Starbucks-Mumbai store's design, food to catch Indian eye

A 10-month wait has finally come to an end. Mumbai is now home to the first Starbucks outlet in India. And for the first time in history, Starbucks will source and roast its coffee locally. Starbucks, global CEO, Howard Schultz and Tata Global Beverages, vice-chairman, RK Krishna Kumar declare that their 50:50 joint venture in India will not change, reports CNBC-TV18's Menaka Doshi and Farah Bookwala.

Move over Cafe Coffee Day, Barista and Costa Coffee... Starbucks, the world's largest coffeehouse chain, now has a sprawling over-4,500 sqft address in India. And though it  has been a long wait, Starbucks global CEO Howard Schultz, who sees the store as a personal triumph, says that India is on track to become Starbucks' biggest market.

Howard Schultz, chairman, president and CEO, Starbucks Coffee Co, said, "It has taken us a long time and we were frustrated for a while. But the truth of the matter is that the size of the market has not changed. And unlike China, where we went 13 years ago and pioneered the idea of coffee, India is already a large coffee market  that we think we'll be able to, along with Tata, distinguish ourselves from everyone else."

Howard Schultz added, "Even if we made the decision today, regardless of the change in regulation, we would embrace the partnership with Tata with great enthusiasm"

RK Krishna Kumar, VC, Tata Global Beverages, explained, "Sourcing is an important part of the partnership. Tata Coffee produces some of the best coffee and is gives us access to Starbucks stores in India and hopefully, on an arms-length basis, across different markets outside India."

"Food is an ideal opportunity to display real respect for the Indian consumer. So the cuisine is skewed towards the Indian palate thanks to the help of Tata and the Taj group of hotels. The ambience of the store is not of typical Starbucks design. It has been designed with a tremendous amount of respect and sensibility to the Indian culture," revealed Howard Schultz.

"I think we've been very thoughtful with the pricing strategy. We really felt that we should come here and be in a position to create as many customers as possible. We did not want to eliminate any aspect of the market. We have no intent of using this as a switching spade to try and raise prices in a few months. The pricing strategy will give Starbucks a healthy profit and margins that over time are acceptable to us, our shareholders and to Tata," Schultz concluded.

However, the JV partners may not be able to meet the earlier target of opening 50 outlets in this financial year, for which it blames costly and inadequate real estate. But with one outlet up and running and three more to throw open their doors open in a week, many more are sure to follow.