Luigi Lavazza S.p.A, the Italian manufacturer of coffee products that owns and operates the India Barista coffee chain is reportedly looking for a strategic partnership, including agreements, joint management of the Barista Lavazza chain.
The arrival of new players like Starbucks and Dunkin walk in is heating up the competition in this market that already has established players like Café Coffee Day (CCD) and Costa Coffee, besides Barista Lavazza.
The Barista Coffee Company Limited was launched in February 2000, and has been the pioneer in setting up coffee bars in India. It was jointly promoted by the Turner Morrison group and Tata Coffee Ltd. In 2004, the Chennai based Sterling Group acquired the 65.45% stake held by Turner Morrison Group, in the Barista chain and eventually also bought out Tata Coffee’s stake.
Lavazza SpA saw the opportunity in India, and in 2007 bought out Sterling Group’s entire stake in two of its businesses, Barista Coffee Company and the coffee vending business Fresh & Honest, for an estimated combined valuation of around $ 125 million. Barista has fallen behind, faced with tough competition from CCD and Costa Coffee, and is reportedly running in loss.
Lavazza has refuted rumours of exiting India, and has instead affirmed its intention to optimise the opportunities in the Indian Market, and is seeking a partner or investor in the venture.
As per reports, Lavazza is more interested in the more profitable coffee vending business, which operates under the Fresh & Honest and Lavazza brands in India.
India has reportedly added 250 coffee outlets a year in the past five years, taking the total to 1,950 outlets. Market analysts predict that another 1,000 coffee stores would be added in the next five years.