Starbucks to rethink India strategy amid investment slowdown

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Starbucks is preparing to revamp its India business strategy after joint venture partner Tata Consumer Products made further capital infusion conditional on a shift to a leaner, more locally tuned format.

The US coffee chain operates in India through a 50:50 joint venture with Tata Consumer Products, called Tata Starbucks Private Limited.

The Economic Times (ET) reports that the Tata Group company has scaled back new investments in the venture until a more profitable operating structure is in place.

In response, Starbucks’ global CEO Brian Niccol and other senior executives met Tata Sons chairman N Chandrasekaran in Mumbai in mid-November 2025 to discuss the way forward.

The ET reports that Tata has questioned the suitability of Starbucks’ standard international model for India.

The chain’s global format is typically based on stores of around 3,000ft², with equipment configured to handle 700 cups a day and average prices of about Rs 400 ($4.48) per beverage.

Tata believes that this approach is misaligned with India’s competitive out-of-home coffee segment, consumers’ focus on value and steep rental costs in key locations.

As part of the planned revamp, the joint venture is expected to move towards smaller, more efficient outlets tailored to the Indian market, with an emphasis on improving store-level profitability.

The restructuring is likely to involve lighter equipment, stricter staffing norms and a more accessible pricing structure.

In late November 2025, Starbucks announced a Farmer Support Partnership (FSP) in India. In collaboration with Tata Starbucks Private Limited, the initiative is intended to link local agronomists and coffee growers with global best practices in farming through open-source agronomy.

The programme will be based in Karnataka and aims to engage 10,000 farmers by 2030. The Starbucks Coffee Trading Company, the company’s worldwide procurement and trading unit, will work with Tata Starbucks on the initiative.

Growers in key coffee-producing states, including Karnataka, Tamil Nadu, Andhra Pradesh and Kerala, are expected to participate.

"Starbucks to rethink India strategy amid investment slowdown" was originally created and published by Verdict Food Service, a GlobalData owned brand.

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