Starbucks open its first café in India, with more to come

Chain finally opens first café in India, serving regional beans and locally-crafted furniture

PUBLISHED : Monday, 22 October, 2012, 12:00am
UPDATED : Monday, 22 October, 2012, 3:00am

After years of delays, Starbucks will open two stores in India this week after launching its first cafe in the country last Friday.

Its first store, in Mumbai, features local design, Indian teakwood furniture and espresso drinks made from Indian-grown and roasted coffee.

As the world's most populated country after China, India represents a major opportunity for growth for many fast-food chains. Starbucks and others only recently firmed up plans to enter the market, in part because the government has eased strict rules about foreign investment.

Arriving five years after it expected to, Starbucks competes with an entrenched coffee culture, including one chain - Cafe Coffee Day - that has more than 1,000 Indian locations.

Chief Executive Howard Schultz, who was in Mumbai for the opening on Friday, said: "There certainly is a lot of coffee being sold here."

He isn't worried.

"The quality of the coffee and presentation and execution are far, far behind what we do every day," he said of the existing cafes. "Any of the stores located in India by our so-called competitors, we would never occupy or operate. These people are in a completely different business than we ever have been."

In an unusual twist for the ubiquitous chain, Schultz said: "We never intended to have the largest number of stores in this country."

But he declined to say how many stores Starbucks eventually might open in India.

Starbucks put the name of its Indian business partner, the conglomerate Tata, on its store signs, which read "Starbucks Coffee: A Tata Alliance", something Schultz said he hopes will build awareness and trust with Indian consumers.

Starbucks is using Indian-grown and roasted coffee in its espresso drinks there, its first use of Indian coffee in years and possibly a sign that the quality of the coffee crop has improved.

"Many, many years ago, we did buy coffee from India, but there were some issues, and over time we were just not buying coffee from India," Schultz said.

Part of the partnership with Tata includes further improving the quality of Indian-grown coffee and raising its profile around the world.

The first store in Mumbai sells Himalayan mineral water, Tata Tazo tea and a menu with local flavours like murg tikka panini and tandoori paneer roll.