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Starbucks plans huge expansion drive in next few years, says Tata Global Beverage

Updated : March 27, 2019 05:30 PM IST

Tata Global Beverages Ltd (TGBL) on Wednesday said Tata Starbucks is planning huge expansion drive in the next few years. Tata Starbucks is a 50:50 joint venture between Tata Global Beverages and Starbucks Coffee of the US.

In an interview to CNBC-TV18, Rakesh Sony, global head (strategy and M&A), said, "TGBL is in the process of consolidation. If you look at our India business, in the first nine months of this financial year, we have grown about nine percent in terms of volume and seven percent in terms of value."

"We are a large business. In India, we are among the top two brands and our market share is about 20 percent. One thing TGBL has not consciously done in the last 3-4 years is to aggressively invest behind our brands, which we have now decided to do. So, you will see some amount of margin pressure in the temporary phase. However, it’s been done for a larger good and for the larger cause," Sony said.

"Therefore, our brands will continue to perform very well in India and overseas too in the next few quarters. We see India margins returning to 14-15 percent," he added.

Talking about international business, Sony said, "The benefit of entire structural change that has happened, all of that will start to show from FY20 onwards. The overall impact will be between $8-10 million."
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