Brewing recipe for success: Starbucks eyes long-term growth

The operations, which began with this historic handshake between Starbucks’ Howard Schultz and Tata group’s former chairman Ratan Tata, has only picked up steam over the last 12 months.

It’s a year to the day that coffee-chain Starbucks decided to give India a whiff of its world-famous blends. CNBC-TV18’s Vineetha Athrey travels to Tata Starbucks’ plantation in Coorg to find out what’s cooking for year-two.

This luscious Tata Coffee estate is where Starbucks sources its coffee beans from. And the Tatas have set up an exclusive plant here for Starbucks with an annual capacity of 375metric tons of coffee beans for the Indian operations.

The operations, which began with this historic handshake between Starbucks’ Howard Schultz and Tata group’s former chairman Ratan Tata, has only picked up steam over the last 12 months.

The joint venture has opened 24 outlets across Mumbai, Pune and Delhi and is now gearing up to ramp up its presence. This means newer cities with it city Bangalore becoming the next destination. Enthused by the warm welcome it has received in India; Starbucks also plans to enter other metros and tier-2 cities.

“The corner stone of the brand is the passion and commitment with which the partners create that beautiful environment and that unparalleled Starbucks experience. We feel humbled and proud that the Indian consumer has adapted to it so well, says Avani Davda CEO, Tata Starbucks.

Expansion, of course, means money and while the exact amount is as secret as its coffee recipes, Starbucks says it is aggressively shoring up its war-chest. Remember, in august the company got the go-ahead to infuse an additional Rs 150 crore into the operations and trebling its authorized capital of Rs 70 crore.

Getting that long term strategy in place means a strict standardization of beverage recipes, signature coffee blends and a stronger snack portfolio, for starters. That explains why its Indian outlets boast a new blend that is not available in any of its other markets just yet. The special blend, of course, actually boils down to the beans that come from this Tata plantation in Coorg.

Now the coffee giant is working on leveraging this further by possibly making this plant a sourcing base for its Asia operations, a move that would give it a significant competitive advantage over its competitors.

source: http://www.moneycontrol.com / MoneyControl / Home> CNBC-TV18 comments / by Vineetha Athrey, Reporter, CNBC-TV18 / October 18th, 2013

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