Coffee huge opportunity, scaling up Starbucks biz: TCPL CEO-MD

MUMBAI: Tata Consumer Products sees a “huge opportunity” in the coffee business in India and will focus on scaling up cafes under its joint venture Tata Starbucks, as per its MD-CEO Sunil D’souza.

Tata Starbucks, a 50:50 JV be- tween Tata Consumer Prod- ucts Ltd (TCPL) and Star- bucks Corporation which runs Starbucks cafes in In- dia, plans to take the number to 1,000 cafes by FY2027-28. The JV has 457 stores across 70 cities as of the Sep- tember quarter.

TCPL also expects growth from its vending business ‘Tata MyBistro’, a relatively new entrant in the segment offering a variety of coffee, tea and other drinks mainly to institutional customers. “With Starbucks, we are clear the store profitability is not an issue. And as we get to scale, we know we can generate prof- its out of it,” said D’souza.

Though, now Star- bucks with over 500 outlets has become the largest coffee chain in the coun- try,” it is “signifi- cantly under-pene- trated” in com- parison to similar per capita income GDP coun- tries. It’s still a small market and has a long runway, he added. “That’s why we had made a very clear statement of in- tent by saying that we will get 1,000 outlets by FY’28 nothing changes there.

In the short term, we might moderate the number of outlet openings, but the 1000 target remains there, and we will be fo- cused on that,” he said. Tata Starbucks’s rev- enue from opera- tions was up 12 per cent to Rs 1,218.06 crore in FY’24. However, its loss for the period had wid- ened to Rs 79.97 crore from a loss of Rs 24.97 in FY’23 due to the expansion. He said “as we go to tier II & III cities, bar a few excep- tions, we are seeing the re- ception there, and the throughput that we get is al- most equal to the metros.”

Now the aspirations of the youths in those small tier II & III places are no different from that of a metro. “Coffee is a huge opportunity in India. India is an un- der-penetrated country in coffee and when you look at global trends, coffee is a fastest growing category than tea,” said D’souza.