Ambani enters coffee business to compete with Starbucks

Billionaire Mukesh Ambani's Reliance Brands on Friday (April 21) launched its first 'Pret a Manger' sandwich and coffee outlet to take on Tata Group's Starbucks. 'Pret a Manger' is a British sandwich and coffee chain, which Mukesh Ambani has now brought to India. The first store of 'Pret a Manger' in India has been opened at Maker Maxity in Bandra Kurla Complex (BKC), Mumbai.
Reliance Brands Limited, a subsidiary of Reliance Retail, plans to open a total of 10 'Pret a Manger' stores in India this year in collaboration with the British sandwich and coffee chain. Reliance Brands and the British chain announced a franchisee partnership last year.
Darshan Mehta, MD, Reliance Brands said that the company is very happy to open its first Pret shop in India. Last year, Mehta had said that the brand would focus on airports in India. As per the agreement, around 100 'Pret a Manger' stores will be opened in India over the next five years.
Tata Starbucks is currently the largest player in the coffee business with 275 stores across 30 cities. There is a 50:50 joint venture deal between Tata Consumer Products and the American coffee chain Starbucks. 50 new Starbucks stores have been launched in India in FY22, the highest in a year for the company.
Avneesh Roy, executive director, of Nuwama Institutional Equities, believes that Reliance Brands' 'pret a manager' will prove to be a big competitor to Tata Starbucks in the long term. The arrival of 'Pret a Manger' could put Starbucks' high pricing at risk.
Pano Christou, CEO, of Pret a Manger, said that coming to India has been a long-standing goal of ours and the opening of the first store in Mumbai is a landmark moment in the company's international expansion plan. He said, 'We are working closely with the RBL (Reliance Brands) team to better offer Indian consumers. We will also incorporate local preferences and food habits into the Pret brand.
In the last few years, many coffee brands and chains have opened their stores in India. Canadian coffee and baked goods chain Tim Hortons opened two stores in Delhi-NCR in August 2022. Now in the next three years, the company plans to open a total of 120 stores in India. For this, the company will make a total investment of Rs 240 crore.
Tim Hortons India CEO Naveen Gurnani had said that by 2025 the size of the Indian coffee market is expected to exceed $4.2 billion i.e. Rs 34.48 thousand crores. In out-of-home consumption will be around 20%.
The D2C boom in India has seen a number of private equity-funded coffee and coffee-related startups emerge. Which includes names like Blue Tokai, Sleepy Owl, Slay Coffee, Rage Coffee, Third Wave Coffee, Beanly and Country Bean. They sell everything from ground coffee powder, roasted coffee beans, cold coffee, pour-over coffee, hot brew bags and Nespresso pods. Meanwhile, brands like iD have also launched ready-to-use coffee decoctions.
Coffee drinking culture is not new in the country. However, it is largely confined to the southern part of the country, where most of the production takes place. India consumed 1,143.61 million kilograms (mkg) of tea and about 10 mkg of coffee in FY22, according to data from the Tea and Coffee Boards of India.