Nestle plans to sell Starbucks ready-to-drink coffee in India retail market

Nestle S.A., the world’s largest coffee company, is exploring the possibility of introducing Starbucks-branded ready-to-drink (RTD) coffee products in India, according to a report by Mint. This move would be part of Nestle’s global partnership with Starbucks Corporation, which allows it to sell Starbucks’ packaged coffee and beverages outside of its cafes.

 

Axel Touzet, head of Nestlé’s Coffee Strategic Business Unit, confirmed the development, saying, “We continue to evaluate similar opportunities to expand our coffee portfolio in India to target different coffee consumption moments as more and more people in India look to coffee," Mint quoted Touzet as saying.

 

Expanding the Starbucks-Nestle partnership

Nestle and Starbucks signed a global deal in 2018, granting Nestle the rights to market Starbucks’ packaged coffee and food service products in retail stores worldwide. The partnership was later expanded to launch RTD coffee products, such as Starbucks Frappuccinos and Doubleshots, across Southeast Asia, Oceania, and Latin America. Now, Nestle is considering a similar expansion in India.

 

Despite India being a predominantly tea-drinking nation, coffee consumption is rising, especially in urban areas. Nestle’s Nescafe brand has already introduced coffee to over 30 million Indian households in recent years, and Starbucks’ presence in the country has also grown. The Starbucks-Tata joint venture, which operates over 470 stores in India, recorded revenue of Rs 1,218.06 crore in FY24, marking a 12 per cent increase from the previous year. 

India’s growing coffee market

India remains a key growth market for Nestle’s coffee business. The company’s powdered and liquid beverages segment was the largest contributor to its growth in the December 2023 quarter, with retail sales crossing Rs 2,000 crore in the past year. Nestle recently introduced its premium coffee range, Nespresso, in India considering a growing demand for high-quality coffee products.

 

A report by ResearchAndMarkets.com suggests that the global RTD tea and coffee market will grow from $107.18 billion in 2023 to $197.4 billion by 2032, driven by evolving consumer preferences. Asia-Pacific is leading this trend, with India among the emerging markets.

What’s next?

Nestle has not yet confirmed a launch timeline for Starbucks’ RTD coffee in India but sees the market as a significant opportunity. "India has tremendous potential for coffee. That's why the rights to distribute Starbucks coffee outside of cafes is so important for us,” Touzet said.