Starbucks signs deal to expand to India

SAN FRANCISCO — Starbucks on Thursday made its first broad push into India, a move to build on its growth in Asia and open the door to new sources of coffee beans and store growth opportunities.

Starbucks said it signed a nonbinding memorandum of understanding with Tata Coffee, which has supplied premium coffee beans to Starbucks.

The companies will collaborate on sourcing and roasting high-quality green arabica coffee beans and explore development of Starbucks retail stores in Tata retail outlets and hotels

Tata Coffee, one of India’s largest growers and exporters of coffee, is part of India’s Tata Group, a huge conglomerate that makes everything from Jaguar cars to Eight O’Clock coffee and Good Earth tea.

In addition, Starbucks and Tata said they will consider investments in facilities to export coffee from India to other countries. Tata owns 19 coffee estates in southern India.

Starbucks is eyeing international growth after successfully navigating through the economic downturn. The company aims to triple the number of stores it operates in mainland China to 1,500 by 2015.

On Jan. 5, Starbucks changed the logo on its coffee cups, dropping the words “Starbucks” and “coffee.” The move partly reflects the company’s push to be a worldwide consumer-products giant as it enters new countries.

While known for its love of tea, India is a sizable opportunity, boasting the world’s second-largest population and a growing class of consumers who have more money to spend on discretionary goods.

“We believe India can be an important source of coffee in the domestic market as well as across the many regions globally where Starbucks has operations,” Starbucks Chief Executive Howard Schultz said in a statement.

Starbucks has sourced coffee beans from India since 2004 but doesn’t operate any stores in India. A company spokesperson said it was too early to say when Starbucks would open its first store.

Coffee shops aren’t a new concept in India. Caffe Coffee Day opened its first store in 1996 and has grown to more than 1,000 outlets, some of which are in Austria and Pakistan. Barista Lavazza, owned by Italy’s Lavazza SpA, runs more than 200 Italian-styled espresso bars in 30 cities across India. Barista set up shop in 2000.