Sumitro Ghosh: A winning brew closer home
The CEO of Tata Starbucks on expansion, aspirations, and the Indian love for red velvet cake
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Sumitro Ghosh believed at one point that he could become the first person of Indian origin to play Major League Baseball in the US.
The reason he ended up as the chief executive officer of Tata Starbucks Pvt. Ltd—the 50:50 joint venture between Tata Global Beverages and Starbucks—is that he “messed up” his arm in high school and could not play his favourite sport any longer.
Over 6ft tall, the self-confessed “big guy” now manages some recreational tennis in Mumbai—thanks to generous friends with club memberships—when he is not providing strategic direction and plotting the company’s expansion in India. Ghosh says this is the fastest growing international market in the history of Starbucks Coffee—the company completes five years in the country this October.
Ghosh and I are sitting across a small table in a corner of Starbucks’ 93rd outlet in the country, a coffee shop with a new concept, in Lokhandwala, Andheri. This is the first of its Indian outlets to introduce different brewing methods and machines—like a White Eagle espresso machine, a siphon, pour-over and Chemex coffee maker.
It’s 4 in the afternoon, and the outlet is packed. The place smells of roasted beans, reheated food and newness—our meeting is happening barely a week after the outlet opened on 25 May.
This is one of the brand’s smaller outlets, chosen because they wanted to be present in a neighbourhood that’s home to movie and television actors, models and people with lifetime gym memberships.
Ghosh has just wrapped up a television shoot and happily takes off his checked jacket, worn over a dark grey shirt without a tie. Unlike cold and windy Chicago, where he was based till he moved to join Starbucks here in January 2016, Mumbai in May is not jacket-friendly.
The 50-year-old grew up in the suburbs of Detroit, Michigan, where his father, Subrata, a metallurgist, worked as a teacher. Subrata used to work at Tata Steel, which sponsored his PhD in Birmingham, before he moved to the US. He had promised Ghosh’s grandmother in Kolkata that he would return in two years—but he never did.
“The unique thing about my coming back (to India and joining a Tata joint venture), is that my father was supposed to come back to Tata Steel, and I say in the long term I was the return on that investment—after a 60-year-gap,” says Sumitro Ghosh with a laugh.
As an Indian child growing up in the US with two brothers, fitting in socially was top of the agenda, he says. He was good at sport, could defend himself since he was a big guy, and did well, not surprisingly, in math and the Spelling Bee.
In 1995, Ghosh joined the American fast-food company Yum! Brands as a district manager, holding several roles in store development, franchise and company operations. His last role was as a region coach in 2003. After spending close to a decade at Yum! Brands, in 2005, he joined the American food and uniform service provider Aramark as a regional vice-president, and stayed with it for more than three years. That’s until he succumbed to Starbucks’ relentless pursuit. They called him every year for four years.
The year he joined, 2008, was one of Starbucks’ worst. Two weeks after he joined, they shut down 600 outlets. The “most challenging time” in Starbucks’ history was a fascinating one for him, a great learning experience.
Eight years later, with the younger of his two sons past high school, came the opportunity to move. “I had a couple of choices—I had worked in the same geography for eight years, ran the market in Chicago…one of the three options was this small little business burgeoning in India.”
But the family—sons Sam and Adam are in college in the US and daughter Grace in school—did not whoop with joy at the idea. His American wife, Susan, was reluctant to move to India; she had never been here.
But the thought kept gnawing at Ghosh. He had last visited India when he was 3—most of his immediate family was in the US or UK. There were some stories and memories he wanted to deal with. It was also a chance to help connect their children to their heritage.
After the “no way we can, no way we can’t” phase, they sought multiple opinions and waited for some to say, “Are you crazy?” Nobody did; in fact, everyone seemed to believe it made complete sense. The decision seemed to be making itself.
Now, Susan is amazed at the local culture, Grace is happy in grade 8 at the American School of Bombay. The family, including Ghosh’s mother, is settled in Bandra, chosen because it’s closer to Grace’s school—his office is some distance away, in Lower Parel.
“There have been challenging times,” he says thoughtfully. “For instance, when we first visited this park with the boot (Kamala Nehru Park), Susan was taking pictures of the boot (a large shoe-shaped structure). She was wearing a long dress and she noticed that people were taking pictures of her! ‘Is this how you feel like in America all the time?’ she asked me. Now, this place has exceeded her expectations.”
Professionally, he says, he had an advantage because (former chief executive officer) Avani Davda and her team did an “unbelievable job of sharing that culture, those values” with employees. The difficulty, for him, was the 10-7 timing.
In the US, activity peaks at Starbucks between 7-9am, and they used to start early to catch that peak. Adjusting to 10am as the starting point was strange. “I would land up at 8.30 (am) and it’s (like) a ghost town. I am done at 6 (pm), I am walking out and people are still working; that was the hardest.”
With 37 outlets in Mumbai alone, Starbucks is now becoming visible in every neighbourhood.
Its formula of cheery staff, aesthetically designed outlets, loyalty points for customers and a relatively wide choice of food fits into what Ghosh calls Starbucks’ culture and ethos.
They have adapted, he says, to India, so what and how they sell is not surprising. India sees top food sales for the company, for unlike the West, coffee shops here remain places for social outings, and not just places of solitary consumption or “on the go” takeaways. They make sure every outlet has an oven, because customers even like their Greek salad wrap—meant to be eaten cold—heated.
Unlike in the West, customers tend to visit coffee shops here with someone 60% of the time, he adds. It’s a habit that will change as people build a relationship with the Starbucks outlet they frequent and are comfortable visiting on their own too.
Ghosh also confirms my suspicion—people in India like the sweet stuff. Sweet drinks and chocolates do well in Starbucks, but while their top-selling item across the world is the blueberry muffin, the winner in India is the red velvet cake. “As a Bengali, I completely understand that,” he says, grinning.
Food, though, controls only 23% of all sales in Starbucks.
As he pauses for a sip of his latte—Ghosh usually prefers an Americano—I remind him of the new Starbucks survey (bit.ly/2rvLHbE), called Latte Index, by US data-analysis firm ValuePenguin, which says India is among the five most expensive countries in the world for a tall latte.
“We are an aspirational brand,” he says, explaining they spend more on outlet design in India and have to import several items.
The company opened 25 outlets in the first year (2012-13), and only 10 last year. But it has already overtaken that number (10) this year, and hopes to open more outlets. Their growth is responsive, he says, reliant on where people shop and on retail trends, so “there’s no formula”.
Though they have a presence in six cities, new markets are waiting to be discovered—among them, Kolkata. “As a ‘Ghosh’, I feel responsible,” he says with a guffaw. “But at the end of the day, there is no major market we wouldn’t be in.”
Having spent a year and a half in this position, he says the “unique-est” thing he has seen is that “you can sit in a Starbucks anywhere in the world and it will look and sound just like this. There is nothing different.”