Australia’s Di Bella Coffee to step up investments in India

Australia’s Di Bella Coffee has committed a budget of ₹70 crore towards expanding its stores and looks upon Starbucks as its main competitor in the premium coffee retail segment.

After Mumbai, the $40-million retail chain is tapping into new markets like Delhi and Bengaluru with a total store count at 20 by the year-end.

After entering the country in 2011, Di Bella had a tumultuous ride changing its local partner and shutting down outlets in cities like Hyderabad.

“India is our third largest market and we are optimistic about the retail business despite challenges like regulation and different State taxes.

“We are profitable here since we have a revenue share model with no minimum guarantee with our landlords and do not have to pay rent like Starbucks does for most of its outlets,’’ said Phillip Di Bella, Founder & Managing Director, Di Bella Coffee.

With international coffee retail chains like UK’s Costa Coffee and Barista still struggling in India, Di Bella claims its biggest competitors are CCD (Cafe Coffee Day) and Starbucks at the mass and premium end of the coffee retail segment.

“We did make mistakes in India by choosing the wrong partners in the past.

“But now, we have the right product, partner and real estate deals. There is an uptake in the coffee retail business here,’’ added Dibella.

Being a premium brand with pricing almost similar to Starbucks, Di Bella Coffee also competes with the American coffee company in its home market in Australia.

“In Australia, Starbucks did not pioneer coffee retail and has shut down more than 100 stores since it entered in 2000.

Today, it is certainly not the market leader but independent coffee chains which dominate Australia’s coffee retail market,’’ observed Di Bella.

Besides, Australian coffee chains like Gloria Jeans, which had also exited the Indian market in the past, is also one of the dominant players in Australia today.

In India, Di Bella is keeping its stores size at 1,200 sq ft with table service unlike Starbucks’ self-service model.

“We want to address the emerging middle class in India who expect to be served. Our stores have been made to suit the needs of the market,’’ he added.

With a 20 per cent stake in the Indian subsidiary, Phillip Di Bella is also contemplating increasing his share in the company.

“I would be happy to double my stake in the Indian company to 40 per cent since rankings of the country will go up as our largest market,’’ he said.

Di Bella Coffee is targeting revenues of ₹1,000 crore in the next five years.

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