Tata Consumer Products (TCPL) is set to capitalize on the expanding coffee market in India by scaling up its cafe operations through its joint venture, Tata Starbucks.
MD and CEO Sunil D’souza said the company plans to increase the number of Starbucks cafes in India from 457 across 70 cities to 1000 by the fiscal year 2027-28.
“With Starbucks, we are clear that the store profitability is not an issue. And as we scale, we know we can generate profits from it,” said D’souza.
He said that while the chain has become the largest coffee chain in the country with over 500 outlets, the market remains “significantly under-penetrated” compared to countries with similar per capita income levels.
“Our store profitability is not an issue. As we reach scale, we can generate profits,” D’souza added.
In the fiscal year, Tata Starbucks reported a revenue increase of 12 per cent to US$147.59 million (₹1,218.06 crore). However, the company’s loss widened to $36.36 million (₹3,000 crore) in the previous year, primarily due to expansion efforts.
D’souza also highlighted the growth potential in India’s coffee sector, valued at $36.36 million (₹3,000 crore), compared to the $303.03 million (₹25,000 crore) tea category.
He noted that Tata’s vending business, Tata MyBistro, is also poised for growth, particularly in the coffee vending segment.
“Convenience will be a trend going forward. A coffee vending machine offering tea in workplaces will be significant in the future,” he said.
Currently, the estimated number of coffee vending machines in India ranges from 150,000 to 200,000, with MyBistro operating around 2000.
“We have a long way to go, and believe me, if you provide quality service with the Tata brand name, there can be magic. So we are focused on this,” he concluded.
