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Finally! Starbucks is set to open its cafes in India
US-based coffee chain Starbucks and India's Tata Group today announced an equal joint venture to open 50 cafes in the country in the first year of operations entailing an investment of Rs 400 crore (Rs 4 billion).
Beverages Vice-Chairman R K Krishnakumar told reporters at a joint press conference in New Delhi.
Tata Global Beverages signed a joint venture agreement with the US-based coffee giant, which sets forth the vision of developing the business here. Each party will hold 50 per cent in the JV.
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Finally! Starbucks is set to open its cafes in India
The cafes will be branded as Starbucks Coffee – A Tata Alliance.
The JV follows after the two firms forged an alliance last year to source and roast coffee for the US chain.
Starbucks China and Asia Pacific President John Culver said, "We look at this JV as a long-term partnership that is a win-win for both of us. The Tatas present a unique opportunity for us to have an enduring partnership.
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Finally! Starbucks is set to open its cafes in India
"We will not only look at the hotel properties that the Tatas have but we will also look at office spaces, shopping malls, airports, railway stations, colleges and universities to open our stores."
The JV announcement comes at a time when the country has just opened its doors for 100 per cent FDI in single brand retail but Starbucks maintains it always looked at having an equal partnership with the Tatas.
On January 10, the Government allowed 100 per cent foreign direct investment in single brand retail.
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Finally! Starbucks is set to open its cafes in India
"The company has entered into a joint venture with Starbucks group whereby, the newly formed joint venture company Tata Starbucks Ltd shall engage in the operation of Starbucks Cafes," it said.
Starbucks already has a deal with the Tata Coffee to source coffee for its global operations.
In a separate filling, Tata Coffee Ltd said it has also entered into separate agreements with Starbucks Coffee International, Inc., USA (Starbucks) and Tata Starbucks Ltd for supplying coffees to Starbucks outlets in India and other global markets.
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Finally! Starbucks is set to open its cafes in India
Under the agreements, the company will use Starbucks' know-how, technology and packaging for roasting coffee produced in the company's estates which will then be sold and distributed to Starbucks Cafes to be set up by Tata Starbucks Ltd in India and Starbucks business operations overseas.
According to an memorandum of understanding (MoU) signed last year, Tata Coffee and Starbucks had also agreed to explore the opportunities for opening coffee shops in India.
Tata Global Beverages' scrips closed at Rs 97.95 per share, up 0.67 per cent on the BSE. Tata Coffee's shares on the other hand closed at Rs 865.50 apiece, down 4.21 per cent from the earlier close on the BSE.