Gloria Jean’s Coffee set to make a comeback in India

Gloria Jean’s Coffee is making a comeback to India with 100 new stores in the next five years. Its new India partner, Jay Jay Capital & Investments, plans to invest up to Rs 150 crore for the expansion.

In its earlier avatar, the Australian coffee brand had entered into a master franchise agreement with Citymax Hospitality of the Landmark Group, but had to shut shop after seven years of operations and a bleeding balance sheet.

The company will now work on a cold kitchen concept and prepare fresh food. The cafés would be about 800-1,500 sq ft with a per-store investment of about Rs 1 crore. It expects the return on investment to start within two-and-a-half years of a store first being set up.

The first set of stores is slated to open in Mumbai and Bengaluru by June 2020.

In 2014, ET reported that the company had annual revenue of about Rs 15 crore in India, after seven years of operations.

The company was founded by Gloria Jean Kvetko in 1979 in the US, and opened its first outlet in Sydney, Australia. It is present in more than 50 markets.

The café chain market in India, led by Café Coffee Day and Tata Starbucks, is one of the fastest growing categories in the consumer food service industry, estimated to grow 6.9% a year to Rs 4,540 crore by 2023 in value sales at constant prices exclusive of inflation, according to market research firm Euromonitor.

Jay Jay Capital, a 15-year-old company that provides liaising and permitting services to oil and gas companies for due diligence, land conversion deals, etc., has entered into a master franchise agreement with Gloria Jean's Coffee. The company also provides similar services to Tata Starbucks, McDonalds, etc., in India.

Gloria Jean's Coffee India’s funds have been raised in the company's founder Jayaprakash M's individual capacity. “We take up brands form a different company and sign the rights. The brand, Gloria Jean's Coffee Hospitality, will be funded by Jay Jay Capital,” said Rohit Malhotra, the chief executive of Gloria Jean's Coffee.

“The coffee market didn't exist 10-15 years ago. Tea is the dominating drink in India, so everybody in the business is still trying to create more awareness about coffee,” he added.

Samir Kuckreja, the founder of hospitality consultancy Tasanaya Hospitality, said the business could do well in its second stint since there was a gap in the market. “They are opening in cities which are already penetrated, so competition could be tough. No coffee chain has tried the fresh food model in India so far. But with The Coffee Bean & Tea Leaf and Costa Coffee being slow, the business may just work,” he said.

India is now the world’s 10th fastest growing market for specialist coffee and tea retail chains, valued at Rs 2,570 crore in 2018, according to Euromonitor.

Earlier this year, Haldiram Bhujiawala has bought The Coffee Bean & Tea Leaf India franchise.

Source: https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/gloria-jeans-coffee-set-to-make-a-comeback-in-india/72962589