Nestlé to Launch Starbucks Ready-to-Drink Coffee in India

Nestlé S.A., the world’s largest coffee company, is considering launching Starbucks-branded ready-to-drink (RTD) coffee in India’s retail market, as per a report. This move is part of Nestlé’s global partnership with Starbucks Corporation, allowing it to sell Starbucks’ packaged coffee and beverages outside of its cafes.

Axel Touzet, head of Nestlé’s Coffee Strategic Business Unit, stated that the company is continuously looking for opportunities to expand its coffee portfolio in India. He highlighted the rising coffee consumption trend in the country and Nestlé’s efforts to cater to different coffee moments for Indian consumers.

Expansion of the Nestlé-Starbucks Partnership

In 2018, Nestlé and Starbucks signed a global agreement that gave Nestlé the right to sell Starbucks’ packaged coffee and food service products in retail stores worldwide. Later, the partnership expanded to include RTD coffee products like Starbucks Frappuccinos and Doubleshots in Southeast Asia, Oceania, and Latin America. Now, Nestlé is considering a similar launch in India.

Rising Coffee Consumption in India

Though India has traditionally been a tea-drinking nation, coffee consumption is increasing, particularly in urban areas. Nestlé’s Nescafé brand has introduced coffee to over 30 million Indian households, while Starbucks has expanded its presence through a joint venture with Tata, operating over 470 stores in India. In FY24, Starbucks-Tata recorded a revenue of ₹1,218.06 crore, reflecting a 12% growth from the previous year.

India’s Coffee Market: A Key Growth Area

India remains a crucial market for Nestlé’s coffee business. In the December 2023 quarter, the company’s powdered and liquid beverages segment contributed the most to its growth, with retail sales surpassing ₹2,000 crore in the past year. Nestlé recently introduced its premium coffee brand, Nespresso, in India, targeting the rising demand for high-quality coffee products.

A report by ResearchAndMarkets.com projects that the global RTD tea and coffee market will grow from $107.18 billion in 2023 to $197.4 billion by 2032. The Asia-Pacific region is leading this trend, with India emerging as a key market.

What’s Next?

Nestlé has not yet announced a launch date for Starbucks RTD coffee in India but sees significant potential in the market. Touzet emphasised that India is a strategic focus for Nestlé, and distributing Starbucks coffee outside cafes is a vital part of their expansion plans.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.