Tata and Starbucks finalise joint venture for coffee chain presence in India

Tata Global Beverages Limited and Starbucks Coffee Company announced on 30 January a joint venture between the iconic international coffee brand and the second largest branded tea company in the world. The 50/50 joint venture, named TATA Starbucks Limited, will own and operate Starbucks cafés which will be branded as Starbucks Coffee “A Tata Alliance.” The retail stores will be developed in cities across the country, beginning with stores in Delhi and Mumbai in calendar 2012. In a separate sourcing and roasting agreement between Starbucks Coffee Company and Tata Coffee Limited, Tata Coffee Limited will roast coffee to supply TATA Starbucks Limited, and to export to Starbucks Coffee Company. In a Starbucks press release, the company said that this agreement paves the way for consumers in India to enjoy the premium Starbucks Experience, while further discovering the unique taste of high-quality Indian Arabica coffee worldwide. “The joint venture with Starbucks is in line with Tata Global Beverages’ strategy of growing through strategic alliances in addition to organic and inorganic growth,” stated Mr. R K Krishnakumar, Vice Chairman, Tata Global Beverages, in the press release. “It opens up exciting business opportunities and new formats for Tata Global Beverages. Starbucks brings unique retail expertise as well as a shared sense of business values. We are excited about the opportunities the alliance presents to innovate in the retail space and bring new beverage experiences to more consumers in India, leveraging the global in-home expertise of Tata Global Beverages and the global out-of-home expertise of Starbucks.” “We’re very pleased to have found the best partner for Starbucks in Tata – a company that shares so many of the same values for conducting business in a way that earns the trust and respect of our customers and partners (employees),” said John Culver, President, Starbucks China and Asia Pacific. “We look forward to bringing the Starbucks Experience to customers in India by offering high quality Arabica coffee, handcrafted beverages, locally relevant food, and legendary service.” The TATA Starbucks Limited joint venture will operate cafés under the Quick Service Restaurant category. This partnership will enable the introduction of the unique Starbucks Experience to Indian consumers. Through a separate coffee sourcing and roasting agreement, Starbucks and Tata Coffee Limited will work toward developing and improving the profile of Indian-grown arabica coffees around the world by elevating the stature of Indian coffee through joint marketing efforts, as well as improving the quality of coffee through sustainable practices and advanced agronomy solutions. In the press release, Starbucks and Tata stated that they share common values of responsible business ethics and a commitment to community. Tata Coffee Limited has been working to improve the lives of coffee growing communities in the State of Karnataka. Through an initial financial commitment, Starbucks will work with Tata to support 'Swastha,' a school for children with special needs (in partnership with the Coorg Foundation) and aim to increase its capacity and outreach into the rural communities in the coffee growing region of Karnataka. Tata Coffee Limited and Starbucks also plan to work together on initiatives including the promotion of responsible agronomy practices and the provision of training for local farmers, technicians and agronomists to improve their coffee-growing and milling skills, along with exploring community projects which could positively impact the communities in the coffee growing regions where Tata is active.