Tata Starbucks looks to stir a local brew for its India expansion

India still lags global markets like China and the US, where Starbucks has the highest and second-highest number of stores, respectively

Tata Starbucks intends to focus on introducing locally relevant formats and experiences to expand its India presence, the firm’s Chief Executive Officer Sushant Dash said in an interaction. He added that the brand will add a Reserve store — premium outlet with exclusive brews — in Bengaluru, the second such store after Mumbai.

 

Speaking at the launch of the firm’s first drive-through outlet in South India, spanning 2,800 sq ft in Bengaluru's Electronic City, Dash said the country's technology capital was crucial for its India story.  

 

TATA Starbucks operates around eight drive-thrus, including one in Bengaluru. Their first drive-thru opened in Chandigarh, followed by Bhatinda, Ludhiana, Jalandhar, Amritsar, Pathankot, and on the Shimla Highway near Chandigarh. 

"Bengaluru has played a pivotal role in our India journey and continues to be a key market. As we scale, our focus remains on introducing formats and experiences that are locally relevant while offering a beverage portfolio that reflects the evolving preferences of Indian consumers,” Dash said.

 

The store is the US-based coffee chain's 50th store in Bengaluru and 485th in India, as it charts expansion into other regions and territories to reach goal of 1,000 stores by 2030. Mumbai tops the charts with 100 stores. Delhi is second with 75 and Bengaluru is third with 50 stores.

 

Dash noted that India is one of Starbucks’ top five fastest-growing markets globally, despite it being a predominantly tea-drinking nation, with coffee penetration at only 15–20 per cent.

 

"We see immense growth potential. The café market is experiencing strong double-digit growth, driven by two key factors - the evolving preferences of a younger generation eager to explore new experiences, and the country’s expanding economy. This creates a significant opportunity for Starbucks to deepen its presence and cater to the evolving coffee culture.”

 

India's outside coffee market, estimated to reach $2.6 to $3.2 billion by 2028, with a compounded annual growth rate (CAGR)of 15-20 per cent, according to a December 2024 report by Redseer strategy consultants, makes it an attractive opportunity for coffee chains.

 

Nestlé India, which recently opened its Nespresso boutique store in Delhi, noted that a sustained premiumisation trend provides it with a ₹7,500 crore opportunity, adding that its premium portfolio has registered a CAGR of 16 per cent since 2015.