Devyani extends partnership with Costa Coffee

Devyani International Limited (DIL), largest franchisee of Yum Brands in India, on Sunday announced the extension of its partnership with Costa Coffee. entered into a revised development agreement for its existing Costa Coffee business on August 14, 2021, following which DIL has been granted development rights across India in a phased manner. This agreement has initially granted development rights for a period of five years and extendable from time to time subject to meeting of development and contractual obligations, a statement issued by the company said.

While in 2018, Coca-Cola acquired Whitbread Plc-owned UK cafe chain Costa Coffee in a global $5.1-billion buyout, in India Costa Coffee has been operated by RJ Corp which is PepsiCo’s biggest and long-standing, exclusive bottling partner. India is among the few markets in which Costa Coffee is aligned directly with a PepsiCo bottling partner.

DIL is also among the largest operators of chain quick service restaurants KFC and Pizza Hut, and operate 735 stores across India, Nepal and Nigeria as of June 30, 2021. Its business is broadly classified into three verticals that includes stores of KFC, Pizza Hut and Costa Coffee. DIL’s other businesses include Vaango and Food Street.

DIL operated 44 Costa Coffee stores as on June 30, 2021. The company currently operates two formats of Costa Coffee stores – full retail stores at high-street locations and malls, and branded kiosks at airports, hospitals and food courts at highways.

Coca-Cola’s global buyout of Costa Coffee sets it in direct competition with cafe giants such as Starbucks, and is seen as a bid to hedge its risks in a sluggish soft drinks market and broaden its portfolio beyond sugary drinks.