Starbucks Expands Footprint in India

With over 100 stores spread across the metros of Mumbai, Pune, Hyderabad, Chennai, Delhi, and Bangalore over the past five years, Starbucks India, a 50:50 joint venture between India’s Tata Global Beverages and Seattle-based Starbucks Corporation, is planning to add 24 new stores this year. CEO Sumitro Ghosh said, “After we enter Kolkata, [early 2018] we are looking at tier II cities to open new stores and are in the process of evaluating them.”

When asked how much of the coffee served in the stores is sourced from India, Ghosh said, “Roughly, Espresso accounts for over 60 percent of our beverages. Every Americano, Latte, Cappuccino and all of our Frappuccinos are based on the Espresso beverage, which is made from Indian coffee beans sourced from Tata Coffee plantations in Coorg. The Alphonso Frappuccino, introduced in India in 2014, is now offered in Starbucks markets outside India.

Starbucks Coffee signboard

The India Estate blend that is sold in whole bean form over the counter in the company stores in India is also being sold online in the U.S. and other countries. Tata Nullore Estate’s coffee became the first Indian coffee to be roasted and sold at the company’s home city of Seattle in 2016, which was later rolled out across other Starbucks stores in the U.S. A second Indian estate-specific coffee has been selected to be sold in the U.S., and will soon be announced,” said Ghosh.

Coffee is becoming more of a fashion statement among the young and upwardly mobile, and the Chain Coffee Cafe segment has been growing in India with both Indian and International brands joining it: Starbucks, Dunkin Donuts, Cafe Coffee Day, Barista, Costa Coffee, and The Coffee Bean and Tea Leaf. The chain cafe market is estimated to be 36% of the total organized market by 2020, and is projected to grow at a CAGR of 20%.

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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