Tata Global beverages has announced its plans to increase the number of Starbucks outlets in India in the coming months. The expansion of its outlets had hit a roadblock due to issues with the Food Safety and Standards Authority of India, which rejected applications for nearly 32 products on Starbucks’ menu in April of last year. The troubles with FSSAI, among other reasons, were chalked up to the slow expansion of Starbucks’ footprint in the country.
Tata Starbucks Pvt Ltd, which is a joint partnership between Tata Global Beverages and Starbucks Coffee Co, has revealed its plans to gradually increase the number of outlets in the coming months. Speaking to Economic Times about the challenges faced in expansion, Ajoy K Mishra, Managing Director and CEO of Tata Global Beverages, said, “This year the number of stores has not been as fast as we have had in the past, but I think we were retooling ourselves.” Due to the issues faced with FSSAI, Mishra said that the company had to suspend use of several ingredients in the products served at their Indian Outlets.
Issues Over Coffee
Starbucks has also run into trouble, recently, due to the reports from a UK based committee which noted the beverages served at its outlets contain an alarmingly high sugar content. Based on the study conducted by a UK-based committee called “Action on Sugar”, few beverages on Starbucks’ menu contain as much as 25 teaspoons of sugar. The company issued a response to the study stating that it is reworking the items on the menu and has plans to drastically reduce the sugar content by 25 percent in the coming years.
Launching New Outlets
Although Starbucks has faced issues recently, the company still intends to increase its footprint in India. Mishra explained that the company has retooled its product portfolio and the focus will solely be placed on rolling out new outlets in the country this year. “We have taken a pause to retool, re-engineer our product portfolio looking at indigenising a lot more whatever was possible. We have now reached a stage where there is going to be renewed focus on rollout and execution, so you will find that we are not consciously slowing down, ” said Mishra.
Howard Schultz, CEO of Starbucks, during his trip to India recently, identified the coffee sector in India as an emerging market and said that Starbucks has plans to invest heavily in the booming sector by introducing new campings centred around digital initiatives. He also announced that the company has plans to open “thousands of stores” in the not too distant future in India, which will make it the third largest market for Starbucks behind North America and China.