Sales boom at Barista coffee houses as high spending urban Sri Lankans socialise

November 24, 2006 (LBO) – Young urban Sri Lankans are steadily patronising India’s Barista Coffee Co.’s, chains in Colombo, for a piece of cheescake and sip cappucino, while they surf the Internet, play board games and browse through magazines, officials said.

“Our aim is to add two stores every year. We managed to do that this year, and hopefully next year in the outskirts of Colombo adding services like a drive through for busy customers.”

Business is booming for this three-year old Indian joint venture, despite runway inflation and regular roadblocks in the city for security reasons.

“We have done quite well here, in a heavy tea drinking country, with our three year operation due to make 65 million rupees worth of sales this year,” Ajith Dias, Chairman of Barista Coffee Lanka (Pvt) Ltd said Friday.

Dias, former Sri Lankan cricketer Aravinda de Silva and businessmen Aslam Omar and Dian Gomes jointly own 49 percent, while the Indian partners retain the 51 percent stake.

Coffee sales have not really stirred the storm they were expected to be. But this has not deterred the investors from stretching their cafes outside Colombo city.

Set up in 2002, total investments to date exceeds 50 million rupees, and Barista’s added its fifth store in Sri Lanka’s capital of Sri Jayawardenepura, catering to young professionals who live away from the Colombo city lights.

“Barista’s is a place to socialise, do a few business deals, listen to music, surf the net or read, over a coffee and a bite (food),” says de Silva. “Its also a place where you can bring a date and play board games with your friends.”

The orange and brown painted coffee house is expecting steady business from its neighbour, the 300-seater HSBC call centre and also plans to offer a drive through services for motorists crawling through traffic on their way home.

In India, call centres have been one of the growth triggers for Coffee houses, as they also cater to a new breed of night time workers.

De Silva says the Barista concept relies on the power of the youth and their increasing disposable income.

“People working in the call centres, for instance, start work at a young age, sometimes straight after school and they have the purchasing power,” de Silva says.

“We are pitching ourselves slightly cheaper than upmarket restaurants, a clean place, that’s away from the city, because people are sometimes deterred from going to Colombo to meet up due to the heavy security and traffic,” Dias said.

The firm’s general manager Athula Nanayakkara says around 250 people patronise their four stores daily, to try out various coffee blends, soft drink concoctions and other beverages mingling their selections with snacks and mini-meals.

Bulk of its sales are brewed from coffees, teas and smoothies.

“Though we sell a lot of savouries, Sri Lankans seem to prefer cheesecakes and cappucinos, in fact we sell around 10 kilos of cheesecakes daily through our four stores,” Nanayakkara said.

With the fifth store in Rajagiriya, Barista has also put in a new kitchen to expand their food range, which was earlier supplied through third parties.

Dias sees growth in the business, as changing lifestyles and work habits force people to entertain away from homes.