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Interview: R Shivashankar, Director South Asia, Lavazza

“We believe both the brands Lavazza Espression and Barista Lavazza would definitely co-exist due to the different set of consumers they cater to. Barista is more of an Indian brand, while with Espression we will bring in the international taste”

Surbhi Chawla | Delhi | February 28, 2012

With Starbucks chalking out its India strategy along with the Tata Group, Indian retail chains are gearing up for the stiff competition in the near future. Barista Lavazza (earlier known as Barista), pioneered the café culture in India back in February 2000 when it kicked off its operations in the country. Since then there have been plenty of changes in the coffee retail market in the country.

In 2007, Barista was acquired by Lavazza, an Italian coffee retail giant, to form Barista Lavazza. Both Barista and Lavazza brands continue to co-exist. Going forward, will the company bank on this strategy or will it change course? To know more about its branding and marketing initiatives, BestMediaInfo spoke to R Shivashankar, Director South Asia, Lavazza. Excerpts:

It has been about four years since Lavazza acquired Barista. What changes have happened since then?

The international strategy of the company is to leverage the global brand Lavazza. We want to introduce the brand to Indian customers through a smooth shift – from 100 per cent Barista to 50:50 Barista Lavazza to 100 per cent Lavazza.

The time so far has been quite satisfying and a learning for all of us. Since its inception, Barista has changed hands a couple of times but it has remained true to its objective of offering an exquisite coffee experience to its guests. Lavazza saw the same promise while they were in talks for acquiring the company to enter India. It was just a matter of time and our patrons must have realised now that even if Barista is now Barista Lavazza; the idea or the promise of delivering an authentic coffee experience has remained intact over the period. In fact, I feel happy that it perfectly matched the Lavazza philosophy to provide “a truly Italian coffee house experience” to our guests.

Like the parent company Lavazza, Barista Lavazza believes in enhancing customer experience and, with their slew of consumer engagement activities, bring customers closer to their favourite café chain and enhance the overall coffee drinking experience.

There is a Lavazza store in Delhi’s Connaught Place. Are there more such exclusive Lavazza stores coming up in 2012? If yes, will you be converting your existing Crème outlets to Lavazza or will it be a mix of new openings and some conversions? There are also rumours regarding a brand overhaul being on the cards from Barista Crème to Lavazza…

Lavazza Espression is Lavazza’s ambassador around the world. It is Lavazza’s signature specialty format which was unveiled for the first time in India in Delhi in September last year. At the Espression outlet consumers can experience the quality of Italy’s best known coffee over genuine flavours. Creativity and eye for design converge at this format. It offers top quality products in a warm, welcoming environment and is a landmark of aficionados of authentic Italian coffee.

Espression has 30 stores worldwide. In India, Lavazza Espression will definitely continue to co-exist with Barista Lavazza and Barista Lavazza Crème. And, the company is targeting to open around 30 Lavazza Espression stores in the next three years.

We believe both the brands Lavazza Espression and Barista Lavazza would definitely co-exist due to the different set of consumers they cater to. Barista is more of an Indian brand, while with Espression we will bring in the international taste.

You would notice the difference and co-existence of both the brands in our expansion plans. While we have over 160 Barista Lavazza outlets in both metros and tier II and tier III towns, Espression would have fewer outlets with the focus being on metros.

While there is a clear-cut demarcation between the two sets of customers, the boundary always seems to blur at the margin. The aspiration of a Barista Lavazza customer, like any other cafe customer, is to move up to the next level of indulgence with quality and ambience like that of Espression.

Chains such as CCD seem to be on a growth overdrive, and are probably gunning to be around in every nook and corner. In such a scenario, what is Barista Lavazza's strategy?

We are in a phase of consolidating what we initiated in 2007 with the acquisition of Barista Coffee Company and Fresh & Honest. In particular, the coffee shop business supplements our overall business strategy in raising the profile of the company and to reach out to our target segment.

As part of our plans in India, we are making significant investments towards our new plant in Sri City, Andhra Pradesh, which was announced earlier this year. The plant is under construction and we hope to start operation in the second part of 2012.

Although currently India accounts for a mere 3 per cent of the global turnover of Lavazza, we are confident and are working towards growing to 10 per cent in the next five years. Indians have always liked milk-based beverages, and coffee works very well for us.

As I said earlier, we are determinated about both the brands. We have currently over 160 stores in India with the Barista Lavazza signage.

Lavazza Barista still remains an Indian reality with an extensive presence and is a combination of an Italian experience in an Indian environment. It has been our international strategy to leverage the Lavazza brand as the global brand. Gradually, all businesses will be under the Lavazza brand. Our café business will help in promoting the Lavazza brand.

What are the factors that Lazazza keeps in mind before opening an outlet and how do they differ for your three formats – Lavazza, Barista Creme and Expresso Bar?

Since the time Barista Lavazza was born, customer satisfaction has been an integral part of us. Our efforts have been to offer something special to our guests while providing them with “A truly Italian Coffee House Experience”. An in-depth market analysis of the changing consumer tastes and preferences is conducted before launching any new offering in our outlets.

Your menu too has been fine-tuned a lot of times, you keep bringing in innovations according to the season and special occasions. So, what is the strategy that goes into finalising the F&B menu?

Launching any new product or menu in the market is a major challenge. Modern retailing is all about directly having "first-hand experience" with consumers while giving them a warm and friendly environment that they would like to enjoy over and over again. All our launches are based on international trends, guest feedback and internal research.

We will continue to innovate along these lines and launch products that delight our guests. Our offerings are already accepted with a great response, and hence it’s our core responsibility to keep developing great products and offer the best of all to our guests.

What is the target group that you are reaching out to and how are you promoting yourself currently?

Barista Lavazza is positioned as the pioneer of the Indian café culture. We stand as the true symbol of rich and finest Italian culture and espresso coffee. Our guests are coffee lovers above the age of 25 years who are looking not just for a cup of coffee but beyond. Our chain of Espresso bars delivers an original Italian coffee experience in a warm, friendly, relaxed environment and we aim to provide a comfortable place for people to unwind over interesting conversations and a cup of coffee.

What will be the marketing strategy for Barista Lavazza in 2012?

Like the parent company Lavazza, Barista Lavazza believes in enhancing customer experiences and with their slew of consumer engagement activities, bring the customer closer to his or her favourite café chain and enhance the overall coffee drinking experience.

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