Starbucks opens first India store in Mumbai

The partnership with Tata has brought Starbucks access to some prime real estate for its outlets. The Elphinstone Building, for example, is owned by Tata Sons, the holding company that controls the Tata Group. The Taj Mahal hotel, site of the second shop, is also a Tata property.

It has also enabled Starbucks to enter a market with a locally grown and roasted espresso for the first time. The "Indian Espresso Roast" is sourced through an agreement with Tata Coffee, a sister company to Tata Global Beverages.

Unlike Europe, where Starbucks has foundered on entrenched cafe cultures, India is full of young people looking for an unintimidating place to hang out, away from the prying eyes and cramped quarters of home.

Retail consultancy Technopak Advisors predicted India's $230 million cafe market will swell to $410 million by 2017, with the number of cafes rising from 1,950 to 2,900 in the next five years, in a report released Thursday.

Cafe Coffee Day, which is owned by an Indian coffee conglomerate based in the southern city of Bangalore, has around 1,350 outlets and is the current market leader. A host of international players, like Gloria Jean's, Costa Coffee and Coffee Bean & Tea Leaf, are already scrambling to catch up. Dunkin Donuts also debuted this year, opening five stores in the year through September, according to Technopak.

____

Follow Erika Kinetz on Twitter at www.twitter.com/ekinetz