SUMMARY
- Starbucks India has become the country’s top coffee chain surpassing Café Coffee Day.
- Tata Starbucks saw its earnings from operations grow by 12.05% to Rs 1,218 crore in FY24.
- Starbucks India’s losses went up by 3.2X, increasing to Rs 80 crore in FY24.
Starbucks India has risen to become the country’s top coffee chain, surpassing Café Coffee Day in terms of earnings in FY24. Yet, the company’s growth rate couldn’t achieve double digits and its losses more than tripled.
Tata Starbucks saw its earnings from operations grow by 12.05% to Rs 1,218 crore in FY24 compared to the previous year’s Rs 1,087 crore, as per its annual financial reports submitted to the Registrar of Companies (RoC).
To provide some context, Starbucks India is a partnership between Starbucks Coffee Company and Tata Consumer Products Limited. Established in 2012, Tata Starbucks operates in over 390 stores across 54 cities in India, employing approximately 4,300 partners.
Café Coffee Day, its closest competitor, reported a revenue of Rs 1,013 crore in FY24, with 450 stores as of March 2024. Starbucks also faces competition from several modern coffee brands, including Blue Tokai, Rage Coffee, Third Wave Coffee Roasters, Slay Coffee, Sleepy Owl, and Seven Beans Co, among others.
Regarding Tata Starbucks’ earnings, the majority came from the sale of coffee and related items. The remainder was generated from the My Starbucks Rewards loyalty program, where customers accumulate loyalty points (Stars).
The cost of purchasing coffee beans and other related items accounted for 26% of its total expenses, which increased by 8.5% to Rs 343 crore from the previous year.
The company’s total expenses, including employee benefits, rent, electricity, advertising and promotion, royalties, transportation, and other overhead costs, rose to Rs 1,320 crore in FY24 from Rs 1,140 crore in FY23.
In terms of profitability, Starbucks India’s losses more than tripled (3.2X), increasing to Rs 80 crore in FY24 from Rs 25 crore in FY23. Its ROCE and EBITDA margin were at 0.4% and 18%, respectively. On a per-unit basis, the company spent Rs 1.08 to generate a rupee in revenue in FY24.
