Starbucks ups coffee Tata franchise

10:26 SGT June 12, 2017
Cyrus Mistry, chairman of Tata Sons Limited, and Howard Schultz, chairman and CEO of Starbucks Coffee Company, at the Starbucks Reserve Roastery and Tasting Room in Seattle, Washington, USA.

Starbucks ups premium coffee experience, strengthens global tie-up with Tata. It also plans to bake Princi breads in new store format.

Starbucks is stepping up its premium coffee experience. It plans to open a new type of store and, for the first time, bake food in-house at certain locations in partnership with Princi, a trendy Italian bakery known especially for its artisanal breads.

It also announced multiple new joint initiatives which will expand the existing Tata and Starbucks relationship and strengthen the companies’ commitment to developing the Tata-Starbucks brand and building a different kind of company in India.

New store format

New Starbucks Roastery locations — including in Shanghai and New York — will be baking Princi breads in-store. Princi will also be served in the Starbucks Reserve-only stores — the brand-new store format that Starbucks is launching from next year.

The Shanghai and New York Roastery locations are due to open in 2017 and 2018, respectively.

Starbucks’ investment in Princi also includes expanding the chain of stand-alone Princi outlets worldwide, including one in Seattle, next year.

Described by company chairman and CEO Howard Schultz as “the next evolution of the Starbucks Roastery experience”, the new Reserve-only format marks yet another effort to enhance Starbucks’ premium coffee experience.

The company debuted the Reserve Roastery and Tasting Room in December 2014 and today, there are nearly 2,000 Starbucks Reserve cafés, in 30 locations, selling the company’s premium coffee line along with the traditional Starbucks menu.

The Reserve-only stores will be larger than the typical Starbucks cafés and will serve only Starbucks small-lot Reserve coffee instead of both Reserve and more common brews.

Starbucks did not specify how many Reserve-only stores would be rolled out, but Schultz said there were “hundreds of opportunities in both Reserve stores and Princi stores in the US alone”.

They will not, however, replace the local Starbucks anytime soon.

Said Schultz: “It’s not we’re fixing something that’s broken. Quite the opposite. We’re elevating the food experience in key, new locations that will be a premium, coffee-forward experience … We’re talking about a small segment of an opportunity that over time will be much bigger.”

Starbucks currently has nearly 24,000 stores worldwide.

Starbucks-Tata initiatives

Meanwhile, Starbucks is also strengthening its partnership with India’s Tata Group via a series of initiatives.

For the first time, it will offer a single-origin coffee from India in the US, giving customers outside the country a unique opportunity to experience a rare, small-lot coffee from the Tata Nullore Estates.

Starbucks also plans to increase its coffee roasting capacity for supplying its stores in India and will help to develop a signature Indian tea blend that will be available across all Starbucks stores in India.

Starbucks freshly brewed coffee will be introduced on Vistara, India’s fast-growing full-service airline and a joint venture between Tata Sons and Singapore Airlines.

In addition, Starbucks plans to expand the availability of Himalayan Mineral Water (bottled by Tata Global Beverages) beyond Starbucks stores in India to Singapore later this year, as the companies explore opportunities to introduce the bottled water brand to stores across Starbucks China and the Asia-Pacific region.

Among the Starbucks-Tata initiatives is the offer of a single-origin coffee from India’s Tata Nullore Estates in the US.

Starbucks did not specify how many Reserve-only stores would be rolled out, but Schultz said there were “hundreds of opportunities in both Reserve stores and Princi stores in the US alone”.

India is Starbucks’ fastest-growing market since the first café opened in 2012 in partnership with Tata Global Beverages, and Starbucks expects it to eventually become one of its top five markets.