Starbucks Plans Cafe Joint Venture with Tatas in India

October 10 00:00 2011

The New York, October 10 ( – Starbucks (NASDAQ: SBUX) is all set to enter into a joint venture with Tata Group for opening coffee shops in India. Chairman and CEO Howard Schultz had struck a sourcing deal with Tata Coffee, which is a unit of India’s largest private conglomerate and Asia’s largest coffee grower, almost nine months ago.

The Seattle-based $11-billion Starbucks had considered other potential partners, like Jubilant Foodworks, before settling for Tatas. India’s foreign direct investment (FDI) regulations allow Starbucks to hold up to 51% in the joint venture. Tatas and Starbucks are now scouting for possible locations for the café parlors.
Like most international chains, Starbucks is now turning its attention to emerging markets like India and China. It plans to triple its coffee outlets to 1,500 in China by 2015. Worldwide, Starbucks with its famous sea nymph logo has more than 17,000 outlets with 12,000 of them in North America.

In India, the coffee shop sector is dominated by Barista and Café Coffee Day although other international brands like Nescafe, Costa, Coffee Bean and Segafredo Zanetti are also trying to build café chains in the country. Recently Jubilant has announced a tie-up with Dunkin Donuts.

Coffee consumption in India has increased by 6% in the last five years as a result of the influence of western-style café culture.