Starbucks India getting a whiff of tier II cities

Sangeetha Chengappa Bengaluru | Updated on January 22, 2018

Full of beans Sumitro Ghosh, CEO, Tata Starbucks, said the company expects to close FY18 with 24 new stores   -  SOMASHEKAR GRN

After setting up 106 stores in metros over the past five years, Starbucks India, a 50:50 joint venture between Tata Global Beverages and Seattle-based Starbucks Corporation, is looking to enter tier II cities in FY19, said a top company executive.

It already has stores spread across Mumbai, Pune, Hyderabad, Chennai, Delhi and Bengaluru.

The company, which celebrated its fifth anniversary in India last October, expects to end FY18 with 24 new stores, ramping up its total store count to 115. Plans are on to enter Kolkata, its seventh metro market, in early 2018.

Kolkata entry

“After we enter Kolkata, we are looking at tier II cities to open new stores and are in the process of evaluating them. We are growing fast and will beat the number of new stores opened in FY18 next fiscal,” Sumitro Ghosh, CEO, Tata Starbucks Pvt Ltd, told BusinessLine.

Pointing out that India has seen the fastest rollout of stores in the history of international markets (outside of the US), he said: “We get compared to the China market a lot, which has over 3,000 Starbucks stores and is growing at 500 stores a year. While China is a 15-year-old market for us, India is a five-year-old one.”

Ghosh said the company sees India becoming one of its top five markets in the world in the long term.

Asked how much of the coffee served in the stores are sourced from India, Ghosh said: “Roughly, Espresso accounts for over 60 per cent of our beverages. Every Americano, Latte, Cappuccino and all of our Frappuccinos are based on the Espresso beverage, which is made from Indian coffee beans sourced from Tata Coffee plantations in Coorg. We also import an Italian blend, and two single-origin blends from Kenya and Sumatra, which we serve in our stores.”

Grow in India

The Alphonso Frappuccino, introduced in India in 2014, is now offered in Starbucks markets outside India.

The India Estate blend that is sold in whole bean form over the counter in the company stores here is being sold online in the US and other countries.

Tata Nullore Estate’s coffee became the first Indian coffee to be roasted and sold at the company’s home city of Seattle in 2016, which was later rolled out across other Starbucks stores in the US. A second Indian estate specific coffee has been selected to be sold in the US, and will soon be announced, said Ghosh.

Published on January 22, 2018

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