New Delhi: Seattle-based coffee chain Starbucks will open well over 30 outlets in the country in the current financial year, making it the largest number of store additions by the coffee chain in a year since it opened its first outlet in the country in Mumbai in 2012, said a top executive at the company.
On Wednesday the chain also announced its entry in the western state of Gujarat where it simultaneously opened five stores in the cities of Surat and Ahmedabad.
Starbucks now has 157 outlets in 10 cities including Mumbai, Delhi NCR, Hyderabad, Chennai and Bengaluru, among others.
The Starbucks flagship store in Ahmedabad is located at Prahlad Nagar and will offer customers more vegetarian food options. Starbucks that operates in the market through a 50:50 joint venture with Tata Global Beverages opened its first store in India in October of 2012.
In financial year 2017-18, the company added 25 stores in India, and another 30 in financial year 2018-19.
“So two years ago we built 25 stores, last year we did 30, and the plan this year is to substantially exceed last year’s number," said Navin Gurnaney, CEO, Tata Starbucks Private Limited.
“We will open more stores in FY 20 than in any other year in the past in India," he added. Since April Starbucks has opened 11 stores in India.
India is one of the top five fastest growing markets for Starbucks globally, Gurnaney said. “And we remain committed to the growth plans. We will be thoughtful but we will be aggressive as we go forward," he added.
Starbucks typically invests ₹1.5 crore to ₹2 crore in opening a new outlet in India. It will continue making such investments as it rolls out more cafes at malls, busy markets, metro stations, airports and office complexes. “We are going to rely on depth in the market where we exist already and breadth as we go out to new cities and states," Gurnaney added.
As of 2018, the country’s coffee and tea chain market was ₹2,569 crore, according to estimates from research firm Euromonitor International.
Home grown coffee chain Cafe Coffee Day started by the late VG Siddhartha in the 90s is the country’s largest chain of coffee. Coffee chain Costa Coffee that was bought over by Coca-Cola globally has a limited presence in the country as do brands such as Barista and Coffee Bean and Tea Leaf.
McDonald’s, however has aggressive plans to grow its McCafe coffee format across its outlets in west and south India.
Interestingly, Starbucks, a late entrant here, has seen three CEOs since 2012 with Gurnaney joining late last year.
In its annual report for the year 2018-19, Tata Global Beverages said that its joint venture with Tata Starbucks Private Limited, posted a double digit top line growth of 30% due to growth in existing store sales coupled with expansion of stores.
In July the chain also overhauled its food menu in the cities of Mumbai and Pune by adding as many as 18 new food items and discontinuing a few.
Gurnaney added that the new menu that includes cheesecakes, breakfast sandwiches and masala chole wrap (spicy chickpea wraps) will be rolled out across all stores by end of September.
The chain’s expansion comes as supply of quality real estate has dramatically improved in the last four to five years, said Ankur Bisen, vice president, retail and consumer products, at consulting firm Technopak, helping organised food and beverage chains such as Starbucks grow. The American coffee chain, added Bisen, has spent time studying the market, reading clusters, and are now ready to scale up. They realise India is not a cut and paste model, he added.