Starbucks to Expand in India

SEATTLE (TheStreet) -- Starbucks (SBUX) is making moves to expand its global footprint.

Starbucks said this week it entered into a non-binding memorandum of understanding with India's Tata Coffee.

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Under the terms of the deal the pair will collaborate on sourcing and roasting green coffee beans in Tata Coffee's Coorg, India-based facility, as well as jointly exploring "the development of Starbucks retail stores in associated retail outlets and hotels."

"This [memorandum of understanding] is the first step in our entry to India," Starbucks CEO Howard Schultz said. "We are focused on exploring local sourcing and roasting opportunities with the thousands of coffee farmers within the Tata ecosystem. We believe India can be an important source for coffee in the domestic market, as well as across the many regions globally where Starbucks has operations."

Starbucks said it and Tata will "collaborate on the promotion of responsible agronomy practices, including training for local farmers, technicians and agronomists to improve their coffee-growing and milling skills." The company's statement also mentioned it would build on Tata's "demonstrated commitment to community development," and the pair would "explore social projects to positively impact communities in coffee growing regions where Tata operates."

Starbucks-Tata is likely to start out by procuring green coffee beans from Tata's existing estates and roasting the beans in Tata's existing roasting facilities. Starbucks implied the pair will later look into investing additional facilities and roasting coffee for exports to other markets.

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