Coffee Bean, Blue Foods to open stores

Coffee Bean & Tea Leaf Company, the US-based rival of Starbucks Corporation, has signed an agreement with Blue Foods Ltd, a Mumbai-based restaurant operator, to open a chain of coffee shops in India.

The first of 14 coffee shops planned in the first year will open in New Delhi next month, Sunil Kapur, managing director of Blue Foods, said in an interview in Mumbai today. The first two franchise stores will cost Rs 1.5 crore ($366,000) each, he said.

Overseas coffee chains are attracted to India, where consumption of the beverage has been growing.

Lavazza SpA, Italy's largest coffee company, said in March that it would acquire a 100 percent stake in India's Barista Coffee company, investing a total of $130 million (about Rs 530 crore) over three years.

Seattle-based Starbucks, the world's biggest coffee-shop chain, in July said it withdrew its application to open stores in India, without giving a reason.

"We want to position our store in the premium segment, catering to the age group 20 to 35 years," said Kapur.

About 54 percent of India's population of 110 crore people is aged 24 or younger. With the economy growing an average 8.6 per cent a year for the past three years, incomes are expected to rise at a faster pace.

India wants to increase coffee consumption to 120,000 tonnes annually by 2012 from the current 80,000 tonnes a year, according to the state-run Coffee Board.

Coffee Bean, founded in 1963, describes itself as the oldest and largest closely held chain of coffee stores in the world.