Nestlé is evaluating an expansion of its global coffee partnership with Starbucks in India. The company’s beverage retail business has surpassed $240 million, driven by Nescafé, and is launching Nespresso in the Indian market. Nestlé aims to tap into India’s growing coffee culture, expand household penetration, and open its first Nespresso boutique in New Delhi. The company is also working closely with farmers in Karnataka, Kerala, and Tamil Nadu to enhance coffee production and sustainability.
Nestlé, a global leader in the food and beverage industry, is evaluating opportunities to extend its coffee partnership with Starbucks to India. The company already has a worldwide alliance with Starbucks to sell consumer-packaged goods in the retail segment. Nestlé India’s beverage retail business surpassed the ₹2,000 crore ($240 million) mark in the 12 months ending December, driven by its flagship brand, Nescafé. In addition, the company is set to introduce its premium coffee brand, Nespresso, in the Indian market, reinforcing its focus on India’s growing coffee consumption.
Global Coffee Alliance
Under the global coffee alliance formed in 2018, Nestlé and Starbucks offer an array of coffee products, including:
- Starbucks-branded capsules for Nespresso and Nescafé Dolce Gusto machines
- Whole bean and ground coffee
- Premium instant coffee
- K-Cup pods and creamers
This partnership spans over 80 markets worldwide, with select regions like Southeast Asia also featuring ready-to-drink Starbucks beverages. However, the agreement focuses exclusively on retail and in-home consumption, excluding Starbucks coffee shops, which in India are operated as a joint venture between Starbucks and Tata Consumer Products Ltd.
Expansion in India
Nestlé India has been steadily increasing household penetration for Nescafé, bringing 3.7 million new households into the coffee category. Axel Touzet, Head of Nestlé’s Coffee Strategic Business Unit, highlighted India’s immense potential for coffee growth.
The more we make progress in terms of household penetration and as more consumers develop a coffee habit, the bigger the coffee business will become in the country.”
Axel Touzet, Head of Nestlé’s Coffee Strategic Business Unit
He emphasized that Nestlé is actively assessing expansion opportunities in India to cater to different coffee consumption patterns as the beverage gains popularity.
Nespresso Launch in India
As part of its India strategy, Nestlé is launching the Nespresso portfolio, which includes:
- Coffee capsules
- Machines
- Accessories
The company plans to open the first Nespresso boutique in New Delhi, with expansion plans for other major cities.
India is one of the fastest-growing coffee markets for us. Affluent consumers have shown an appetite for the Nespresso portfolio, making it an opportune time to introduce the brand here.”
Axel Touzet, Head of Nestlé’s Coffee Strategic Business Unit
Market Projections and Sustainability Efforts
India’s coffee market is projected to reach approximately $1.23 billion by 2032, driven by younger consumers who see coffee as an aspirational beverage. Nestlé is one of India’s top coffee buyers, purchasing around 10% of the country’s total Robusta coffee output annually.
The company works closely with 5,000 farmers across Karnataka, Kerala, and Tamil Nadu, providing training on regenerative farming practices to enhance quality, productivity, and sustainability. Additionally, it supports these farmers in obtaining 4C (Common Code for the Coffee Community) certification.
With India emerging as a key market for global coffee brands, Nestlé’s potential expansion of its Starbucks partnership could significantly shape the country’s coffee retail landscape in the coming years.
