Lavazza’s attempts to gain synergies from Barista seem to be working well so far
Just as Indians developed a growing passion for eating out, they have also developed a phenomenal penchant for coffee. The land of tea drinkers has indeed created an exorbitant café market of Rs.8 billion (according to Technopak Advisors) and the organised coffee chain in the urban market is growing at a breakneck 35% per annum. It is no surprise that the organised coffee chain has been brewing hot over the past few years. But interestingly, successive owners of Barista have failed to take the heat.
The company has been through three changes in ownership in a time span of just six years, and four CEO changes in a time span of five years. A coffee chain started by Amit Judge of Turner Morrison, Barista was sold off to Sterling Infotech Group (65% stake for Rs.300 million) and to the Tatas (remaining 35%). Maverick NRI businessman – C. Sivasankaran, who owned Sterling Infotech, has a penchant for acquiring companies but no intention to hold them for the long run; even the Tatas. So the Tatas sold off their stake to Sterling and finally Sterling sold it to Italian coffee major Lavazza.
“The Indian coffee market today is emerging as one of the biggest markets in Asia. We wanted to be here and our research team indicted that Barista is the best,” announces Dan D. Labar, President, Barista Coffee Co. Ltd. The market buzz is that Lavazza injected a cool $120 million in Barista for the acquisitions, though Labar refuses to officially comment.
Just as Indians developed a growing passion for eating out, they have also developed a phenomenal penchant for coffee. The land of tea drinkers has indeed created an exorbitant café market of Rs.8 billion (according to Technopak Advisors) and the organised coffee chain in the urban market is growing at a breakneck 35% per annum. It is no surprise that the organised coffee chain has been brewing hot over the past few years. But interestingly, successive owners of Barista have failed to take the heat.
The company has been through three changes in ownership in a time span of just six years, and four CEO changes in a time span of five years. A coffee chain started by Amit Judge of Turner Morrison, Barista was sold off to Sterling Infotech Group (65% stake for Rs.300 million) and to the Tatas (remaining 35%). Maverick NRI businessman – C. Sivasankaran, who owned Sterling Infotech, has a penchant for acquiring companies but no intention to hold them for the long run; even the Tatas. So the Tatas sold off their stake to Sterling and finally Sterling sold it to Italian coffee major Lavazza.
“The Indian coffee market today is emerging as one of the biggest markets in Asia. We wanted to be here and our research team indicted that Barista is the best,” announces Dan D. Labar, President, Barista Coffee Co. Ltd. The market buzz is that Lavazza injected a cool $120 million in Barista for the acquisitions, though Labar refuses to officially comment.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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