American coffee giant to open 50 stores this year; first ones in Delhi and Mumbai

Starbucks — the iconic American coffee house brand that helped make the beverage ‘cool' worldwide, spurring imitators but also critics — will soon set up shops across India in association with the Tata Group. The joint venture will set up around 50 stores during this calendar year with the first one likely to open in the second half of the year.

Tata Starbucks Ltd., an equal joint venture, will own and operate Starbucks cafes which will be branded Starbucks Coffee ‘A Tata Alliance.' The first retail stores will come up in Delhi and Mumbai.

In a separate sourcing and roasting agreement between the two companies, Tata Coffee (a subsidiary of Tata Global Beverages) will roast coffee to supply Tata Starbucks and to export to Starbucks Coffee Company.

The Tata Starbucks joint venture will operate cafes under the Quick Service Restaurant category. The joint venture will enable an expanded range of beverage offerings for Indian consumers, starting with a premium tea product, branded Tata Tazo.

With more than 17,000 stores globally, Starbucks is a premier roaster and retailer of speciality coffee around the world.

CCD not shaken

Bangalore correspondent reports:

Coffee retail leader Starbucks' anticipated arrival would not result in any changes in strategies or pricing at India's leading coffee chain Café Coffee Day (CCD).

Strategies

“Our strategies will be guided by consumers and not by competition. Even in case of pricing we will be guided by consumers,” K. Ramakrishnan, President (Marketing) of CCD, told The Hindu. “CCD has set the benchmark for the industry so far, and we hope we will continue with it in future also,” he added.

The company's strategy, he said, remained committed to growing to 2,000 cafes by the end of 2014. Of the roughly 2,000 coffee café outlets across the country at present, CCD's share is a little over 1,200.

Welcoming competition in the industry, Mr. Ramakrishnan said: “The arrival of competition (Starbucks) is an opportunity for the industry to grow. Industry and the market will be built on more activity and more international players, which is good.”

According to an industry source, the news of Starbucks coming to India was not something new, since it was making the rounds ever since Starbucks started discussions with Tata Global Beverages, the parent company of Tata Coffee, nearly a year ago. Current players would have moderated their strategies keeping in mind the anticipated arrival of the leading coffee chain.