Imagine you can enjoy the premium taste of Starbucks coffee at your home without burning your pocket. Impossible right? Well, Nestle has made this possible. Nestle is taken a step to introduce Starbucks ready-to-drink coffees in the retail market of India outside the cafés of Starbucks under its global partnership with Starbucks.
The strategy to bring Starbucks to retail outlets
Nestle, the popular coffee brand, is taking a step toward broadening the availability and accessibility of Starbucks coffee to customers. The recent strategy of the company has been highlighting their approach of making Starbucks coffee a convenient option for those customers who are continuously seeking quality coffee options without visiting a café.
As a part of the global partnership with Starbucks, Nestle introduce Starbucks coffees into the high-traffic location in India such as supermarkets, large retail chains and convenient stores. However, you might be thinking, how Starbucks can allow Nestle to do that? Is that not an impact on Starbucks’ business model?
Well, let’s go back to 2018. Nestle allied with Starbucks by getting the rights to sell the special roast and instant mixed coffees of Starbucks in packages outside of the coffee shops. Since then, the company has sold a wide range of coffee flavours including Starbucks capsules for Nespresso, one of its brands and Nescafé Dolce Gusto coffee machines besides whole bean, ground and roasted premium instant Starbucks coffees. K-Cup pods were sold in supermarkets.
However, forwarding to 2025, the company again took a significant step to expand its ready-to-drink Starbucks beverages for the Indian market. Different beverages from bottled cold brews to ice lattes and so on will be available in retail stores where coffee lovers can easily access and drink their favourite quality coffee at home.
David Rennie, Head of Nestle Coffee Brands, told in a company conference, “Coffee I actually Nestle’s number one business, and we are the market leader for this in all our business zones including Zone AOA (Asia, Oceania and Africa).” He added, “We will be elevating this ‘Coffee Shop at Home’ experience to the next level for consumers via the next generation of coffee system. This new generation of technology has been launched on four markets so far and we plan to have it in over 10 markets by 2027.”
The success rate of Nestle-Starbucks partnerships
The aim behind the partnership between Nestle-Starbucks has been found to increase the accessibility of Starbucks beyond coffee shops. After the collaboration, the coffee of Starbucks started to sell in supermarkets, convenience stores and different retail chains.
A price difference also arises. While a 16-ounce Starbucks Nitro Cold Brew packet was selling for $5.25, a freshly prepared Cold Brew was available for the price of $4.45 in Café. However, the café also provides a great experience to the customers which you might not be able at home.
In the first nine months of the fiscal year 2023, Nestle reported a double-digit growth in the ready-to-drink Starbucks coffees. In North America, the packaged Starbucks coffee get a significant growth. After the coffee is introduced in the Indian market then the chance of doubling the profitability might increase as the coffee trends in the Indian market are increasing.
Why did Nestle choose the Indian market for expansion?
Nestle India’s beverage retail business market size crossed ₹2,000 crore (approximately $240 million) in the last December 2024. India has been considered one of the growing coffee markets. In 2022, the Indian market was valued at $478 million. With a compound annual growth rate (CAGR) of 9.87%, the market is expected to reach 1,227.47 million by the end of 2032.
Despite being a traditional tea-drinking nation, the coffee-drinking culture is expanding among the urban and rural areas, especially among the working professionals. In the last few decades, the sales of quality coffees have increased in the market. The domestic consumption of coffee reach 1.23 million 60 kg bags between the year 2022 to 2023.
The retail sector of India has undergone a rapid transformation because of the rise of online delivery apps like Swiggy Instamart, Blinkit and so on. The online grocery and e-commerce sector is estimated to reach $30 billion by the end of 2026. This can offer Nestle a strong platform to sell Starbucks coffees in different regions of the country.
The most famous coffee offered by Nestle
Nestle mainly have three iconic brands through which they used to sell their premium and high-quality coffees. Nescafé, Starbucks and Nespresso are the three iconic coffee brands of the company through which they have offered a great experience to their customers.
Nescafé is known as the most widely consumed instant coffee brand in the world. This brand was launched in 1938 and since then, Nescafé revolutionised the way we drink coffee. The affordability, accessibility and convenient make this brand successful in over 180 countries. Some of the famous coffee of Nescafé are – Nescafé Classic, Nescafé Dolce Gusto, Nescafé Gold and Nescafé Sunrise.
In 2018, the partnership with Starbucks created another brand. Now Nestle started Coffee Shop Home Options by offering customers the famous coffee I packaged, pods and ready-to-drink options in retail stores in the countries of North America, Asia, Europe and other global markets.
Nespresso, a luxury coffee brand, is also owned by Nestle. It was launched in 1986 with the offerings of a wide range of espresso pods to introduce the barista-quality coffee experience to the customers. Nespresso directly partnered with coffee farmers from whom they directly source high-quality coffee beans.
How technology integration can contribute to the expansion?
The step of offering Starbucks coffee in the retail stores of India might be a great opportunity if technology can be integrated. Nestle can use smart coffee machines through which Indian customers can prepare their favourite coffee by just clicking a button. Indian people can avail barista-like coffee experience by staying in the comfort zone of the home.
The company can also offer a personalized coffee subscription by targeting the premium customer segments of Starbucks. Through this subscription model, customers can easily get their favorite Starbucks coffee on their doorsteps. The introduction of reward points can also increase the customer attention level not only for Nestle but also for Starbucks.
FAQ
1. How is Nestlé expanding Starbucks’ presence in the Indian retail market?
Nestle is introducing Starbucks ready-to-drink coffees in the retail market of India outside the cafés of Starbucks under its global partnership with Starbucks. These beverages will be available in high-traffic locations such as supermarkets, large retail chains, and convenience stores.
2. What led to Nestlé’s partnership with Starbucks in 2018, and how did it impact their coffee offerings?
The aim behind the partnership between Nestle-Starbucks has been found to increase the accessibility of Starbucks beyond coffee shops. After the collaboration, the coffee of Starbucks started to sell in supermarkets, convenience stores and different retail chains.
3. Why has Nestlé chosen India as a key market for the expansion of Starbucks coffee?
Nestle chose India as a key market because India has been considered one of the growing coffee markets. In 2022, the Indian market was valued at $478 million. With a compound annual growth rate (CAGR) of 9.87%, the market is expected to reach 1,227.47 million by the end of 2032.
4. How does Nestlé plan to integrate technology into the Starbucks coffee experience for Indian customers?
Nestlé plans to elevate the ‘Coffee Shop at Home’ experience by introducing next-generation coffee systems in four markets so far, with plans to expand to over 10 markets by 2027. The company could use smart coffee machines through which Indian customers can prepare their favourite coffee by just clicking a button. They may also offer personalized coffee subscriptions to premium customer segments.
5. What types of Starbucks coffee products will Nestlé offer in Indian retail outlets?
Different beverages from bottled cold brews to iced lattes and so on will be available in retail stores where coffee lovers can easily access and drink their favourite quality coffee at home.
6. How has the Nestlé-Starbucks partnership performed in other markets before India?
After the partnership, Starbucks coffee started to sell in supermarkets, convenience stores, and different retail chains. In the first nine months of the fiscal year 2023, Nestlé reported a double-digit growth in the ready-to-drink Starbucks coffees. In North America, packaged Starbucks coffee saw significant growth.
