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Tue January 31, 2012
Beyond Cuppa Joe: Starbucks Embraces India, Lighter Roasts And Alcohol
"Skinny venti quad decaf latte" is not a household term in India. But that may be about to change, as Elliot Hannon reports from New Delhi on today's Morning Edition.
Starbucks declared yesterday it's barreling into India with plans to open 50 stores before the end of the year. That's just one of several big announcements the company has made this month — from a new coffee product to serving alcohol at some of its U.S. stores — as part of a strategy to get bigger and more profitable.
The first stores in India are set to open in Mumbai and Delhi this summer. But it won't be the first taste Indians have had of the bitter bean. Even though tea has deep roots here, in recent years, India's youth have developed a taste for coffee and consumption has almost doubled in the last decade.
This shift has been one of culture as much as taste, says Arvind Singhal, head of Technopac consulting.
"In India it's not so much about the growth of coffee as it is about the growth of cafe culture," says Singhal. "I think they're willing to pay for the experience, they're not necessarily paying extra for the coffee."
Home-grown companies that offer a Starbucks-like experience have exploded over the last decade. Indian-owned Café Coffee Day now has over 1,200 stores in almost 200 cities. Foreign competitors, like Italy's Lavazza, have opened stores, too. Starbucks is teaming up with the Indian corporate giant Tata to make its debut.
But in a country of over 1 billion people there's room enough for everyone, says Singhal.
"Even if you were to address the top 20 percent of this population you're looking into a population which is potentially the same size as the entire U.S. I see no reason why India, like China, would not be able to support [up to] 5,000 Starbucks stores," Singhal says.
Back at home, Starbucks has just introduced a lighter roast coffee, called "Blonde." The company says it may be the way to lure back critics who say its traditional dark roasts taste burnt or over-roasted.
Booze and "premium food" are another way the company is going to try to keep customers in its stores well past the coffee hour. As the Los Angeles Times reports, some stores in southern California will soon feature happy hours with beer and wine.