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Di Bella Coffee brews second stint in India

Last year, Di Bella had terminated licence agreement with JV company Di Bella India

Viveat Susan Pinto  |  Mumbai 

A year after snapping ties with local partner Sachin Sabharwal, Di Bella Coffee, one of Australia’s leading cafe chains, has begun its second innings in India. Phillip Di Bella, founder of Di Bella Coffee, told Business Standard the company’s parent, Espresso Enterprises, had acquired five per cent stake in a company called AL Global Group, which was licensed to set up stores in India, West Asia, the UK, the EU and Africa. “This company has seven stores, four in Mumbai and three in Hyderabad, which were transferred from the erstwhile joint venture between Sachin Sabharwal and me,” Di Bella said. “We are launching a new store in Mumbai and re-launching two existing stores in the city. By the end of this year, we will add another seven stores, mostly in Mumbai.”

Last year, Di Bella had terminated the licence agreement with joint venture company Di Bella India, claiming Sabharwal had violated the deal by selling his stake (amounting to 70 per cent) to third-party members without notifying him or the parent company. Subsequently, the matter was settled out of court. The 39-year-old Di Bella, ranked among Australia’s youngest millionaires, didn’t indicate who his Indian partner was this time. He said he planned to set up 100-150 stores through the next three years, adding he aimed to expand into Delhi and Hyderabad, too.

“By the end of this year, our headquarters-cum-training-centre will be set up in Mumbai. We are also contemplating a roasting facility in the city by next year.”

To set up new stores and a corporate office this year, AL Global will initially invest Rs 24-25 crore. Further investment would depend on the need for capital, Di Bella said, declining to indicate when the company was likely to break-even.

The Queensland-headquartered Di Bella Coffee already has operations in New Zealand and China and is set to launch stores in Singapore, Thailand, Indonesia and the Philippines in the next few months.

India, Di Bella says, is a key market for his company, as there is a large population aged 20-40 here; this group, he says, frequents cafes and is willing to spend time and money at such locations. “What they want is a good coffee experience at a reasonable price. That is what we will strive to do here.”

Positioned as a premium brand, Di Bella will charge Rs 119 for a large cup of cappuccino and Rs 99 for a medium cup. The prices of rival Starbucks are similar.

“We are not in a race to set up a huge number of stores. Our game plan is to ensure our outlets are profitable, based on the location and ambience we provide,” Di Bella says.

Besides standalone stores, he is targeting outlets at large corporate campuses and foyers of buildings and educational institutes. The move is aimed at reducing real estate costs and ensuring a captive audience.

In recent months, such as Barista and Costa Coffee have seen some stress sue to high rentals and other costs.

While Barista recently saw a change in ownership, the UK-based Costa Coffee, whose franchise operations are managed by Devyani International in India, is said to be scouting for new partners.

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First Published: Sat, September 20 2014. 20:38 IST