Barista Lavazza finally sold

One of the most famous names in the coffee industry is, finally, pulling out of India.

Lavazza had been enduring a troubled time on the subcontinent but after agreeing to sell their coffee chain Barista Lavazza, they are now free of an entity that has been a heavy millstone around the company’s neck for a good few years now.

The Italian based business will now focus on its core coffee business.

Barista Lavazza sold

Lavazza, which bought the chain Barista seven years ago, has sold the flagging coffee shop to Carnation Hospitality Ltd, who is owned by the packing company Rollatainers. The deal was officially announced yesterday, though both parties refrained from making the value of the agreement public.

“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,” said Lavazza’s chief executive Antonio Baravalle in a prepared statement to the press.

The name of Lavazza will not be disappearing entirely from the chain as the family owned business, which was founded in 1895, will continue to supply coffee to the 190 Barista outlets as part of a long-standing agreement.

“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,” Baravalle added.

Prolonged losses

Lavazza has been trying to offload the struggling chain for some time now. Earlier on this year a potential takeover broke down when the company failed to agree terms with the India Hospitality Corp. Despite the coffee sector in India growing at a substantial rate – one that is very appealing to external entities such as Starbucks, Costa Coffee and Dunkin’ Donuts – Barista, one of the first established chains in the country, has seen its revenues drop and its losses increase.

Notwithstanding some restructuring work, Barista Lavazza recorded losses of nearly $2m for the two year period between March 2011 and March 2013 and revenues had dropped by $2.5m to $13.3m.

It is believed, at this moment in time, that the newly christened Barista will keep all remaining 190 stores open as their new owners try to solidify their status.

Alongside the contract to sell coffee to the chain, Lavazza will continue to monitor and develop their presence in the country “through the investments in the Sri City plant,” Lavazza’s first production facility outside of Italy, said Baravalle.