Italian coffee chain Lavazza entered India with the acquisition of Barista Coffee Company in 2007 and started the Barista Lavazza chain of coffee shops. The company was again in the news after it opened its first international premium coffee chain Espression in India in September this year. Attilio Capuano, Asia & Pacific director, Lavazza, feels that the two brands can coexist as the target audience is different, even though the distinctions might get blurred at times. In an email interaction with Richa Prakash, he discusses the future of the two brands in the country among other things. Excerpts.
What was the idea behind introducing Espression in India, when you already have one coffee chain — Barista Lavazza — present here?
Globally, Lavazza Espression was launched in 2007. Lavazza Espression is Lavazza’s ambassador around the world. Hence, it was a natural progression for us to bring Lavazza Espression here in India too.
India is a fast developing and fascinating country — a melting pot of different flavours and cultures, where young consumers are attracted to fashion, western trends and consumption habits. The introduction of Espression in India is part of our long-term strategy to strengthen the Lavazza brand and get customers to experience the rich flavours of Italy. We want to offer the Indian consumers the full Lavazza experience, made of ambiance, overall quality and excellent products. The first opening will be followed by an expansion plan to open Lavazza Espression stores across key metros in the country over the next 12-18 months.
We want to offer a new point-of-sale where people can taste an excellent and authentic Italian espresso and enjoy a sophisticated ambience with a clear Italian style, as well as a powerful image of the company that Lavazza represents. Lavazza is famous for its quality, innovation and respect for tradition. Three key words also sum up what makes Espression so special: Innovation, design and creativity.
We have taken our Espression brand to countries which have an espresso culture or a powerful growth trend for segment and market: Countries which have already been developed to create branding synergies; that have potential for developing chains; the presence of a Lavazza retailing structure.
Who is the target consumer for the new brand as opposed to Barista Lavazza? How do you plan to expand? What is the profile of competition in the segment Espression plans to operate?
Espression is our premium offering. With its top-quality products and warm, welcoming environment, Lavazza Espression is the destination for aficionados of authentic Italian coffee. Espression is positioned a notch above the company's existing coffee chain brand Barista Lavazza, with products priced about 15-20 per cent more.
Lavazza Espression has an innovative take on the world of espresso that has been made possible thanks to over 100 years of our experience in the coffee industry. It embodies a perfect blend of unique international city glamour and a warm Italian style, and offers to patrons not only the authentic Italian coffee and specialties but also a wide range of cool drinks and Italian food.
We opened our first Espression in New Delhi this September. Besides Delhi, Espression will be launched in Bangalore around March next year and in Mumbai later. We plan to open Lavazza Espression stores only across key metros in the country over the next 12-18 months.
We have always maintained that we do not consider anyone as a competitor to us. Lavazza is a coffee company and we have always supported a healthy sustenance of all the players in the market. It is the consumers and the coffee that matter to us and it has been our constant endeavour to delight them with authentic Italian espresso.
Can the two brands (Barista Lavazza and Espression) coexist? You claim that Espression will cater to a higher end of the market, but are the boundaries clearly defined? The two brands can definitely co-exist due to the different set of consumers they cater to. Barista is more of an Indian brand, while with Espression we will bring in the international taste into the country.
You would notice the difference and co-existence of both the brands in their expansion plans as well. While we have over 160 Barista Lavazza outlets in metros and tier II and tier III towns, Espression would have fewer outlets with metros being the only focus
While there is a clear-cut demarcation between the two sets of customers, the boundary may seem to get blurred near the margin. The aspiration of a Barista Lavazza customer like any other cafe customer to move up to the next level of indulgence with quality and ambience like that of Espression would at times make one feel that the boundaries are not clearly defined. However, the case is Barista Lavazza and Lavazza Espression cater to two different set of coffee consumers.
Barista has changed hands many times since inception. Has that affected people’s perception of the company, and its growth?
Barista has changed hands a couple of times since its inception but it has remained true to its motive-that is to offer an exquisite coffee experience to its guest. We saw the same promise while we were in talks for acquiring the company to enter into India. I do not think that changing hands so frequently would have affected people’s perception of Barista. However, I do understand the initial repercussions in the minds of the consumers. It was just a matter of time and people must have realised now that even though Barista changed hands, the idea or the promise to deliver customers an authentic coffee experience has remained intact over the years. In fact, I feel happy that it perfectly matched the Lavazza philosophy of providing “a truly Italian coffee house experience” to our guests.
Indians are known to be tea-drinkers, but the last decade has seen a proliferation of coffee chains in the country. Aren’t you concerned about the market reaching a saturation point?
The last decade has certainly seen a welcome change towards coffee in India. We are always in favour of the variety; with various options available in the market consumers will have a range of options to choose from. The market is far from the saturation point now. We have more than enough space to accommodate more players.
Just like you introduced your international brand Espression in India, can we expect Barista Lavazza to expand globally?
Barista Lavazza is already global; it has presence in South Asia. We have Barista Lavazza cafes in Sri Lanka, Oman, Bangladesh and the UAE. At this point of time we do not plan to increase our global presence for Barista Lavazza as we would be busy in increasing our reach in India.
In some countries, coffee shops often double up as breakfast chains and the concept is a hit. How interesting is this prospect for you in India?
In today’s hectic corporate world when people need to start their day early, they quickly grab a cup of tea or coffee from the nearby coffee shop. While they sip through their coffee, no harm in offering them a bite! The coffee shops abroad have nicely donned up as breakfast chains. It is an interesting concept and a huge hit with customers.
The concept of the coffee shop is gradually catching up in India, at least in the metros to start with. We have foreseen the trend quite early and we have our select café outlets which open early in the morning, at 8 am, so that our customers can have their breakfast at our outlets if the need be. We went a step ahead and have also launched our special breakfast menu across all our Barista Lavazza outlets for the convenience of our guests.
What steps will you take to make India among your top markets? Where does India stand currently?
We are in a phase to consolidate what we initiated in 2007 with the acquisition of Barista Coffee Company and Fresh & Honest. As part of our plans in India, we are making significant investments towards our new plant in Sri City, Andhra Pradesh, which was announced earlier this year. The plant is under construction and we forecast to start operation in the second part of 2012.
Although currently India accounts for a mere 3 per cent of the global turnover of Lavazza, we are confident that the figure will grow to 10 per cent in the next five years and we are working towards that. Barista Lavazza still remains an Indian entity, where you can live the variety of our offer at an appealing price. It has been our international strategy to leverage the Lavazza brand as the global brand. Gradually, all businesses will be under the Lavazza brand. Our café business will help in promoting the Lavazza brand.
