The Caffeine Kick for Tata Starbucks

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Starbucks operates in India through a 50:50 Joint Venture with Tata Consumer Products Limited (TCPL). This Joint Venture began in the year 2012. During the financial year 2021-22, the TCPL has invested an amount of Rs. 86 Crores towards equity capital in Tata Starbucks Private Limited. Thanks to the normalisation of operations following the ease of COVID-19 restrictions, Tata Starbucks has reported a 76% YoY growth to ₹ 636 crores. This helped them to bring the 2-year sales CAGR into the positive territory.

This year included a lot of positive news for Tata Starbucks. It opened 50 new Tata Starbucks stores in 2022, taking the total to 268 across 26 cities. The company recorded its highest ever number of store openings during the year. As of the end of March 2022, 96% of its stores have reopened. It also launched first ever Nitro Cold Brew store in India, operated solely by women baristas. It was awarded India’s best Workplace for women in 2021. They also partnered with Chennai Super Kings during IPL 2021. Tata also used their Tata CliQ Luxury platform to launch Starbucks Merchandise. My Starbucks Rewards, the loyalty program member base witnessed a growth of 21% taking the total user base close to 1.1 million customers. The Starbucks India app has more than 10 lakh downloads on the Google Play Store. It recently opened one of the most picturesque stores in Guwahati on the banks of River Brahmaputra and a magnificent store close to Golden Temple, Amritsar.

These are all steps in the right direction. Tata Starbucks was able to reduce its net losses, however, they have not yet disclosed the amount of net loss. However, as reported by TCPL, the business was able to deliver breakeven at the operating profit level before depreciation and amortization (EBITDA). There has also been an increase in daily transactions through their delivery channel.

It will be interesting to see how this Joint Venture between the biggest coffee brand in the world and one of the biggest conglomerates in India plays out over the next few years.

Thank you.

Regards,
Ankur Shukla,
Kautilya,

IBS Mumbai. 

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