Starbucks bets on India's cafe revolution, tea culture

STARBUCKS will soon appear on Indian streets as the US group bets on lifestyle changes that are turning the tea-drinking country into a booming market for cafes.

India's appetite for the bitter brew has never been stronger, with its overwhelmingly young population opting to while away time in shiny Western-style cafes instead of the traditional coffeehouses.

Starbucks said earlier this month it will enter India through a tie-up with the country's biggest coffee producer, Tata Coffee, sourcing beans from south India and roasting them locally. The first store is expected in six months.

Arun Bhardwaj, vice president for emerging business at Starbucks, told AFP by email that it was "premature" to talk specifics about the group's strategy, but it is expected to adapt its menu to local tastebuds.

US chains Pizza Hut and McDonald's have "Indianised" their offerings, selling Indian cottage cheese pizzas and spicy potato burgers to woo subcontinental consumers.

Despite its reputation for tea, India has a long-standing coffee-drinking tradition, particularly in the southern state of Tamil Nadu where it is often brewed overnight, then mixed with milk and sugar before being served.

But old-school cafes like the 53-year-old Indian Coffee House chain, which popularised south Indian filter coffee, are now struggling for profit while hipper, Western-style chains are opening outlets every month.

A South Indian filter coffee typically costs as little as 10 rupees (S$0.28) at small restaurants, but increasingly affluent Indians in urban areas are choosing to sip on cappuccinos costing 75 rupees instead.

The change in tastes has less to do with a fondness for Italian espresso, say analysts, and more to do with the social cachet conferred by the beverage in class-conscious India, analysts say. Harish Bijoor, a brand specialist said "unlike tea, coffee particularly espresso-based coffee isn't easy to make.

It takes a lot more preparation, so there's an aura of sophistication around it." But the US coffee giant is far from the first to see the potential in the growing affluence of India's young population.

In addition to the Cafe Coffee Day chain with more than 1,000 outlets, foreign-owned chains Barista Lavazza and Costa Coffee are already present.