Tata Starbucks: Insights into Revenue and Growth Strategy

Tata Starbucks, a 50:50 collaboration between Tata Consumer Products and Starbucks Corporation, has positioned itself as one of the preeminent coffee chains in India, both in terms of revenue and number of outlets. Although the company has seen growth over the years, it is still facing challenges with profitability.

Starbucks’ operational revenue witnessed a slight increase of 7% year-on-year, reaching Rs 1,367 crore in FY26, up from Rs 1,277 crore in FY25, as detailed in its standalone financial data from the Registrar of Companies (RoC).

Founded in September 2011, the brand operates cafes throughout India under the Starbucks label. By 2025, Tata Starbucks expanded to over 390 locations across 54 cities, employing approximately 4,300 partners. Notably, the company has set its sights on growing its network to around 1,000 stores by 2028.

The majority of its revenue is generated from the sale of coffee and related merchandise, with additional income stemming from its loyalty programme, My Starbucks Rewards, where consumers can accumulate loyalty points known as Stars.

The acquisition of coffee beans and associated products comprised 24% of the total expenses for the company. This cost rose 6% to Rs 356 crore in FY26 from Rs 336 crore in FY25. Additionally, employee benefit expenses increased by 9.8% to Rs 225 crore during the same timeframe.

Overall expenses, which include rent, electricity, advertising, freight, and other overhead costs, climbed by 4.7% to Rs 1,514 crore in FY26, up from Rs 1,446 crore in FY25. Through diligent cost management, Starbucks successfully reduced its net loss by 27%, bringing it down to Rs 99 crore in FY26 from Rs 136 crore in FY25. Nevertheless, its EBITDA remained at Rs 234 crore for the year.

On a unit basis, the company invested Rs 1.11 to generate every rupee in operational revenue. Its return on capital employed (ROCE) was recorded at -2.6%, while the EBITDA margin stood at 17%.

Its nearest rival, Café Coffee Day, reported revenue of Rs 1,094 crore along with a net profit of Rs 14 crore. Starbucks also faces competition from various emerging coffee brands, such as Blue Tokai, Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co.

As newer coffee brands cultivate their loyal customer bases, the competitive landscape in India’s coffee market becomes increasingly intense. For Starbucks, the challenge extends beyond merely increasing its store presence; the goal is to ensure that customers return for its premium products. An important consideration remains whether the demand for premium coffee in India can sufficiently sustain its ambitious growth agenda while improving its financial performance. The prospect of Starbucks failing to meet the $200 million threshold by 2030 raises questions regarding its strategic focus and market relevance if profit margins continue to elude the company.