January 31, 2012 by staff
Starbucks India, Tata Global Beverages Ltd and Starbucks Coffee Company have set up a 50:50 joint venture (JV) called Tata Starbucks Ltd to harness the vast potential of the growing hot beverages market in India. The JV company would own and operate Starbucks cafes across India. These cafes will be branded as Starbucks Coffee ‘A Tata Alliance’.
The partners have decided to open 50 cafes in several Indian cities in 2012 beginning with Delhi and Mumbai. Western Coffee cafes are becoming popular in India with the country’s young population. Starbucks cafes will now compete with Costa Coffee, Cafe Coffee Day and Barista in India. Together these players control a coffee cafe market estimated at over Rs 700 crore a year.
In a separate sourcing and roasting agreement between Starbucks Coffee Company and Tata Coffee Ltd, the later will roast coffee to supply to Tata Starbucks, and to export to Starbucks Coffee Company for its overseas operations. India is one of the world’s largest coffee producers at over Rs 3,000 crore a year.
This agreement paves the way for consumers in India to enjoy the premium Starbucks Experience, while further discovering the unique taste of highquality Indian Arabica coffee worldwide, the partners said.
The joint venture will enable an expanded range of beverage offerings for Indian consumers. For this, the firms have agreed to jointly leverage assets and innovation to offer a premium tea product branded as Tata Tazo.
“The joint venture with Starbucks is in line with Tata Global Beverages’ strategy of growing through inorganic growth focussing on strategic alliances in addition to organic growth,” said R.K. Krishnakumar, vice chairman, Tata Global Beverages.
“It opens up exciting business opportunities and new formats for Tata Global Beverages. Starbucks brings a unique retail expertise as well as a shared sense of business values. We are excited about the opportunities the alliance presents to innovate in the retail space and bring new beverage experiences to more consumers in India, leveraging the global in-home expertise of Tata Global Beverages and the global out-ofhome expertise of Starbucks,” Krishnakumar said.
“We’re very pleased to have found the best partner for Starbucks in Tata – a company that shares so many of the same values for conducting business in a way that earns the trust and respect of our customers and partners (employees),” said John Culver, president, Starbucks China and Asia Pacific.
“We look forward to bringing the Starbucks Experience to customers in India by offering high quality Arabica coffee, handcrafted beverages, locally relevant food and legendary service,” he added.
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