Aroma works for Barista

Established in 2000, Barista Lavazza this year completes a decade in the cafe business in India. However, Barista Lavazza has never done aggressive above-the-line marketing in the 10 years of its business. Despite this, the company has not only managed to maintain its brand identity but also register a healthy 25% year-on-year growth rate in terms of revenue during 2009.

In an era where companies spend millions of rupees to ensure their brands get maximum visibility and grab the attention of their customers, one company that has stayed away from the 30-second commercial and yet made it big is Barista Lavazza.

Established in 2000, Barista Lavazza this year completes a decade in the cafe business in India. However, Barista Lavazza has never done aggressive above-the-line (ATL) marketing in the 10 years of its business. Despite this, the company has not only managed to maintain its brand identity but also register a healthy 25% year-on-year growth rate in terms of revenue during 2009.

"We don't believe in advertisements," says Barista Lavazza chief operating officer Sanjay Coutinho. "We feel that three factors make a brand—letting the consumers experience the brand; the ambience, service and quality of the product; and the most important thing, value for money. And these are the things that Barista has always been focusing on," he added.

In 2009, the company had spent a mere Rs 2.5 crore on marketing, which were essentially below-the-line activities. "The amount was used for in-store promotions and communication, visual merchandising elements, marketing collaterals like menus, facades, danglers, posters, tray mats, fliers, etc, online and digital campaigns, promotion around new launches and on research and development in particular," said Barista Lavazza head (marketing and product development) Saurabh Swarup.

For Barista Lavazza, its espresso bars have been its storyboard. The posters, tent cards and ambient graphics inside each espresso bar does all the talking, in a voice that is witty, warm and welcoming and the rest happens through word-of-mouth. "Our belief is that the store is our brand ambassador and word-of-mouth promotion through guest experience is the way forward," said Swarup.

"Customers will always find something new to look forward to at Barista Lavazza, be it special menus created for Valentine's Day or the Friendship Jam which involved exciting contests and activities for an entire week. There's the occasional live music performances, tarot card readings, handwriting analysis sessions, makeovers and caricature artists to enhance the overall guest experience," Swarup added.

In recent times, innovative product placement strategies have also allowed Barista Lavazza Espresso Bars to feature in commercials and feature films such as Wanted. Apart from this, special merchandise is launched on special occasions such as New Year, Diwali, Christmas, Valentine's Day and Friendship Day. The merchandise range includes coffee mugs, insulated and designer sippers, coffee makers and jars besides trendy sport sippers, business card holders and steel key chains.

"We have also been focusing on the digital space as our target audience sits there. We also tap cross-promotion plans and tie-ups with other retail stores. Retail stores are assets as it gives more visibility and helps in building awareness. Besides, engagement in stores like guitar, scrabble and chess board give people a chance to unwind and feel at home," Swarup said.

Barista Lavazza has changed hands, as many as four times in the last 10 years. In 2003, Tata Coffee picked up 34.3% stake in the company, with C Sivasankaran of the Sterling Group acquiring the remainder.

In 2007, Lavazza acquired the company and made Barista its wholly-owned subsidiary. But these changes have not prevented the brand from connecting with its customers. Coutinho says, "During the change of management, there was a lull in the business. However, despite the change of ownership, the brand identity was maintained and as the name was retained Barista became synonymous to coffee in India."

Of the Rs 500-crore coffee bar market in India, today Barista Lavazza has around 18-20% share. The company gives credit to changing lifestyles for the growth in its café business.

"As people are traveling more and with business to business meets and 'let's meet up over coffee' culture picking up in a big way, the business is thriving," Coutinho said. On the way, the company has learnt a lot about coffee consuming culture in India. The first outlet was opened in New Delhi and then in Mumbai, a tea-drinking market. "It was an experiment to open an outlet in the North, and the experiment worked for us," he remembers.

Barista now plans to focus on metros and mini-metros with the aim of opening 300 outlets in the next four years. Apart from tie-ups with Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd to open outlets near their gas stations, the company is serving coffee on seven trains of the Indian Railways. Barista has also entered the highway café business.

"The USP (unique selling proposition) of a highway café is hygienic washrooms, play zone for kids, ample parking space and ideally near a gas station so that it becomes a one-stop shop. As for the menu, it works if the food is local and elaborate. We tried experimenting at Bangalore-Mysore highway with idli and vadas and it worked," Coutinho said. Barista followed that up with highway cafes on the Delhi-Chandigarh highway, where it serves parathas and biriyanis.