the man who built everything.

[00:03:30]Act three, the return.

[00:03:32]After Siddhartha's death, most people expected that CCD would collapse entirely, but it didn't. His wife, Malavika Hegde, stepped in as CEO. She had no background in running a listed company, but she had something else, resolve. She has stabilized operations, stopped the free fall, began negotiating with lenders. Banks agreed to haircuts on the debt. Assets were sold. The business was slowly restructured.

[00:04:04]Hundreds of outlets closed, but the brand survived. Today CCD has around 1,100 outlets and still operating. The coffee estates still run. The supply chain still works. And here's the thing, if you walk into a CCD today, it still feels like a CCD. The brand recall across urban India is remarkably strong.

[00:04:30]Here's what CCD teaches every entrepreneur and retail leader. A brand can survive almost anything. Bad products, bad markets, bad timing. What it cannot always survive is a debt restructure. That takes away the founder's ability to make decisions freely. Siddhartha built something genuinely great. CCD was a category defining brand. The coffee was good. The model worked. The supply chain was a genuine competitive advantage. But the debt built up in the businesses around CCD eventually dragged the whole business down. CCD didn't fail because India stopped drinking coffee. It failed because the business ran out of financial room to breathe. The question now is whether Malavika Hegde can give it that room back and whether CCD can find a second chapter. I genuinely hope it does.

[00:05:28]One question for you. Do you think CCD can reach 2,000 stores again? Drop your answer in the comments below. I read every single one. Links to my Zara India breakdowns are on the screen now. I'm Milton Pereira, the retail guru. See you in the next one.