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Di Bella’s second stint in India: Something different to offer


Practically starting from scratch again, Di Bella C0ffee was left behind in India’s coffee cafe race after an acrimonious fallout with one Indian partner, losing four years along the way.

Philip Di Bella

Philip Di Bella

In the last four years, Phillip Di Bella, the outspoken founder of Di Bella Coffee, a coffee roaster and retailer, has been almost a mute bystander in the explosive market for his products in India. He has managed to open barely a dozen stores, had an acrimonious fallout with one Indian partner, had an out-of-court settlement with him and had to start practically from scratch. Even as he has built Di Bella into a near 1,000-store chain globally he sold his Australian business late last year to the Retail Food Group (RFG), owner of the Gloria Jean’s Coffeehouse chain, for USD 47 million the India opportunity has seemingly slipped away. In the time he’s struggled to keep his India business afloat, global giant Starbucks has entered India and built a 71-store presence, domestic giant Cafe Coffee Day (CCD) is up to over 1,500 stores and is eyeing its own overseas expansion.

It is surprising then that Di Bella, 40, thinks he can breathe new life into the India business. Dressed in an outsized black shirt and blue jeans, the bald and hulking Di Bella bristles at the suggestion that he doesn’t stand a chance in India (Di Bella joined RFG on a full-time basis after selling out, with international expansions one of his key mandates). “We have something different to offer Indian consumers,” he says. “We offer them table service, superior coffee and freshly made food, unlike our rivals who heat and serve customers.”

New and Improved Di Bella, the son of Italian immigrants to Australia, says his focus in is on three things: people, coffee and education. Di Bella went from a promising option for people to hang out to an also-ran in a market dominated by CCD and more recently Starbucks. The man himself splits the blame for Di Bella’s India stumble between erstwhile partner Sachin Sabharwal and his own inability to manage operations more closely.

“We took our eyes off the ball,” Di Bella admits. “We didn’t keep an eye on the quality, we were slack on rentals and store atmosphere and had differences over strategy.”

“We have something different to offer Indian consumers.”

While the two sides bickered for almost a year before reaching an out-of-court truce, Di Bella is frosty with his assessment of his erstwhile business partner. “He didn’t measure up and we had to split,” he claims . Sabharwal was unreachable on his mobile phone and didn’t respond to a text message. The landline numbers listed against his new business, Good Co. Coffee, were inoperative.

while another store, tucked into a bookshop in the trendy neighbourhood of Bandra 5 km to the north is a regular for Bollywood stars living around the corner. In Hyderabad, too, stores are in the swish boroughs of Banjara Hills and Jubilee Hills.

Rahul Leekha, Director, Di Bella India

Rahul Leekha

In the store, Di Bella is the cynosure of all eyes. He sits heavily on a chair in the cafe, discussing his business with new partner Rahul Leekha, a co-promoter of Electel, his new India partner. “Coffee chains are the place to hang out in India…alcohol is too expensive in India and there are few other options for youngsters to relax,” he says.

The right partner, he says, can make or break your business. He points out to Starbucks’ failed initial attempt to bulldoze its way into the Australian market, a country with strong regional players that have understood local tastes and preferences and built a strong presence. “We think we have got ourselves a partner to help us grow our business here,” he adds.

Shortly after, he proceeds to his master class (not missing minute details like a clean work platform, which he proceeds to swab himself ), before launching into a high-energy chat. His temper briefly shows itself, when a lapel mike misbehaveshe proceeds to rip it off and continue, unamplified. “I am a big guy and I am Australian, I am sure you can hear me,” he quips.

People who have worked with and around Di Bella offer contrasting opinions of one of Australia’s richest and most outspoken businessmen. In the last couple of years, the diamond ear studwearing coffee magnate has had a business award taken away, gotten into brawls with judges and called out the highly publicised Fair Trade certification system for re-investing its earnings in anything but the business.

Then, in November 2014, Di Bella lost an appeal to register a tagline ‘we know coffee’ in Australia. Unlike many other brands, Di Bella doesn’t use intermediaries to source his beans, instead buying them directly, much to the chagrin of some. “Weekend rates (for coffee pickers) are a vital source of income for 1.5 million Australians, many of them low-income earners,” says a statement by Queensland United Voice, an advocacy group. “Phillip Di Bella’s attacks on weekend rates are unfair and unjustified …. Weekend rates need to stay. I will vote with my feet and avoid Di Bella products.”

Di Bella started his career working with a coffee retailer, while he was still in college in Brisbane, Australia performing an assortment of jobs (“I was the best damn dishwasher you could find,” he says, throwing his arms out and laughing aloud), before he decided to strike out on his own. He started out with a borrowed roaster and a single store and, over the last 12 years, has built his business from the ground up.

Not Just a Coffee Retailer Despite his attitude, Di Bella is known not just for being a coffee retailer, but also a top roaster of beans too. When he started out in Australia in the early 90s, people were just discovering coffee shops and beginning to socialise in them. He believes that in India too the industry is just at the beginning of this same growth curve. “Coffee shops are the cheapest and most affordable place to hang out,” Di Bella says.

“We think we can be a strong alternative to the existing options in the market.” Rivals in India aren’t quite shaking in their boots, faced with the threat of a (potentially) new and improved Di Bella. “Many brands have come and gone or are in the process of exiting the Indian market,” says CCD CEO Venu Madhav.

“We took our eyes off the ball.”

“The market is difficult to deal with, rentals are high and it is quickly evolving into a twohorse race.” His chain has made many tweaks to its model, with varying success. It has overhauled its F&B offering, using social media to offer up an all-new menu (food accounts for half of its business) and extending its retail presence into multiple formats in office complexes and on the highway, even as another upscale option Coffee Day Square, was less successful.


For its part, Starbucks has upturned its global strategy of being primarily a takeaway coffee chain and gets over 3/4th of its orders from in-store sales.

“We are committed to our plans in India and expanding to smaller towns is part of this plan,” Manmeet Vohra, marketing chief for the India operations, says.

Despite these odds, Di Bella plans to forge ahead with his India foray, even if well-entrenched rivals offer him little chance of success. The chain that bears his name plans to have 50 outlets in India (each unit costs around INR 75 lakh to set up) in the next three years and based on the initial feedback this number could be increased.

With this new, measured approach to India’s booming market for coffee cafes, Di Bella hopes his second stint will be markedly more successful.

Source: Economic Times

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