A lot is happening over coffee. The Indian consumer, once a staunch tea drinker, is now slowly experimenting with coffee, and the market is witnessing some churn.
Barista on the lookout for its fifth owner
Amtek, the fourth owner of Barista Coffee, is facing a cash crunch. A little over a year after it acquired the Italian chain, Amtek is looking for a new owner. As far as the coffee market is concerned, most players are struggling to make profits. Hence Amtek is looking for an exit as it has already defaulted a repayment of Rs.800 crores and now intends to offload non-core assets and exit non-auto businesses.
Most of Barista Coffee’s 170-plus stores are loss making, though in terms of store count, Barista continues to be the country’s second-largest cafe chain after Cafe Coffee Day. Other big players in India’s estimated Rs 1,400-crore cafe business with over 3,100 branded outlets include Starbucks and Costa Coffee.
Cafe Coffee Day goes public
Cafe Coffee Day, on the other hand, made its debut on the capital markets recently, Coffee Day Enterprises Limited (CDEL), and has aggressive plans to grow at an annual rate of 18 per cent on aggressive expansion in its core business. “We are looking at 15-18 per cent annual growth in our business. We have already improved in the second quarter and this year will be profitable,” CDEL Chairman and Managing director VG Siddhartha told PTI. The coffee chain also expects to post profit in the current fiscal on higher footfalls and increased consumption. Meanwhile, the company’s shares debuted on a weak note, opening at Rs 313 against the issue price of Rs 328 on the BSE while it opened at Rs 317. As per reports, CCD had as of Dec 2014, around 1,480 outlets and had plans to add 150 more stores by 2016. The recent infusion of capital may help it achieve its goals.
The chain cafe market in India is worth Rs1, 820 crore . This constitutes around 27% of the overall café market valued at Rs 6, 750 crore ($1.1 billion).