Tata Starbucks to open more than 25 stores in FY19, mulls launch of new units in Tier-II cities

CHENNAI : Tata Starbucks, a 50:50 joint venture between US-coffee major Starbucks and Tata Global Beverages Ltd, said it is planning to open more than 25 stores this year, especially in Tier-II cities, to sustain its revenue growth in India in the long term.“India is the fastest growing market for Starbucks, outside of the US, over the first five years. The Indian consumer is highly aware of the different ways of brewing, roasting and the place of origin of the seeds. We are very much part of the experience,” said Sumitro Ghosh, Chief Executive Officer, Tata Starbucks, told The Sunday Standard.

The company has about 118 stores across seven cities in the country.
“We had opened about 25 stores last year, including new locations like Kolkata. We plan to open more than that this year and add at least one more city this year,” Ghosh said.Amidst large western companies establishing their brands in the country, many have struggled to cater to the tastes of Asian consumers. 

“We had the benefit of watching and learning from other markets (like China) as they grew. What we did learn is that we need to have some level of customisation to local flavours and tastes. We keep visiting our partner stores regularly to spot any change in trends and explore what is relevant to the Indian palette,” the CEO said.

The company has also gradually spruced up its offerings under the food section, with more than 20 per cent of its revenue coming from the category. “Apart from a strong presence in beverages, we would like to add in more food in the menu along with our high-quality beverages,” he said.

Starbucks, which has turned EBITDA positive for the first time since it launched in India, saw a 28 per cent revenue growth last year by way of opening of new stores.“Given the current phase of India for Starbucks, we expect it to be one of the top five markets for us in the future,” the Tata Starbucks CEO said.