India set to be on Starbucks' top-5 list

Tata Starbucks, the 50:50 joint venture of American coffee major Starbucks and Tata Global Beverages, is looking at a mix of high-street outlets, stores in malls and even drive-ins across India. “We will look at all the possible formats,” Avani Saglani Davda, CEO, Tata Starbucks said at the launch of the company’s seventh India store in the capital today. It is also exploring opportunities to open Starbucks stores in colleges and university campuses with attractive pricing.

Pointing out that Starbucks is present in 62 countries, Vietnam being the latest, officials said India would be among the top-five markets. The US, Canada, Japan, China and the UK are the top-five in terms of revenue.

Starbucks’ first India store opened in Mumbai in October, and the city now has four. Last month, two more stores came up at the international airport in Delhi. Sources said the company was planning a store at a Saket mall in Delhi as well.

The company refused to give target numbers for the stores it was planning in India. When asked if India would have 500 stores or more in the next 10 years, Davda said, “wish we had the crystal ball”.

Offering an Indian ambience and coffee sourced from India, Tata Starbucks is talking of providing locally-relevant innovations. Officials explained Starbucks had been sourcing coffee from India for many years and it would do this for its outlets in the country. On how the company would offer an international experience with coffee sourced from the Tata Group, John Culver, president, Starbucks Coffee China and Asia-Pacific, said, “We maintain the international Starbucks standard by the way we roast it.” While beverages offered at the outlets in the country are made from coffee sourced from India, it sells packaged coffee from Latin America and other countries as well.

In the years to come, things may get more international in India. “Over a period of time, we will offer a wide variety of global representation of the brand,” Culver said. That may mean global sourcing of coffee for beverages served in Indian outlets and also offering an international look and feel about the stores. But Davda pointed out that the raw finish that the Delhi store is wearing is very global.

Listing out supply chain issues as a challenge in India, company executives played down availability of suitable real estate as a stumbling block. “Rental is always part of the retail strategy anywhere in the world,” said Davda.

While the regulatory regime would have permitted Seattle-based Starbucks to come on its own into India, it decided to forge a partnership with the Tatas, instead. “We preferred to come with the Tatas,” according to Culver. Starbucks has no intentions of franchising the brand, he pointed out.