Pret A Manger's India foray: Why the British coffeehouse chain has to battle not just Starbucks, but India's love for tea too

Uk-based coffeehouse chain Pret A Manger recently jumped into the Indian market with its first store in Mumbai’s BKC. The brand—that sells organic coffee and ready-to-eat foods—has chosen India as its 10th market to rapidly scale operations in the next few years.

With Reliance Brands Ltd (RBL)—a subsidiary of Reliance Retail Ventures—as its master franchise partner, Pret’s foray has come at a time when leading coffee chain operators in India are turning bullish about the country in anticipation of steady growth. Per industry estimates, the Indian coffeehouse market, currently pegged at $3.2 billion, is growing at a CAGR of 9 per cent and it is expected to touch $4.2 billion (Rs 34,000 crore) by 2025.

Calling it the “most ambitious global franchise partnership”, Pret’s CEO Pano Christou had said in a media release, the company is betting on RBL’s expertise in the India market for the brand’s success. “We have been working with RBL to create an offer for Indian consumers that reflects the Pret brand, while also adapting to local preferences and food habits.” While emails sent to them remained unanswered, sources say they plan to open nearly 100 stores in the next five years.

But market watchers say that there are multiple hurdles to overcome for Pret. Per Harish Bijoor, Founder of Harish Bijoor Consults, the chain would require a strong brand building exercise to establish itself among Indian consumers. “Starbucks has a stature among Indian consumers that no other coffee brand enjoys. Moreover, Indians are inclined towards tea way more than they are towards coffee,” he says.

As for Starbucks, it opened a whopping 71 outlets and entered 15 new cities in FY23, taking its stores’ tally to 333. According to Sunil D’Souza, MD & CEO of Tata Consumer Products that manages the brand in India, the group “is looking to rapidly expand its presence in the coming years”.

Deven Choksey, Founder & Promoter of KRChoksey Holdings says Reliance’s nearly 18,000 outlets across formats could prove to be crucial for Pret. “Reliance would attempt to leverage its store presence… and sell Pret branded products through its existing counters. It would pitch Pret as a more affordable option; a strategy Reliance has followed for most of its business segments,” he says.

@arndutt