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Within a year, Tata Starbucks, the 50:50 joint venture between Tata Global Beverages and the Seattle-headquartered Starbucks, has launched 25 stores in three Indian cities. Chief executive Avani Saglani Davda, 34, the youngest chief executive in the Tata universe, tells Viveat Susan Pinto what the venture is planning as it attempts to scale up in a market where the cafe culture is evolving. Edited excerpts:
After Mumbai, Delhi and Pune, where do you plan to go next?
After stepping into Pune last month, we have just launched our second store in that city. By the end of this year, we propose to go to Bangalore, a market we are very excited about. The coffee consumption is very high in the South and it would be interesting to be part of the market there.
Are you targeting a December or March (2014) launch for Bangalore?
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As the need to maintain the pace of store launches grows, would you consider smaller retail formats?
We have experimented with a smaller retail format within a commercial complex (Indiabulls Financial Centre) in Mumbai, where we are located at the building’s lobby. To answer your question, we are open to these formats as well. Worldwide, Starbucks has smaller formats as part of its chain of stores. So far, we have marked our presence at high-street locations, malls, airports, metros, etc, in India. We have 10 stores in malls alone. Can we expand our footprint through conventional channels? Of course! Much depends on the kind of real estate available, the cities where we are based, the potential of that market, the consumer response to our products and stores, etc. We will do all it takes to go after market share, as we have a value offering I don’t see why we cannot achieve it.
Besides retail, worldwide, Starbucks is also into consumer products and food services. Would any of these verticals find their way into India?
Right now, we are committed to building a retail footprint for Starbucks in the country. I cannot comment on which other verticals would find their way into India. But worldwide, Starbucks has rolled out consumer products and food services based on the maturity of the market. By consumer products, I mean Starbucks coffee beans available outside its stores, at grocery outlets. That is a completely different model, requiring different skill sets. In the US and many other markets, Starbucks coffee beans are available at groceries. But these markets are mature, which allows for the growth and development of these business models. As far as India is concerned, at the moment, our attention is on the retail operations of Starbucks.
On Monday, you launched a new India-specific coffee blend. Now that you have made a start at your stores in Mumbai, Delhi and Pune, do you plan to take this localisation to the next level?
While local tastes are important in a retail business, consumers also want international fare. So, while local delights would find their way into the menu here, we wouldn’t do away with international offerings. In my view, a combination of both elevates the coffee experience for a consumer and that is what we are here for. The palate of the Indian consumer is evolving. They are open to local as well as international offerings and we would provide them with both options. However, our philosophy is clear — the food will complement the coffee, not over-power it.
