Starbucks to enter India hand in hand with Tata Coffee

January 13th, 2011 - 9:31 pm ICT by IANS  

Mumbai, Jan 13 (IANS) US Coffee chain Starbucks Thursday said it was planning to set up retail outlets in India in partnership with Tata Coffee and has inked a deal with the Indian coffee major to collaborate in areas like sourcing of coffee beans.The memorandum of understanding (MoU) is for collaborating in areas like sourcing and roasting high-quality green coffee beans in Tata Coffee’s Coorg, India facility, said a statement from Starbucks.

“India is one of the most dynamic markets in the world with a diverse culture and tremendous potential. This MoU is the first step in our entry to India,” said Howard Schultz, chairman and chief executive, Starbucks Coffee Company.

The arrangement could also be extended to other Asian countries over time, the company added.

At a later phase, both companies said they will consider jointly investing in additional facilities and roasting green coffee for export to other markets.

Tata Coffee, part of the diversified Tata Group and Asia’s largest publicly traded grower of coffee beans, has been supplying premium beans to Starbucks.

“We welcome Starbucks entry into India because of both its unique experience with the store format and for its commitment to society, values that we share,” said R.K. Krishnakumar, chairman of Tata Coffee.

The entry of Starbucks which has over 16,000 stores in more than 50 countries will give competition to existing Indian coffee retail chains like Cafe Coffee Day and Barista.

“Tata and Starbucks will jointly explore the development of Starbucks retail stores in associated retail outlets and hotels,” the US company said in the statement.

Starbucks sells a wide variety of coffee and tea products with a range of complementary food items, primarily through its retail stores.

The announcement came after the markets closed. At the Bombay Stock Exchange, the Tata Coffee scrip ended Thursday with a 1.04 percent loss at Rs.463.10.

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