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Starbucks Corp, the US based world’s largest coffee chain, have tied up with Tata Global Beverages in a 50-50 venture and will open their first coffee shop in Horniman Circle in prestigious south Mumbai. The outlet will serve coffee that is sourced and roasted entirely locally through an arrangement with Tata Coffee Ltd. This may be a downer for those looking to taste international coffees Starbucks provides in its global locations. The tie up visualizes a chain of 50 outlets in Mumbai and Delhi with an outlay of $ 80 million spread over a year or two. John Culver, president of Starbucks China and Asia Pacific did not indicate the precise number of outlets in India. The first few outlets will be in several locations in Mumbai this year followed by a few in Delhi the next. The approach appears cautious, possibly considering India’s slowed down growth and increasing inflation. Real estate costs could prove a headache for Tata Starbucks. Café Coffee Day and Barista already have an established presence, with others planning to make an entry. Metro is where the market is and also where real estate is scarce and priced sky high. Tata Starbucks, however, is positive and according to CEO Davda, they are training people to work in the proposed cafes. A slowdown back home and in Europe where it has a significant presence has led Starbucks to India’s doors with high hopes and it faces the real estate wall. Its outlook is cheery given that India has a coffee culture and is a big, long term market. The retail coffee market is estimated at $ 200 million with an annualized 25% growth rate. This is also luring others such as Dunkin Donuts and Krispy Kreme.
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