Starbucks India overhauls menu

  • The new menu selection will also include a smaller 6 oz cup size called ‘Picco’, which will be available in six hot beverages including cappuccino, latte, filter coffee, masala chai, elaichi chai, and hot chocolate.

Suneera Tandon
First Published8 May 2023
Pedestrians pass a Starbucks Corp. store in central Warsaw, Poland, on Friday, Dec. 10, 2010. Kraft Foods Inc. sued Starbucks Corp. seeking to enforce an agreement the foodmaker claims gives it exclusive rights to sell Starbucks coffee in grocery stores through 2014. Photographer: John Guillemin/Bloomberg
Pedestrians pass a Starbucks Corp. store in central Warsaw, Poland, on Friday, Dec. 10, 2010. Kraft Foods Inc. sued Starbucks Corp. seeking to enforce an agreement the foodmaker claims gives it exclusive rights to sell Starbucks coffee in grocery stores through 2014. Photographer: John Guillemin/Bloomberg

New Delhi: Starbucks India, the 50:50 joint venture between Tata Consumer Products Ltd and the American multinational coffee chain, is revamping its menu in the country to draw in a larger customer base and drive profitability from its existing stores. The coffee chain is planning to offer a range of locally-inspired beverages and low-priced food and drink options to appeal to a wider audience.

The new menu selection will also include a smaller 6 oz cup size called ‘Picco’, which will be available in six hot beverages including cappuccino, latte, filter coffee, masala chai, elaichi chai, and hot chocolate.

The move follows a successful pilot program in Bengaluru, Bhopal, Gurgaon, and Indore last year, where the company tested localized menus and small coffee portions to attract more customers. The company plans to expand the new menu offerings across all its outlets in India.

Pilot results were very “encouraging”, said a top executive. Among other changes—Starbucks is also making its stores brighter to appeal to consumers unfamiliar with the brand.

Starbucks first entered the Indian market in 2012 through the joint venture and has since opened 340 stores across 43 cities and towns in the country. Last fiscal, the coffee chain Tata-Starbucks crossed the 1,000 crore mark in net sales. It now plans to add stores at a faster clip in one of its fastest-growing markets.

The product overhaul is aimed at appealing to a wider audience, making Starbucks more accessible to those increasingly embracing the cafe culture and creating newer coffee-drinking occasions, said Sushant Dash, CEO, Tata Starbucks Pvt Ltd.

“Today, we are in 340 stores in 43 cities, and towns, across the country. As we go to newer towns and newer catchments, we need to obviously get new consumers, because as we open new stores, we want to make them more profitable. And as we go to newer consumers, we realize that we need to create newer locations so that people come more often to Starbucks; secondly, we need to attract newer consumers and to attract newer consumers we also realize that we needed to make certain changes which make Starbucks a bit more familiar mainly for those who are not used to a Starbucks store or our offering,” he said.

India’s coffee market is still evolving, and Starbucks sits at the more premium end of the market with prices that can reach upwards of 300 for a small cup of coffee. However, it inspires aspiration among consumers who are willing to pay a premium price for coffee. The company’s products are significantly more expensive than filter coffee and tea sold at roadside stalls, which are available for as little as 10-20. Starbucks is trying to build coffee into a social occasion in a largely tea-drinking nation and is targeting a younger audience to embrace the cafe culture.

The company’s new offerings are intended to expand its presence in Tier II and III cities, where it needs to become a more accessible and familiar brand for consumers, said Dash. The new offerings include a range of Indian-inspired beverages, such as South Indian filter coffee, masala chai, elaichi chai, and a selection of milkshakes.

“Our pilot where we introduced a range of familiar beverages and a revamped food menu yielded fantastic results from both new and existing customers, which gave us the confidence to expand and go national,” Dash added.

The move also follows the chain’s rapid expansion—Starbucks opened its first 100 stores in the first five years of its India debut; the second hundred stores took three and a half years. “We are nearly reducing the time by half in terms of what we are doing with opening stores. As you open stores, you need to get business into the store, you need consumers to come more often or get new consumers. We intend to continue to grow and expand both in terms of new cities as well as in current catchments,” he added.

The new menu will also offer more bite-sized snacks and shareable food after Indian consumers said Starbucks meals were “too big”.

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