Starbucks India takes Travel Retail route for expansion

International airlines will start operating in India from 27 Mar. ‘22 onwards, as part of the summer schedule. Pre-pandemic, India served over 130 mn passengers annually. In the past financial years, the number was 1/4th and 1/3rd respectively. The summer of 2022 is expected to drive heave influx of international tours to India and more Indians travelling within the country, especially on leisure.

Enter Starbucks.

The American coffee chain stepped in to India over a decade back in a JV with Tata Consumer. While the expansion was not as aggressive as its Indian counterpart Cafe Coffee Day, the company has been extremely careful with its choice of locations. As on date, the chain operates 258 stores in 26 cities. The company has adopted a deep-penetration expansion model in which a retail chain entrenches a single city before spreading to neighbouring ones. The strategy seems to have paid off, after all. Top Indian cities including Mumbai, NCR and Bangalore have at least 30+ cafes each while the next set of cities such as Chennai and Hyderabad have around 12 each.

The brand has built a high recall among discerning coffee lovers and has become the go-to place, especially with the void created by CCD.

Now, the cafe chain will open 6 cafes at airports, to cash in on the upcoming travel season as well as to ride on the equity it has built. Many of the new locations will come up, incidentally, at the Adani Group-managed private airports. The new locations are Bangalore, Bhubaneswar, Goa, Guwahati, Jaipur & Lucknow. With privately managed airports in these cities, it is expected that the setting of the cafes will provide a great vibe to the airport premises too.

Commenting on the development, Tata Starbucks CEO Sushant Dash said this year has been fruitful for the company in terms of expansion. ”Between December and January, we marked our biggest expansion by entering six new markets and now with the opening of eight new airport stores, we are echoing our commitment to evolve our brand and business in India to provide new and meaningful experiences to our customers,” he said.

The company would also integrate its Starbucks App at airports stores, so customers can order well in advance and pick up at location. The App also allows customers to maintain a wallet which can be redeemed exclusively at Starbucks.