Starbucks enters India with a 50:50 JV with Tata group
by Deepak Sharma on Tuesday, January 31, 2012
Starbucks is set to enter India with its 50:50 joint venture with Tata Global Beverages, a part of Indian conglomerate Tata Group. The plan is to open outlets in New Delhi and Mumbai by as early as August/September timeframe. It will be interesting to see how this JV fares in a country where Tea (or chai as Indians call it) rules supreme.
Tata Global Beverages Limited and Starbucks Coffee Company (Nasdaq: SBUX) today announced a joint venture between the iconic international coffee brand and the 2nd largest branded tea company in the world. The 50/50 joint venture, named TATA Starbucks Limited, will own and operate Starbucks cafés which will be branded as Starbucks Coffee “A Tata Alliance.”
The retail stores will be developed in cities across the country, beginning with stores in Delhi and Mumbai in calendar 2012.
In a separate sourcing and roasting agreement between Starbucks Coffee Company and Tata Coffee Limited, Tata Coffee Limited will roast coffee to supply TATA Starbucks Limited, and to export to Starbucks Coffee Company. This agreement paves the way for consumers in India to enjoy the premium Starbucks Experience, while further discovering the unique taste of high-quality Indian arabica coffee worldwide. TATA Starbucks Limited brings together two companies with a rich heritage in and passion for coffee, tea and innovative beverages. Together, the JV will enable an expanded range of beverage offerings for Indian consumers. As an example, the companies have agreed to jointly leverage assets and innovation to offer a premium tea product branded Tata Tazo.
“The joint venture with Starbucks is in line with Tata Global Beverages’ strategy of growing through strategic alliances in addition to organic and inorganic growth,” stated Mr. R K Krishnakumar, Vice Chairman, Tata Global Beverages. “It opens up exciting business opportunities and new formats for Tata Global Beverages. Starbucks brings unique retail expertise as well as a shared sense of business values. We are excited about the opportunities the alliance presents to innovate in the retail space and bring new beverage experiences to more consumers in India, leveraging the global in-home expertise of Tata Global Beverages and the global out-of-home expertise of Starbucks.”
“We’re very pleased to have found the best partner for Starbucks in Tata – a company that shares so many of the same values for conducting business in a way that earns the trust and respect of our customers and partners (employees),” said John Culver, president, Starbucks China and Asia Pacific. “We look forward to bringing the Starbucks Experience to customers in India by offering high quality arabica coffee, handcrafted beverages, locally relevant food, and legendary service.”