The Hindu Business Line : Starbucks in pact with Tata Coffee for arabicas

TATA Coffee Ltd has signed an agreement with the world's leading coffee-café chain Starbucks to supply arabica coffee beans. Starbucks would be paying a premium of 40 per cent over global market prices, said Mr M.H. Ashraff, Managing Director, Tata Coffee.

However, Mr Ashraff declined to comment on the volumes that Tata Coffee would be supplying. The initial order is of "significant" size and has to be executed by March, Mr Ashraff said, adding the agreement between Starbucks and Tata Coffee, signed last week, was for a long-term.

"This deal shows how Indian coffee is gaining acceptance in the international market," Mr Ashraff said. It would further enhance Tata Coffee's reputation. Starbucks, which normally sources its requirements from South America and Indonesia, is buying Indian coffee for the first time. Tata Coffee is the only producer to have been chosen by Starbucks, Mr Ashraff said.

It is said that Starbucks has also signed up a Bangalore-based coffee exporter Ramesh Exports for sourcing beans.

Starbucks with over 8,500 retail outlets, Mr Ashraff said, follows stringent and exacting standards while signing up suppliers and quality was not the only criteria.

While deciding price premium, Starbucks also considers economic, social and environmental management practices of the vendors, he said.

Tata Coffee has been in touch with Starbucks for several months before the deal was finalised, and had met all criteria from soil, water, pest, waste and energy management, forest and biodiversity conservation to workers' welfare, wages, health conditions among others, he added.

Tata Coffee is Asia's largest integrated coffee conglomerate and produces about 10 million kgs of coffee from 7,000 acres spread over 17 estates across Karnataka. The company is also a major supplier of arabicas to Illycafe S.p.A, the leading roaster of espresso coffee from Italy.