Tata Coffee & Starbucks Sign MoU for Strategic Alliance in India
MUMBAI, India, January 13, 2011 - In a significant step toward market entry in India, Starbucks Coffee Company (Nasdaq: SBUX) today signed a non-binding Memorandum of Understanding (MoU) with Tata Coffee Limited, one of the region’s leading providers of premium arabica coffee beans. The MoU will create avenues of collaboration between the two companies for sourcing and roasting high-quality green coffee beans in Tata Coffee’s Coorg, India facility. In addition, Tata and Starbucks will jointly explore the development of Starbucks retail stores in associated retail outlets and hotels.
The agreement recognizes Starbucks and Tata Coffee’s shared commitment to responsible business values. In accordance with the MoU, the two companies will collaborate on the promotion of responsible agronomy practices, including training for local farmers, technicians and agronomists to improve their coffee-growing and milling skills. Building on Tata’s demonstrated commitment to community development, the two companies also will explore social projects to positively impact communities in coffee growing regions where Tata operates.
Commenting on the announcement, R K Krishnakumar, Chairman of Tata Coffee, said, “We welcome Starbucks entry into India because of both its unique experience with the store format and for its commitment to society, values that we share.”
“India is one of the most dynamic markets in the world with a diverse culture and tremendous potential,” said Howard Schultz, Chairman, President and CEO, Starbucks Coffee Company. “This MoU is the first step in our entry to India. We are focused on exploring local sourcing and roasting opportunities with the thousands of coffee farmers within the Tata ecosystem. We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations.”
Tata Coffee, with its large arabica coffee production base spread over different growing districts of South India, has supplied premium coffee beans for Starbucks in the past and is now building a structure for a long-term relationship.
In the areas of sourcing and roasting, Tata Coffee and Starbucks will explore procuring green coffee from Tata Coffee estates and roasting in Tata Coffee’s existing roasting facilities. At a later phase, both Tata Coffee and Starbucks will consider jointly investing in additional facilities and roasting green coffee for export to other markets.
Tata Coffee has rich expertise in the bean-to-cup value chain, with an unyielding focus on quality. It has won global accolades for its premium coffees. Over the years, Tata Coffee has further strengthened its arabica coffee production base by producing premium specialty coffee. The company has an internationally certified (ISO:22000) Roast & Ground unit at Kushalnagar in the Coorg district of India, and is a dedicated supplier to cafes across the country and specialty roasters across the globe. Tata Coffee has rapidly transformed itself by adding to its portfolio through acquisitions, becoming a more vertically integrated business.
Starbucks Coffee Company is the premier roaster and retailer of specialty coffee in the world, headquartered in the United States, in Seattle, Washington. The company manages over 16,000 stores and operates in more than 50 countries. Starbucks sells a wide variety of coffee and tea products with a range of complementary food items, primarily through retail stores. Starbucks has a long association with India. For the last seven years, the company has been ethically sourcing coffee beans from India and contributing to several social programs in the country. Starbucks believes in doing business responsibly to earn the trust and respect of its customers, partners and neighbors.
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.
About Tata Coffee
Tata Coffee is Asia’s largest coffee plantation company and the 3rd largest exporter of instant coffee in the country. The Company produces more than 10,000 MT of shade grown Arabica and Robusta coffees at its 19 estates in South India and its two Instant Coffee manufacturing facilities have a combined installed capacity of 6000 metric tonnes. It exports green coffee to countries in Europe, Asia, Middle East and North America. In 2006, Tata Coffee acquired Eight 'O Clock Coffee Co., a segment leader in the US coffee retail market for US$ 220 million.
Tata Coffee’s other areas of business include tea, pepper, timber and hospitality in the form of ‘Plantation Trails’ – which recreates the plantation lifestyle of yesteryears. Tata Coffee’s farms are triple certified: Utz, Rainforest Alliance and SA8000 reinforcing its commitment to the people and the environment.