Tata Starbucks, which was established as a collaboration between the Tata Group and Starbucks, has achieved a sales milestone of over INR 1000 crore since its inception in the country ten years ago.
The Indian arm of the largest coffee retailer in the world witnessed a sales growth of 71% in the fiscal year 2022-23, generating revenue of INR 1087 crore. This growth was primarily driven by the opening of new outlets in major Indian cities, in response to the increasing demand for high-quality beverages. In the previous fiscal year, FY22, the company had recorded sales worth INR 636 crore.
During its earnings presentation, Tata Consumer reported conducting a pilot program in 2022 across four Indian cities aimed at enhancing consumer familiarity with the brand, creating additional opportunities for customers to visit Starbucks, and expanding the range of potential consumers.
“Tata Starbucks is looking to rapidly expand its presence in the coming years. To achieve this, we are looking to enhance its relevance for more segments of consumers,” it added. “The pilot stores demonstrated improved operating metrics. As such, these workstreams will be rolled out nationally in 2023.”
In the previous year, Starbucks introduced masala chai and filter coffee on a trial basis in India and simultaneously revamped its menu to appeal to customers with more affordable and localized options. The updated menu featured freshly made street-style sandwiches, bite-sized snacks, milkshakes, and smaller beverage cups.
Starbucks initiated its India operations in October 2012 and achieved the fastest store expansion rate in the last fiscal year by adding 71 new stores, bringing the total count to 333. In contrast to its competitors, Cafe Coffee Day and McCafe, Starbucks’ positioning in India is in the premium segment, reflected in comparatively higher prices.
Despite this, Starbucks is facing competition from two of its global rivals – Canadian coffee chain Tim Hortons and US-based organic food and coffee chain Pret a Manger, both of which have already established a presence in India. Experts suggest that this could pose a long-term challenge for Starbucks, as the US coffee retailer’s high pricing may be threatened.