Brewing at Tata Starbucks: Double-digit growth, premium store, masala chai

Tata Starbucks, a 50:50 joint venture between the Tata group and Starbucks, is witnessing double-digit growth after the Covid pandemic as customers return to its outlets with restrictions having eased out.

“Demand has been good and recovery has been good after the pandemic; we have been growing sequentially,” Sushant Dash, CEO, Tata Starbucks told Business Standard.

Despite the Covid pandemic, Tata Starbucks opened 50 stores last year in India and is currently present in 36 cities. Its total store count has crossed the 300-mark, ten years after the coffee chain’s entry into the country.

However, Dash did not elaborate on the number of stores it plans to open in the coming quarters.

“India absolutely is an important market for us. If you look at growth of stores over last year, it's one of our fastest-growing markets,” said Michael Conway, group president, International and Channel Development, Starbucks.

He said: “But make no mistake about it, this is still an evolving and growing market; it's more tea than coffee. But we've seen coffee consumption grow quite well over the past few years.”

Marking its 10th year anniversary, Tata Starbucks opened its first Starbucks Reserve store in Mumbai to offer a relatively premium experience and hand-crafted beverages, which include vanilla bean latte, dark chocolate mocha, Americano con crema, hazelnut bianco latte, shakerato bianco, shakerato bianco deconstructed, sparkling espresso with mint, and cortado.

In the Asia Pacific, Starbucks has 142 Reserve stores.

Tata Starbucks recently launched a pilot and has started to offer a further Indianised menu with masala chai, filter coffee, and more bite-sized items, but the company is still waiting for another three months before it maks a final decision. So far, it has offered a more Indianised menu only in four cities -- Bengaluru, Indore, Bhopal, and Gurugram.

“I think in the early days, it's more about checking and adjusting and seeing where the pins go. I would like to wait for that period, because it's still very early days or just three months,” Dash said.

Conway said Tata Starbucks is working on getting the right mix of local cuisines and local insights. He said: “It's still early, but I think that innovation is what gives me excitement around our ability to continue to bring more customers to Starbucks.”

In the April-June quarter, Tata Starbucks saw strong growth of 238 per cent on a low comparator due to normalised store operations with fewer restrictions, Tata Consumer Products said in its investor presentation. In FY22, its revenue from operations grew 76 per cent to Rs 636 crore.