Starbucks, Tata to Tap India’s New Coffee Craze

With an increasing number of people in India apparently choosing coffee over their traditional chai, Starbucks Corp. (NASDAQ:SBUX) plans to open its first store in India in August with venture partner Tata Global Beverages Ltd., reports Bloomberg.Stores are slated to open in Mumbai and New Delhi in 2012, with 50 locations planned within the first 12 months, Tata Global Vice Chairman R.K. Krishna Kumar said yesterday at a press conference in Mumbai.The world’s largest coffee chain hopes to speed up growth in the Asia-Pacific region, where earnings were up 38 percent in the quarter ended Jan. 1, according to Chief Financial Officer Troy Alstead. The company expects an operating margin of nearly 30 percent for the region this fiscal year.

Competition includes Barista Coffee Co., a unit of Italy’s Lavazza SpA, and Cafe Coffee Day, run by Amalgamated Bean Coffee Trading Co. Coffee comsumption in India nearly doubled between 2000 and 2010, up to 108,000 metric tons.

“We are going to bring the Starbucks experience that is known around the world to India,” said John Culver, Starbucks president for China and Asia Pacific, according to Bloomberg.“All the coffee we serve here will be locally sourced.”

The company has a contract to buy beans from Bangalore-based Tata Coffee Ltd, a unit of Tata Global.

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