Can you imagine a world in which you walk into your local Barista coffee shop and order a glass of wine instead of a coffee? According to the COO of Barista, that world may not be too far in the distant future. The company intends to invest Rs. 40 crore in opening new outlets and plans to sell wine and beer too. One can only imagine what that would do for the growth of wine in India and for the producers who appear on the menus. But questions remain. Shiv Singh reports.
Currently Barista and Cafe Coffee Day (CCD) together control 85 per cent of the Rs 400 crore organised coffee retailing market. Barista has 230 outlets in India and if it sold wine in each of these outlets, it would automatically become the largest outlet for wine at the retail level.
Sanjay Coutinho, chief operating officer of Barista, told Business Standard, “We have applied for licences in Delhi to begin with. It is a format we follow in Italy as well. We plan to start retailing wine and beer from this month itself and gradually make the format available in other states as well.”
And that’s where the problem may lie. Alcohol licensing costs alone can put your regular coffee shop out of business overnight. The Delhi government in particular charges exorbitant license fees to restaurants and hotels who want to sell liquor on their premises. Now Barista isn’t any old coffee shop and with turnover of Rs. 150 crore and profits of 25% of revenue, they can afford those investments but it doesn’t mean it’ll be profitable. The key question is whether this strategy is designed for all its coffee shops or only certain larger ones in strategic locations where there are greater customers with high spending power. Is it just a test or is Barista committed to this venture? And are the coffee shops supposed to morph into wine bars later in the evenings when they start to empty out? Only time will tell.
Would you drink a glass of wine at a Barista? People in Italy do and it is easy to forget that wine is fundamentally a food accompaniment meant to be drunk during the day as well with meals. Personally, nothing beats a cool Chenin Blanc during the summer months for me. I for one would welcome the presence of wine and beer and the coffee shops though I hope that the presence of alcohol won’t change the atmosphere of a Barista. Maybe they’ll be best off by only selling the wine and beer after 7:00pm.
Indian producers and importers alike are watching this move carefully. Producers would love to have their wines on the menu lists as automatically it’ll give them unrivaled distribution. For the initiative to succeed, Barista will need to offer wines by the glasses and devices like the Oz Wine Bar would be needed. Cheaper Indian wines sans all the import duties have a better chance of appearing on the menus though producers will need to be careful about the storage conditions. Distribution cannot come at any price as it is better not to have a wine available than to have a cooked one that destroys a reputation.