The after-effects of coffee chain giant - Starbucks entering India is felt as Italian firm Lavazza plans to rope in a strategic partner.

ET also added that the company is in the process of scouting for an outright buyer for Barista or a possible strategic investor.

However a Lavazza representative mentioned India as an important location and waived off intentions of moving out from the country.

Last year the company launched its international brand Espression, a high-end café, in New Delhi which could signal shifting Barista on the backburner.

The Barista brand has seen a spate of changing heads since its birth. Lavazza had bought it for $125 Mn in 2007 from takeover tycoon C Sivasankaran’s firm – Sterling Infotech Group, which had bought the stake from Turner Morrison and Tata Group back in 2004.

Barista was established in 2000 and has espresso bars in India, Sri Lanka, Bangladesh and the Middle East. It has over 200 Barista Lavazza Espresso Bars and Barista Lavazza Crèmes in more than 30 cities across India.

Parent Lavazza, the largest coffee retailer in Italy, plans to focus more on the higher profitable coffee vending business that it operates under Fresh & Honest (bought along with Barista in 2007) and Lavazza brands in India.

In recent times the coffee chain culture is on the rise in the country compared to earlier when Café Coffee Day and Barista were counted as the only players in the space. New players which are fast capturing the market share include Costa Coffee, Gloria Jeans Café, Bru World Café and Coffee Bean & Tea Leaf among other.

Rival CCD has around 1400 (comprising almost half of the total chains in the country) outlets in the country and is also entering the premium segments with its lounge stores.

New international entrants comprise of Starbucks (in alliance with Tata) and Dunkin Donuts (entering through Jubilant Foodworks). Australian coffee chain Di Bella is already present in Mumbai with seven stores whereas American doughnut and coffee chain Krispy Kreme (partnering with Landmark group) and British firm Coffee Republic were also set to enter the Indian market.

Retail consultant Technopak estimates that the food services retail market is worth $8 Bn and will grow at a CAGR of 8-10% over the next five years. The organised market accounts for 15% (or $1.2 Bn) of this and specialty coffee chains contribute 16% to the organised food services retail market.

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