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Delhi Wine Club
Starbucks joins the Coffee Stars of India

Posted: Friday, 19 October 2012 17:40

Starbucks joins the Coffee Stars of India

October 19: After years of blowing hot, blowing cold strategy, the Seattle-based coffee giant Starbucks finally has entered through the gateway of India and inaugurated its first café in a historic building in southern Mumbai, owned by its partner- Tata; thus joining the established Indian Brands like Cafe Coffee Day with over 1600 outlets and Barista in a hope to take a larger piece of the burgeoning tea drinkers' market.

After over six years of studying the local market, Starbucks is making a rapid-fire entry into a market where coffee houses are still a relatively new trend and controlled by Indian conglomerates. The flagship Mumbai 120-cover store is located in the historic Elphinstone Building in south Mumbai and owned by the Tatas. "It is perhaps the most elegant, beautiful, dynamic store we've opened in our history," CEO Howard Schultz reportedly said after the inauguration in an interview. He hoped the effect would be like walking into a shrine of Starbucks coffee.

The coffee chains already in business, including the smaller international chains like Gloria Jean's, Costa Coffee and Coffee Bean and Tea Leaf, sell cappuccinos and lattes well below Starbucks' usual prices. A Cappuccino Café Latte will cost between Rs. 95 and Rs. 135, depending on the size, while iced coffee and blended beverages will cost Rs. 115-Rs. 200. At Café Coffee Day the same costs between Rs. 78 and Rs. 85 and between Rs. 100 and Rs. 133 respectively.

The company has started the business as a JV with Tata Global Beverages. Two additional stores will open in Mumbai next week - in the partner-owned Taj Mahal Palace Hotel on Wednesday and the Oberoi on the following day. It is slated to be launched in New Delhi early next year.

It would seem that during a part of the planning period of 6 years, the company was trying to find the right partners and assimilate the investment policies of the government. "We've been trying to crack the code here in a sense," Schultz said. They had decided much earlier that they must enter India with a local partner. Tata was found to be the ideal partner for the long term and an equal partnership agreement was signed between the two earlier this year.

At that time, the vice chairman of Tata Global Beverages, R.K. Krishnakumar had reportedly said the joint venture hoped to open 50 stores by the end of 2012. Starbucks has tried to play a low key to the statement.

The entry in India has been a late entry. There are more than 700 outlets already in mainland China, with Japan even overtaking it with a thousand. These big sizes are very small for the 10,000 outlets in the United States. But in recent times, Asia has emerged as a key driver of the growth.

Unlike Europe, where Starbucks has foundered on entrenched cafe cultures, India is full of young people looking for an unintimidating place to hang out, away from the crowded places of residence and too much interference by the close families.

According to sources, India currently has a $230 million cafe market which is expected to grow to $410 million by 2017, with the number of cafes rising from 1,950 to 2,900 in the next five years, as per a report released Thursday and announced by Fox News

Although it is too early to tell whether the global leader will follow the American example and start selling wine in these cafes too, Starbucks has already introduced the concept in a few of the stores in the US with varying success.



Subhash Arora Says:

Dear Sidd, the clue to include this article is in the last lines: 'Although it is too early to tell whether the global leader will follow the American example and start selling wine in these cafes too, Starbucks has already introduced the concept in a few of the stores in the US with varying success.' Starbucks has been a pioneer in serving wine at their cafes in the US and a couple of other countries, I think. This was emoluted by Barista and Nirula's and has had lukewarm success so far. Coffee Cafe Day serves wine at their cafe at the airport in Mumbai though they claim they will never serve wine in other cafes. Eventually, Starbucks may play a significant role in wine consumption in India and delWine totally supports the concept. I strongly hope they will bring this initiative in India too even though I doubt it will be within this year-or the next! So don't worry, Sidd, we don't move away from the focus-WINE. Subhash Arora

Posted @ October 25, 2012 12:35

Sidd banerji Says:

I am a big fan,more an ardent admirer of the magazine.A student too.A report on Starbucks today,struck a different chord.Do we include such non wine subjects too in the mag? May I req Subhash to reconsider the inclusion?Somewhere I felt the spirit and impact of our wine mag got diluted and side tracked.Hope I am wrong somewhere.

Posted @ October 25, 2012 12:35


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