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Lavazza exits coffee shop business

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MUMBAI: In an effort to realign and restructure its businesses globally, Turin-based, Lavazza, has announced its decision to exit from the coffee shop business in India.

 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, a company owned by Rollatainers. Coffee shops will keep providing Lavazza Coffee thanks to a long-term supply agreement between Fresh & Honest Café (FHCL) and Barista.

Lavazza CEO Antonio Baravalle said, “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 per cent as per Nielsen and sales of EUR 1,340 million as of 31 December 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 per cent of its production today.

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