Companies

Tata Starbucks ‘on track to make Indian market among top five’

Forum Gandhi | Updated on February 21, 2019 Published on February 21, 2019

People exit a Starbucks Corp. store

Consumer acceptance and constant innovation are key drivers, says CEO

Starbucks is on track to make India among its top five markets globally, according to Navin Gurnaney, CEO, Tata Starbucks

Starbucks operates in India under a joint venture with Tata Global Beverages and has 138 stores, mostly in metro cities along with a couple in tier-2 cities.

Speaking about the growth driver, Gurnaney said that the acceptance of the Indian consumer and constant innovation are the main drivers. “Two years ago, we had 250,000 members who had subscribed to our loyalty programme and now we have 540,000. So we’ve doubled in the last two years,” he said.

According to him, the Starbucks has a mixed base of customers of which millennials constitute a large segment. “Consumer interest in coffee continues to grow year after year and people are getting more discerning about good quality coffee and that’s what attracts them to Starbucks. People are getting more knowledgeable.”

Food business

In addition to beverages, food is a significant part of the business. “About 23 per cent of our revenue comes from food. Food is important everywhere, but India is particularly important. So we’re constantly evaluating and innovating our existing menus. We introduce items that are aspirational yet locally relevant that cater to the needs of the customer whether they are looking for healthier options, are they looking for more grab and go.”

Tata Starbucks has been sourcing coffee beans from India for other markets as well. Gurnaney said, “We are exporting coffee from the estates of Coorg and Chikmagalur to stores in the US and 10 other Asian markets. I see that growing.”

When asked if Starbucks plans to tie-up with food-tech companies like Swiggy and Scootsy, he said, “We have arrangements with Swiggy, Scootsy and other companies. In different cities — in Mumbai, Bengaluru and Delhi — but not in hundred per cent of the stores, because it’s very early.”

Meanwhile, Tata Starbucks on Thursday announced that it will transition to compostable and recyclable packaging solutions across its stores in India by World Environment Day on June 5, 2019. Gurananey said that the cost of this packaging will not be passed on to customers and the company will bear the higher cost.

Published on February 21, 2019
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