Mumbai , JAN. 29:
Next time you have Starbucks coffee in any of the neighbouring countries in South-East Asia, know that you are paying more than at home. Coffee prices at Starbucks in India are lower, thanks to its local sourcing arrangement with Tata Coffee.

“Starbucks prices in India are definitely lower than in Singapore and Malaysia. In fact, India is the only country where Starbucks is sourcing beans for its coffee chain. At the same time, the Starbucks experience in India can be compared to any of its outlets across the world,” said Meera Harish, Vice-President, Sales and Marketing, Tata Coffee.

Starbucks in India is at an advantage than in other countries where it has to import its coffees.

“There are cost advantages, as Starbucks can avoid freight charges involved in getting coffee from Europe or the US. The operating costs too are lower for Starbucks when it sources locally,” said Harish.

SOURCING DECISION

Sourcing coffee from India was not just based on Starbucks’ decision to forge a joint venture with Tata Global Beverages (the parent company of Tata Coffee).

“Starbucks was impressed by the quality of our coffee and Tata Coffee having Asia’s largest plantation. That is why Starbucks decided to source its coffee from us and also export it out of India,” claims Harish.

After its sourcing pact with Starbucks last year, Tata Coffee has also set up a new roastery at Kushalnagar in Madikeri district of Karnataka. The roastery can be scaled up depending on the demand from Starbucks. Tata Coffee is the country’s third largest exporter of instant coffee. But unlike Tata Global Beverages, which is a B2C player catering to the retail trade, Tata Coffee continues to remain a B2B company supplying to private labels across the world.

“Tata Coffee is basically a commodity player in the B2B segment and supplies to private labels. Today, our biggest global market is Russia followed by Japan. There are new challenges for the company as it would like to expand to new geographies,” said Meera Harish, who recently moved from Titan Industries within the Tata Group.

Purvita@thehindu.co.in

source: http://www.TheHinduBusinessLine.com / Home> Industry> Marketing / by Purvita Chatterjee / Mumbai, January 29th, 2013