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Starbucks evaluating the Indian organised coffee retailing market

Written by: Dhawal Shah

Article Overview: Starbucks could be in talks with six potential partners and is considering a joint venture with Indian firms from the retail and lifestyle sectors. The news comes after the announcement at the start of the year that Costa Coffee intended to build a portfolio of 300 sites in India using a local franchise partner.

Starbucks evaluating the Indian organised coffee retailing market

The organised coffee retailing Market in India is rapidly evolving. Existing players include Barista, Amalgated Bean Company (Café Coffee Day and Coffee Day Xpress), Global Franchise Architects (Coffee World), Qwikys, Impresario Entertainment (Café Mocha). There are several new players who wish to enter this segment which include Costa Coffee, Starbucks, Tata Mr. Bean Coffee Junction and Barnie’s We are seeing an increasing no. of International Brands willing to enter the Indian market. Starbucks has sensed huge potential in the Indian food retailing market. Much of these companies are banking on growth through both a mix of company-owned and franchisee stores.

Specialised café formats are now emerging, the two current largest players, Barista and Café Coffee Day are now experimenting with Bookshop Cafés, similar cafes like garden cafés, fashion cafés, sport cafés even singles cafés can be expected in the future.

Such cafés will become more of a community frequented by intellectuals, pop lovers, pizza lovers and will be more of discussion groups. A coffee company before franchising such a model, would have to demonstrate that such models can be successful. Such cafés do lead to an additional income stream but with additional investment.

However, as several coffee companies are aggresively expanding in new markets, prospective franchisees can expect better business opportunity selling that cup of coffee.

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Article Tags: barnie, bean coffee, caf, coffee companies, coffee company, coffee starbucks, coffee world, costa coffee, cup of coffee, franchise architects, georgia font, impresario, indian food, international brands, mr bean, pizza lovers, pop lovers, prospective franchisees, rsquo, span style



Related Forum Posts
The Starbuck's experience - [quote="Sebastien":3j66y8cv]Being French, I don't really understand what you call the Starbucks experience. We didn't have coffee shops in France until a couple years ago when (surprise!) Starbucks came in. So what's the Starbucks experience? Waiting in line 10 minutes for a cup of coffee? haha I think I understand what you're saying though. I think Starbucks has had tough competition lately with a bunch of coffee shop brands popping up and this is a natural move away from their core business (an actual coffee shop). We're seeing that Starbucks are actually not as profitable as everybody thought. As a side note, I've always said that some day there will be a huge financial scandal about Starbucks. A company just can't grow that fast in a healthy way. Anyways. So Starbucks is calling back founder and old CEO (I'm too lazy to look up his name on Google) to put Starbucks back on track and these vending machines might be some of his first projects. I think it is great to take advantage of such a good brand and do extend it further than a coffee shop.[/quote:3j66y8cv] Hi Sebastien, According to branding expert Martin Lindstrom, "Starbucks' objective is to create an intimate and even romantic atmosphere...The lighting is subdued to keep it cozy. The chairs and floor may be a little scuffed, but that makes it feel comfy and homely, and less intimidating...The music is soothing and sophisticated" (BRANDsense 158). So the Starbucks experience is essentially founder Howard Schultz's recreation of the coffee bar culture in Milan and the reason why they feel they can charge people outrageous prices for coffee. In fact, Starbucks isn't selling coffe, they're selling a unique and memorable brand experience to their customers.
New McDonalds McCafe concept... - It will be interesting to see whether this idea takes off in Japan. Here in Hiroshima there are at least 4 Starbucks that I can think of, and probably more, and several MacDonalds... as well as a lot of home-grown competition. Of course, MacD already sells coffee, and I'm not sure that expanding will dent Starbucks because I guess they appeal to different market niches... Could hurt MadDonalds more...
Starbucks vs Dunkin' Donuts - OT, but amusing... I saw a funny commercial for Dunkin Donuts the other day. Woman goes into a fancy coffee place and wants to order a large coffee, but she can't. The coffee comes in three sizes, but they are... and then the sales girl rattles off three Italian-sounding names... And then a Dunkin Donuts spokesman comes on and says, "Small, medium and large. We keep it simple." I assume this is a dig at the pretentiousness of Starbucks, where they name their sizes in a pretentious way. (I have to admit I've only been to a Starbucks once, to get some cookies - as I don't even drink coffee - but the prices were outrageous!)
Re: Starbucks and Real Estate - [quote="Takuya":39xglj53]I don't think I am the only one to notice this but every corner a new Starbucks erects, it raises the property value or seems to raise the perceived value, don't you think?[/quote:39xglj53] Hi Takuya, While I'd assume that having a Starbucks on your block would raise the property value, I'd also think having too many locations would saturate the market and somewhat take away from their allure/prestige/brand experience. For instance, if there was a Royal Doulton shop everywhere I went, I would no longer perceive their kitchen accessories, crystal and glassware, fine china collectibles, etc. as being "special" or worth the outrageous prices they charge. I'm not a coffee drinker, but I view Starbucks as the most prestigious coffee chain in Toronto along with Timothy's, followed by Second Cup and then Tim Hortons being for the average joe/blue collared worker.
Re: Why isn't Starbucks instant coffee selling? - I didn't know about Starbucks instant coffee. However, at the other end of the market, Nestle''s Nespresso is continuing to do well and grew by 30% in 2008, which is pretty impressive in any year, but especially in 2008!! David


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