Tata Starbucks crosses Rs 1000-crore annual sales mark amid rising competition

At a time when competition is heating up in the Coffee chain space, Tata Consumer Products has reported that Tata Starbucks has crossed the 1000-crore rupees sales mark in FY23.

Tata Consumer, while reporting its Q4 results said Tata Starbucks recorded 48 percent revenue growth for the quarter. For FY23, the coffee chain reported net sales of Rs 1,087 crore, a revenue growth 71 percent over FY22, when it reported a revenue of Rs 636 crore.

“This was a landmark year for the business, as it reached 4-digit in topline. Opened 71 new stores during the year and entered 15 new cities- the highest ever annual store addition,” the company said in its earnings release.

Tata Starbucks is a 50:50 joint venture between Tata Consumer and Starbucks Corporation formed in 2012, and since then the company has opened 333 stores across 41 cities in India.

The coffee chain is now looking to rapidly expand its presence in the coming years, the company said in the investor presentation. “To achieve this, we are looking to enhance its relevance for more segments of consumers,” the company added.

In the past year, the company has run initiatives aimed at bringing in more consumers to Starbucks. One such pilot was the introduction of a new 6oz ‘Picco’ size in hot beverages in four cities.

Speaking to CNBC-TV18 in an earlier interview, Sushant Dash, CEO of Tata Starbucks said the idea was that Indian consumers consumed coffee and tea in smaller cups, and the idea was to bring those consumers too on onboard.

Tata Consumer has said that the pilot stores demonstrated improved operating metrics, and the company will be rolling these out nationally in 2023.

The company said in the investor presentation that it also revamped its food menu, introduced familiar and ‘much loved’ options to its beverage menu. The company introduced masala chai and filter coffee to its menu in July 2022.

In addition, the company also launched its first Starbucks Reserve store in India in Mumbai.

The company’s growth and expansion plans come at a time when competition is heating up in space, and coffee culture is growing in the country, especially in urban cities.

Reliance Industries has brought UK-based coffee chain Pret A Manger to India with the first store opening in Mumbai last week. The company plans to open another store in Mumbai and one in Delhi within the next month, and is set to open 10 stores this year. The JV with Reliance Brands could see 100 stores being opened in five years. Pret A Manger is also priced similar to Starbucks with coffee beverages starting from Rs 230.

Meanwhile, Canadian coffee chain Tim Hortons also forayed into India in 2022 with its first store in Delhi, and as per reports, the company plans to open 120 stores over 36 months.

In comparison, Tata Starbucks opened 71 stores in the past fiscal, with a plan to rapidly expand its presence in the coming years.

Apart from global coffee chains eyeing the Indian market, India has also seen several Indian coffee chains coming up like Delhi-based Blue Tokai and Bengaluru-based Third Wave Coffee, which has been expanding their presence across the country.