Overseas business adds flavour to Barista sales

Barista Coffee Company Ltd, a joint venture between the Turner Morrison and Tata Coffee, has announced that its international business has begun to contribute for 10 per cent of sales.

As a result, the company has decided to up its focus on international markets and would begin this process by increasing India presence. After adding 25 outlets last year, the company plans to open nearly 50 more during this year.

Barista is fast gaining prominence in South Asia and currently operates over 130 Espresso Bars. Of these, 4 stores are located in Dubai and 3 in Sri Lanka.

The company is exploring possibilities of opening more outlets in Kuwait and has set a time frame of 4-5 months for the initiative.

"Like in India, our location in Kuwait will be driven by opportunities to attract more foot falls (read customers). Typically, we spend anywhere between Rs 15 lakh and Rs 65 lakh to set up a store. We registered a total of 14 million foot falls across all our outlets last year. We are beginning to reap the benefits of being the first mover. By increasing the customer experience, we serviced an additional 21 per cent customers in December 2003, when compared to the corresponding period last year," Yogesh Samat, chief executive officer, Barista Coffee Company Ltd, said.

Samat added that the company aims to be the world's second largest coffee chain, after Starbucks, within the next 10 years.

This, it plans to achieve based on parameters such as consumer franchisee, turnover and brand imagery. So far, all its outlets are company-owned.

However, the company is seriously mulling to opt for the franchisee route as it receives nearly one inquiry every 3-4 days.

The announcement of Starbucks' entry into India is indeed being viewed seriously by Barista. While this will provide customers with another option, it is also important to note that Starbucks is a world's leading coffee chain company with over 6,000 outlets.

Samat refused to comment on whether the coffee prices will be reduced in the event of Starbucks' foray into India.

Interestingly, when Barista reduced its prices by 15-30 per cent in April last, it witnessed a significant 47 per cent increase in foot falls within three months. Samat pointed out this issue will be entirely customer-driven.