Nestle, a packaged foods maker, is evaluating the possibility of bringing its global partnership with Starbucks to India to develop and sell Starbucks’ ready-to-drink coffees in the retail market outside of cafes. The partnership, which was signed in 2018, allows Nestle to market Starbucks’ packaged coffee and food service products in retail stores outside of Starbucks coffee shops. The partnership has already been extended to launch ready-to-drink coffee beverages in markets across Southeast Asia, Oceania, and Latin America.
India is a key market for Nestle, and the company is looking to capitalize on the growing demand for coffee in the country. Despite being a dominant tea-drinking market, India is seeing a shift towards coffee consumption, particularly among younger generations. Nestle is well-positioned to tap into this trend, with its existing coffee portfolio, including Nescafe, and its plans to launch new products, such as wholebean, roast and ground, and premium instant Starbucks coffees.
The partnership with Starbucks would allow Nestle to offer a range of coffee products, including capsules, Nespresso pods, and creamers, in the Indian market. The company is evaluating the possibility of launching these products in the retail market, outside of Starbucks cafes, to target different coffee consumption moments.
The Indian market is growing rapidly, and Nestle is well-positioned to benefit from this growth. The company’s powdered and liquid beverages business was the largest growth contributor in the December quarter, with high double-digit growth. Retail sales have also crossed Rs 2,000 crore in the last 12 months, led by Nestle.
The global ready-to-drink tea and coffee market is expected to increase to $197.4 billion by 2032, driven by diversified flavors, increasing consumer incomes, and the widespread installation of ready-to-drink tea and coffee vending machines. Nestle is well-positioned to benefit from this growth, with its existing portfolio of coffee products and its plans to launch new products in the Indian market.