Lavazza enhances focus on Coffee Business in India

Lavazza announced to exit from the coffee shop business in India.

August 12, 2014 5:39 IST | India Infoline News Service
Turin-based, Lavazza, known for being Italy’s favourite coffee, announced its decision to exit from the coffee shop business in India. In an effort to realign and restructure its businesses globally, Lavazza has decided to lay greater focus on its core business, which is Coffee. Lavazza, which bought the café brand Barista in 2007, has sold the coffee shop chain with over 190 cafés to Carnation Hospitality Pvt Ltd, a company owned by Rollatainers. Coffee shops will keep providing Lavazza Coffee thanks to a long-term supply agreement between Fresh & Honest Café Ltd. (FHCL) and Barista.

Antonio Baravalle, CEO of Lavazza, said, “The decision to move out of Barista has been taken accordingly with the global business guidelines of the Group to no longer manage directly the coffee shop business. Instead, they will continue to provide Lavazza Coffee to Barista coffee chain thanks to a long-term supply agreement, in connection with a license agreement of the Lavazza trademark. Changes in the market required us to relook at our commercial penetration methods and as a result, Lavazza has decided to concentrate on coffee in the region. In fact, 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. Furthermore, we will continue to develop our presence in the country through the AFH business and through the investments in the Sri City plant, our first and only production facility outside of Italy.”

In the deal, Lavazza has been assisted by Rothschild, as financial advisor, and Desai & Diwanji, as legal advisor.

Lavazza, established in Turin in 1895, has been owned by the family of the same name for four generations. The world’s seventh ranking coffee roaster, Lavazza is the retail market leader in Italy with a market share by value of over 47% (source: Nielsen) and sales of EUR 1,340 million (as of December 31, 2013). The company has five production sites, four in Italy and one abroad, and operates through associated companies and distributors in more than 90 countries. Lavazza exports 46% of its production today.

Lavazza invented the concept of blending - or in other words the art of combining different types of coffee from different geographical areas - in its early years and this continues to be a distinctive feature of all its products. The company also has 25 years’ experience in the production and sale of portioned coffee systems and products and was the first Italian business to offer capsule espresso systems. Today, through ongoing partnerships with an international network of universities and scientific research centers, Lavazza operates four platforms in this segment.

As a family run company, Lavazza has always had a special concern for the ethics and sustainability of its business model. Among the activities promoted by the Lavazza Foundation, established in 2002, is the ¡Tierra! project which, in partnership with the Rainforest Alliance, performs research into achieving the finest end product quality, with a focus on the living conditions of people in coffee producing countries.

Lavazza is the official coffee at the Italy Pavilion, Expo 2015.

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