Finally, Starbucks Coffee Company has got a fix on its India plans. The US coffee chain has today signed a non-binding Memorandum of Understanding (MoU) with Tata Coffee Ltd for sourcing coffee and also for retail business in India.
The MoU will create avenues of collaboration between the two companies for sourcing and roasting green coffee beans in Tata Coffee’s Coorg, India facility, a release said. Besides, Tata and Starbucks will jointly explore the development of Starbucks retail stores in associated retail outlets and hotels, the release added.
India currently has several local players, however the market is led by Bangalore-base Cafe Coffee Day and Italian company Lavazza which acquired Barista coffee chain in 2007.
Starbucks was reportedly in talks with several Indian players such as Kishore Biyani’s Future Group, Anil D Ambani Group and Domino’s franchisee owner Jubilant Foods Ltd. Finally, the Tatas have struck the deal with the top coffee retail brand.
R K Krishnakumar, Chairman of Tata Coffee, said, “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.”
“India is one of the most dynamic markets in the world with a diverse culture and tremendous potential,” said Howard Schultz, Chairman, President and CEO, Starbucks Coffee Company.
“This MoU is the first step in our entry to India. We are focused on exploring local sourcing and roasting opportunities with the thousands of coffee farmers within the Tata ecosystem. We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations.”
Tata Coffee, with its large arabica coffee production base spread over different growing districts of South India, has supplied premium coffee beans for Starbucks in the past and is now building a structure for a long-term relationship.
In the areas of sourcing and roasting, Tata Coffee and Starbucks will explore procuring green coffee from Tata Coffee estates and roasting in Tata Coffee’s existing roasting facilities. At a later phase, both Tata Coffee and Starbucks will consider jointly investing in additional facilities and roasting green coffee for export to other markets, the release said.
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