International Coffee Chains in India: Brewing Competition*

Abstract:

Though coffee was regularly consumed in southern India, the country is new to Coffee cafés. Some of the first coffee chains in the country were Café Coffee Day and Barista. These chains expanded rapidly, and several international retail coffee chains like Gloria Jean, Barnie’s, Coffee Bean & Tea Leaf have entered the market, fueling the growth of coffee café culture in the country. Local cafés have also sprung up across several major cities. In such a scenario, the largest coffeehouse company in the world announced its entry into India. The case discusses the growth of retail coffee in India, the opportunities for international coffee chains and the challenges they faced in the country.

Issues: » The growth of Retail Coffee industry in India » The opportunities and threats to international coffee chains in India. Introduction On January 30, 2012, Starbucks Corporation (Starbucks), a US-based multinational coffeehouse chain, announced the setting up of an equal joint venture with India-based Tata Global Beverages . Both the companies were to invest US$ 40 million each in the joint venture. Through the joint venture, Starbucks planned to enter the Indian coffee retail market as Tata Starbucks Limited and to operate cafés branded as Starbucks Coffee - A Tata Alliance. However, Starbucks' plan to enter India was not a new one. Right from the early 2000s, Starbucks had been trying to enter India, but had not been successful. Starbucks was positive about its prospects in India this time around...

Questions for Discussion:

1. What are the reasons for the sudden growth in India’s retail coffee café market? Explain.
2. What are the opportunities and challenges that Starbucks and other international coffee companies can face in India?

Key words:
Starbucks, Costa Coffee, Café Coffee Day, Barista, Di Bella Coffee, Retail coffee chains, Café culture, coffee retail in India

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