Despite facing stiff competition from local chains and a recent growth slowdown, Tata Starbucks is brewing ambitious plans for the Indian market. The joint venture between Starbucks and Tata Consumer Products announced a bold goal on Tuesday: operating 1,000 cafes and doubling its workforce by 2028.
Since its debut in October 2012, Tata Starbucks has steadily expanded to 390 cafes across India, adding 57 and 71 stores in the past two fiscal years, respectively. However, its revenue growth in the most recent quarter hit a three-year low, raising questions about its future trajectory.
Undeterred, the coffee giant is embarking on a multi-pronged strategy to reignite growth. Its plans include:
- Expanding reach: Targeting Tier-2 and Tier-3 cities beyond the metros, offering greater accessibility to Indian consumers.
- Diversifying formats: Increasing the number of drive-through, airport-based, and 24-hour cafes to cater to various on-the-go needs.
- Strengthening workforce: Doubling its employee base to 8,600, creating new jobs and enhancing customer service.
However, the battle for India's coffee market is intense. Local giants like Bengaluru-based Cafe Coffee Day and Barista hold a strong presence, while newcomers Third Wave backed by private equity and Blue Tokai, which have opened about 150 stores between them in the last three years, are quickly carving a niche with their focus on specialty coffee.
To entice the tea-loving Indian palate, Starbucks has even introduced smaller, more affordable drinks and milkshakes in recent years, launching a six-ounce drink starting at $2.24 and milkshakes.
While the road ahead may be challenging, Starbucks' ambitious expansion plans and strategic adjustments show its commitment to the Indian market. It remains to be seen if the coffee giant can overcome competition and reignite its growth engine in the land of tea.
