Italian coffee roaster Lavazza has exited the coffee shop business in India. The Turin-based group has sold Barista Coffee Company, which it bought in 2007, to Carnation Hospitality, a subsidiary of containers and packaging firm Rollatainers, for an undisclosed amount. Lavazza , however, will continue to supply coffee to Barista.
In a statement, Lavazza CEO Antonio Baravalle said the decision to move out of Barista was in line with “the global business guidelines of the group to no longer manage directly the coffee shop business.”
Barista has been grappling with management issues. It has also been facing increasing competition from the likes of Starbucks and Cafe Coffee Day and has been shutting down outlets. Currently, it has 190 outlets across formats, including: lounges, cafes as well as kiosks at corporate houses.
The company had tried to tag on to the Lavazza brand to become a premium player, and was also mulling over having a franchise operation in Tier II cities.
“India continues to remain an extremely important market to Lavazza’s international operations, and it is strategic to the brand’s overall growth initiatives across the world,” said Baravelle in his statement.
Changing ownership Barista was a pioneer in coffee retail in India and had changed ownership several times. It was founded by Amit Judge of Turner Morrison in 2001, and also saw Tata Coffee pick up 34 per cent.
In 2004, it was sold to Chennai-based Sterling Infotech Group, promoted by NRI businessman C Sivasankaran, who also bought out Tata Coffee’s stake.
In 2007, Barista was acquired by Lavazza along with another coffee company, Fresh & Honest, for ₹480 crore from the Sterling Infotech Group.