As India's Coffee Industry Booms, Starbucks India Plans to Open up to 100 New Stores Annually – CoffeeTalk

Starbucks Corp.’s India unit, Tata Starbucks Pvt., a partnership with Tata Group, is significantly ramping up its expansion in India’s burgeoning coffee market by planning to open 50 to 100 new stores annually. CEO Sushant Dash noted in an interview that India is one of the fastest-growing markets for Starbucks globally, with the company’s store count having more than doubled to over 500 locations in the past four to five years, giving it a market share of approximately 30%.

The increasing disposable income and evolving consumer preferences are driving a surge in coffee consumption, presenting a growth opportunity despite rising competition from local chains like abCoffee and Blue Tokai, as well as other international brands. Currently, only about 24% of Indians drink coffee, contrasting sharply with the widespread preference for tea, which is consumed by around 93% of the population.

As Starbucks seeks new growth avenues amidst challenges such as operational streamlining in the U.S. and consumer boycotts in markets like South Korea and the Middle East, it has adopted a multi-format strategy in India. This includes drive-throughs, highway stores, kiosks, and experiential locations, along with four Reserve stores that focus on premium coffee offerings. The Reserve format, initially launched in Mumbai and recently expanded to Delhi and Kolkata, has already demonstrated significant demand for premium beverages.

Despite reporting losses, Tata Starbucks remains committed to expanding its presence and has achieved double-digit growth in earnings before interest, taxes, depreciation, and amortization while managing to halve its losses in the financial year ending March 31. The company prioritizes local sourcing for most of its products, including domestically roasted espresso beans, which helps to mitigate risks associated with global supply-chain disruptions. Dash emphasized that Tata Starbucks will not compromise on growth in pursuit of profitability, indicating a long-term vision for the company’s operations in India.

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