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Tata Starbucks sees annual revenues rise 75% as Indian outlet growth continues

Tata Consumer Products has highlighted the robust performance of Tata Starbucks amid positive annual results, with the coffee chain continuing to target outlet growth via smaller stores in India

A Starbucks store in Mumbai, India | Photo credit: via Shutterstock



Tata Consumer Products has highlighted the performance of its licenced Starbucks business in India after posting annual revenues growth of 7.1% to Rs 12,425 Crs ($1.3bn) for its fiscal year ended 31 March 2022.

Net profit for the fourth quarter was Rs 239 Crs ($31m) and Rs 1015 Crs ($131m) for the full year.

The Tata Group subsidiary, which also controls prominent tea and coffee brands in India, highlighted Starbucks' robust 76% annual revenue growth, without posting specific figures. 

In its fourth quarter, Tata Starbucks, which operates around 270 stores across India, reported revenue growth of 32% for the fourth quarter, compared to 60% growth reported in the previous quarter.

The coffee chain opened 23 new stores in the fourth quarter, entering four new cities in Goa, Bhubaneshwar, Nashik and Guwahati. The expansion, an increase on the 13 opened during the previous quarter, brought the total number of store additions to 50 during the 2022 financial year.

In October 2021, Tata Starbucks CEO Sunil D'Souza outlined plans for Starbucks to open smaller store and drive-thru locations in a bid to accelerate sluggish outlet growth in India.

That strategy appears to be gaining ground, with the annual results capping off a positive year for Tata Starbucks. 2021 also saw the Seattle-based coffee chain opening its first Indian drive-thru location and reporting delivery as now playing a more prominent role in its business.

Starbucks continues to trail Indian coffee chain market leader Café Coffee Day, which operates around 570 stores across the country. However, high levels of debt and Covid-19 trading pressures have forced Café Coffee Day to permanently close scores of stores in the last three years, suggesting that the gap between the chains could continue to close in the next 12 months.
 
“Despite all the macro & operating challenges during the year, we delivered reasonable revenue growth along with improved profitability for the company… Our out-of-home businesses – NourishCo and Starbucks both delivered robust performance during the year,” said Sunil D’Souza, Managing Director & CEO of Tata Consumer Products.

Formed in 2012, Tata Starbucks is a joint venture between Starbucks and India's Tata Consumer Products Ltd. A major reorganisation was announced in March 2022, merging Tata Coffee’s branded coffee business with Tata Consumer Products to improve operational efficiencies and create ‘focused business verticals’.

For the financial year, Tata’s consumer package beverage business recorded six percent growth in revenues, following 32% revenue growth in the year previous. The segment, which includes prominent brands including Tata Tea Gold, Chakra Gold, Tata Tea Gold Care and Chakra Gold Care, as well as coffee brands Tata Coffee Gold, Tata Coffee Quick Filter and a new Sonnets range, collectively contributed to overall coffee revenue growth of 46% over the 12 months to 31 March 2022.
 
Internationally, the company’s tea brands continued to report growth, with Teapigs and Tetley Herbals innovations cited as key products for growth, particularly in UK markets.

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