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Tata, Starbucks to expand tie-up at global level

27 June 2016

Tata Sons and Starbucks have finalised multiple new joint initiatives to expand their collaboration at a global level, apart from building the American coffee chain's brand and business.

The initiatives include sourcing Indian coffee for the US market, introducing the Teavana brand of specialty teas in Indian stores, expanding the market of the Tata-owned mineral water brand Himalayan and skilling over 3,000 youths, the companies said.

Tata Sons chairman Cyrus Mistry met Starbucks chairman and chief executive Howard Schultz last week in Seattle and finalised these initiatives, which will be rolled out by the year-end, the companies said in a joint statement today.

The two groups have been running the Tata Starbucks coffee chain in the country since October 2012 as part of a joint venture.

The JV operates 80 stores in six key cities, but that is way below the initial target as they had set a target of opening 50 stores in the first year itself. The company has been citing difficulty in getting the right retail locations as the main reason for the slower expansion.

''Starbucks now spans over more than 80 stores across six Indian cities. As we continue on our journey with the Tatas, we are delighted to introduce the finest coffee from India to a new audience,'' Shultz said in the statement.

For the first time, Starbucks will be offering a single-origin coffee from India in the US, sourced from Tata Nullore Estates.

Starbucks Reserve Tata Nullore Estates will be the first coffee from India to be roasted at the Starbucks Reserve roastery and tasting room and will be available only at Seattle later this year, the company said.

''Starbucks shares our commitment to both coffee-growing regions and coffee farmers to ensure we meet the global demand for high-quality coffee over the long term,'' Mistry said.

''Our journey with Starbucks since October 2012 has been gratifying... We are honoured to be sourcing the finest Indian coffee and introducing Starbucks customers outside the country to its quality for the first time,'' the Tata Group chairman said.

Starbucks has also announced plans to increase its coffee-roasting capacity for supplying to its stores in the country and, over time, select markets around the globe.

Tata Coffee has a roasting and packaging plant in Coorg, Karnataka, since 2013, and at present it roasts Starbucks India Estates Blend and Espresso Roast coffee. It will soon expand to include both Kenyan and Sumatran coffees for Starbucks stores throughout the country, the companies said.

Starbucks also announced that it will offer its coffee on Vistara, the joint venture airline of the Tatas and Singapore Airlines, later this year.

The coffee chain will extend sale of its Teavana specialty tea in India by December.

The collaboration is also on for development of signature Indian tea blends that will be available across all Starbucks stores in the country.

The American coffee chain looks to expand availability of mineral water Himalayan, bottled by Tata Global Beverages, to Singapore later this year. Plans are also afoot to introduce the bottled water brand in Starbucks stores in China and the Asia-Pacific region.

Further, the two companies have agreed to come together and skill youth over the next five years through Tata Strive, which has till date trained some 43,000 people. The joint partnership is expected to benefit 3,000 more disadvantaged youth in the country.

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