Starbucks Debuts 'Picco' 6oz Beverage and Indian-Inspired Menu to Woo Smaller Towns in India

Starbucks India aims to cater to the value-conscious Indian market by launching 'Picco,' a smaller and more affordable 6oz drink, alongside local-inspired teas and milkshakes, to rival burgeoning domestic start-ups.

Starbucks India, which operates 343 stores in the country, will also add milkshakes and 'Indian-inspired' tea offerings with Indian spices and cardamom to its local menu. The introduction of the Picco and 'Indian-inspired' teas, which sell at a starting price of $2.24, and milkshake, which starts at $3.33, is part of the coffee chain's desire to appeal to a broader section of the Indian market. Many Indian consumers prefer smaller and cheaper servings.

Devangshu Dutta, head of retail consultancy Third Eyesight, noted that excessively large beverage sizes are preferred by Americans, while Indian consumers are value-conscious. Dutta added that adjusting portion sizes helps make prices more accessible for Indians.

According to Starbucks India CEO Sushant Dash, the pricing strategy would help eliminate the perception that their products are expensive. These initiatives are also part of the company's strategy in facing rising competition from domestic start-ups like Third Wave and Blue Tokai.

One of the first foreign coffee brands to enter India was the US-based chain Starbucks. It opened 343 outlets in India in just 11 years. Compared to Starbucks, Blue Tokai and Third Wave are newcomers, which have opened about 150 stores over the past three years. A barista at a Starbucks store in Delhi, which sells 7,500 cups per month, said they have lost 30 cups a day to a Third Wave store that opened months ago and sells 3,700 cups per month.

According to Euromonitor, the $300 million specialty tea and coffee cafe market in India is expected to increase by 12% annually. Although they only have a few locations each, Pret A Manger in Britain and Tim Hortons in Canada are both growing.

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