Tata Consumer Plans to Open 1000 Starbucks Cafes in India by FY28

After seeing a “huge opportunity” in the Indian coffee business, Tata Consumer Products is expanding its cafe chain under its joint venture Tata Starbucks, as disclosed by MD & CEO Sunil D'souza. 

Notably, Tata Starbucks is a 50:50 joint venture between Tata Consumer Products Ltd. and Starbucks Corporation which runs Starbucks cafes in India. The new plan is to open one Starbucks cafe every three days and have 1000 cafes in India by FY28. 

Currently, they have 457 stores across 70 cities as of the September quarter.

Tata Starbucks' Expansion Strategy

While Starbucks has already established itself as the largest coffee chain in the country, D'souza believes there is still significant room for growth, especially when compared to other countries with similar per capita income levels.

'Coffee is a huge opportunity in India. India is an under-penetrated country in coffee and when you look at global trends, coffee is a faster-growing category than tea,' D'souza remarked. [Source: NDTV Profit]

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Focus on Profitability

Despite incurring losses due to its expansion efforts, Tata Starbucks remains focused on achieving profitability at the store level. D'souza emphasizes the importance of maintaining a healthy store profit contribution, while also considering overall EBITDA and other investments.

The company closely monitors its advertising and promotional expenses, as well as royalty payments, to ensure that the unit economics are sustainable as they scale up.

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The Long-Term Vision

Now that Tata Consumer Products is committed to achieving its goal of 1000 Starbucks cafes by FY28, there may be short-term adjustments in the pace of store openings. However, the company remains steadfast in its target. 

D'souza is confident that with the right strategy and focus on unit economics, Tata Starbucks will be able to capitalize on the growing demand for premium coffee experiences in India.

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