• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

Barista's current business model, with its retail chain of 76 outlets, occupies the `leisure time' of a typical customer, which in turn is internationally estimated at 16-17 per cent of that customer's total available time.

MUMBAI, March 22

BARISTA Coffee Company Ltd, which runs the largest retail chain for speciality coffees in India, targets to increase its domestic turnover from the current Rs 30 crore to Rs 100 crore in 2002-2003, Mr Sandeep Vyas, Executive Vice-President (Marketing & Communication), said on Friday.

Tata Coffee, a subsidiary of Tata Tea Ltd, holds a 34.4 per cent equity stake in the "almost zero-debt" Barista Coffee Company.

According to Mr Vyas, the retail chain's growth in next fiscal, including an increase in the total number of on-promises and off-premises counters from today's 82 to an estimated 250, will be financed largely by internal accruals and borrowings.

The company has been EBIDTA-positive since August 2001 and is expected to be PAT-positive from April/May 2002.

"Equity is not the cheapest source of funds for our kind of business," he said, citing additional equity infusion as among financing options for Barista.

Mr Vyas, however, declined to put a figure to the capital expenditure entailed for growing turnover so steeply, but said there were no plans "as of now" for Tata Coffee to increase its stake. "That is not the only route for capital infusion," he pointed out.

When contacted, a senior Tata Tea official said he was not aware of any move to further enhance Tata Coffee's equity stake in Barista.

Barista's current business model, with its retail chain of 76 outlets, occupies the `leisure time' of a typical customer, which in turn is internationally estimated at 16-17 per cent of that customer's total available time. Off-premises outlets — like the ones Barista has opened at ICICI, GE, e-Excel, Triburg and Taj hotels — seek to enhance Barista's proximity to customers. Travel and work account for a major share of customers' time.

For the domestic market, Barista's coffee beans are sourced from Tata Coffee and processed at a roastery in Bangalore. It also sources coffees of foreign origin from their respective markets, processing them at a roastery in Venice before shipment to India. The latter facility is a strong point for Barista, in that Italian coffee preparation style is central to international coffee drinking habits. Barista has evolved into the largest coffee retailing business based on the Italian style in the world. The company has plans to open outlets abroad shortly, Mr Vyas preferring not to disclose the targeted numbers or their likely location. The entry format would follow the regulations of those markets, thus a choice between franchisees, joint ventures or owned presence.

Notwithstanding retailing of quality teas at Barista following Tata Coffee's equity acquisition, Mr Vyas said receipts from tea retailing constitutes just 4 per cent of revenue. It is, however, not an interim arrangement until such time as Tata Tea realises its own plans for tea parlours. "Tea will continue to be there," he said. Overall, he positioned Barista as a coffee experience but not restricted to coffee. Though 67 per cent of its revenues come from beverages, Barista, he says, seeks to be more of a lifestyle experience.

Send this article to Friends by E-Mail

Stories in this Section
It's `reorganisation' not stoppage of production, says Maruti

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line