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This is an archive article published on March 25, 2012

Barista aims at 3-fold rise in India revenue

Italian coffee major Lavazza owns the Barista coffee chain.

Italian coffee major Lavazza,which owns the Barista coffee chain,is looking at a three- fold rise in its revenue contribution from India to 10 per cent of its global sales over the next three years.

“Today India contributes about 3-4 per cent of Lavazza’s turnover. We want to grow it to 10 per cent in the next three years,” Lavazza Director for South Asia R

Shivashankar said.

The Turin-based Luigi Lavazza-run Lavazza cafe chain had reported a turnover of 1.2 billion euros (Rs 6,870 crore) in 2011. Barista’s India sales currently stand at a little over Rs 200 crore,going by the 3 per cent revenue share to the Group’s overall sales,which come from 90 global markets.

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The company plans to expand its retail footprint as it chases a growth rate of 25 per cent here.

“We have about 160 stores in the country. We will keep increasing that number on gradual basis. Maybe in the next two to three years we will add about 50-100 stores. The investment cost roughly for 50 stores will be Rs 15 crore. It will be across all formats but predominantly in the normal size stores,” Shivashankar said,adding it normally takes two years for a store to break even.

The Italian company had bought Barista in April 2007. It opened its own brand store Espression in Delhi last year,positioned at the premium segment.

“We want to open Espressions in every metro but it depends on the right place and right property. Within the next six months to one year,we will open more Espression stores – preferably two in every metro. We are quite happy the way the Connaught Place (Delhi) store is doing,” he said.

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Unlike its competitor Cafe Coffee Day which is targeting small towns,Lavazza still bets big on large cities. “We are more focused on larger towns than smaller towns. There is so much opportunity in big cities. We could next look at cities like Pune,Ahmednagar,” he said.

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