Tata Consumer Shares Gain 1% Amid Global Coffee Price Hikes as Starbucks Raises Menu Prices

Tata Consumer Products Shares Surge Amid Price Hike at Tata Starbucks

On Monday, shares of Tata Consumer Products traded higher after Tata Starbucks reportedly increased prices by 5-10 percent across its menu. The company, which operates the Starbucks business in India through a joint venture, was trading at Rs 1,124.30, up 1.00 percent in afternoon trade.

The price hike is seen as a response to continued pressure on input costs, including rising coffee bean prices amid global supply concerns, higher packaging expenses, elevated rentals, and increased staff costs in urban markets. As a result, operating costs remain high, prompting the move to protect margins.

A recent report by ET Now suggests that premium café chains are expected to gradually pass on rising costs to consumers through selective price increases. This move comes a week after FMCG giant Hindustan Unilever increased prices for its soap products, driven by rising raw material and packaging costs due to the ongoing Iran war.

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Earlier this month, Nuvama released a report forecasting price hikes in Q1 FY27 due to higher crude oil prices and rupee depreciation, which have raised input cost pressures. The report states that at least 3-4% price hikes are expected if current raw material inflation persists, with paints, edible oil, soaps, and detergents potentially seeing even higher hikes.

The forecast is based on the assumption that companies typically maintain 30-45 days of raw material and finished goods inventory. As a result, price hikes are likely to occur in Q1 FY27, with the potential for higher increases in certain product categories.