Avani Davda: Scaling back for more
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I have a reputation for being very demanding and I speak my mind,” Avani Davda says suddenly, in the middle of our conversation. We are meeting at the Prabhadevi outlet of Nature’s Basket, Godrej’s premium grocery retail chain, in Mumbai. It’s a fitting place to discuss her career—Davda, 38, is the managing director of Nature’s Basket. On the floor above is a sprawling Tata Starbucks, the retail coffee chain she previously headed.
We are walking through the store’s cereals section, where she stops to fix a signboard that is slightly askew. Davda, who became the youngest chief executive officer in a Tata group firm at 33, speaks in a measured tone as we talk about her move to Nature’s Basket from Tata Starbucks Pvt. Ltd.
“Two things attracted me to Nature’s Basket,” says Davda. “One was, if I had to move out of Starbucks, then what would be a company I would be happy working with?”
The second, Davda says, was working with a young and dynamic leadership under Tanya Dubash, executive director and chief brand officer of the Godrej Group, and Nisaba Godrej, executive chairperson of Godrej Consumer Products Ltd. “What I find exciting is that the leadership in the family is fairly young and approachable,” she says. “They give you a lot of freedom.”
The challenge was to help turn around a business that had a strong brand name but lacked the right fundamentals.
When Davda took over in May last year, Nature’s Basket had not made any profit since its founding in 2005. Even as revenue rose 30% year-on-year to Rs271 crore in fiscal 2016, losses widened 46% to Rs62.29 crore.
Nature’s Basket was running 37 outlets across five metro cities till March 2016. And this was a time when grocery shopping in urban India had begun moving online, with BigBasket, Grofers, and even Amazon and Flipkart, having started such services.
“A year and a half ago, there were a lot of things going on in the industry,” Davda says. “You had e-tailers, you had giants coming to India. You started seeing a lot of consolidation. There were a lot of questions about whether offline retail would really exist.”
So the first 10-12 weeks of her new assignment were spent understanding what exactly needed to be fixed at Nature’s Basket.
“Because I had a lot to learn, I was coming from a coffee chain to a new format in retail....
“We were a great brand but there was a lot of stiffness in it,” Davda says. Nature’s Basket has since changed its mix of products to focus more on everyday-use items, including fruits, vegetables and dry staples, rather than specializing in gourmet, imported ingredients. Its new tag line is Daily Food Delights.
“The strategy was to become a neighbourhood store,” says Davda. She is betting on people coming to the stores for quality everyday products, which will help drive up volumes and customer loyalty.
In March, Nature’s Basket closed all its stores in the National Capital Region (NCR), choosing to expand instead in Mumbai and other parts of western India. It started selling online in Delhi-NCR.
“I respect the way the group supported us through all of that,” she says. “When we were designing this transformation, taking the people decisions was the toughest job—to walk away from a market like Delhi. But we decided to scale back, fix the model and then move ahead. So taking these tough decisions helped,” Davda says.
As of March, Nature’s Basket had 26 stores in three cities—Mumbai, Pune and Hyderabad. The retailer closed fiscal 2017 with a 15% rise in revenue over the last fiscal, to Rs310 crore, although its losses also rose nearly 50%, to Rs95 crore.
While Davda has been working on this turnaround plan for nearly a year, the newly rebranded stores are only just coming up now, with the first being “relaunched” in south Mumbai’s Warden Road area in September. Another rebranded store came up in November near Worli.
Davda’s biggest learning came in the aftermath of the Mumbai terror attack of November 2008, when she was working with the Taj group of hotels. She says the experience taught her how a business should react humanely during an unprecedented crisis.
“It was a once-in-a-lifetime situation. When we saw how the leadership and the group as a whole reacted; they didn’t let any of the staff go and they knew the hotel would be renovated for a year. I think those things make you not just a tough decision maker but more human.”
At Starbucks, she says, the hardest part was knowing that individual cafés needed to break even by a certain date.
“I think the fundamental learning in retail is that whenever you open a store, the rubber hits the road,” she says. “At Starbucks, they’re very focused on getting each store profitable. There is a lot of discipline and rigour in each decision.”
I ask her how she defines herself as a woman in business whom others look up to as a role model.
“I had very contemporary, very liberal-minded parents,” she says. “My mom, when she got to know my dad, he was doing engineering. She could have got into a medical college herself but she chose to be a homemaker because that’s a choice she wanted to make.”
Davda grew up and studied in Mumbai. She graduated with a master’s in business administration from the Narsee Monjee Institute of Management Studies in 2002 and then joined the Tata Administrative Services. She went on to work at other Tata companies, including The Indian Hotels Company (which owns the Taj chain of hotels) and Infiniti Retail Ltd (which owns Croma), before she was picked for the job at Tata Starbucks.
Maybe because of her parents, or the fact that she grew up in Mumbai with equal access to opportunities, Davda says she never consciously thought about making feminism a cause in the mould of, say, Sheryl Sandberg, whose philosophy of “Lean In” has become a catchphrase in discussions on gender diversity in the workplace.
Davda says she was “stumped” in 2012 when her appointment as CEO of Tata Starbucks India made headlines. She was widely cited as among the most powerful women in business.
“Personally, I never realized it was a big issue, maybe because I had the opportunities and a lot of people took risks to help me get where I was. But I was stumped when it became newsworthy,” she says. “I come from a family where women work—they’re doctors, they run businesses, and they’re homemakers.”
Davda says that perhaps society has begun “over-obsessing” about the role of women today. Her mantra, she says, is very simple—be very sure about what you want. “My mum would tell us, ‘do whatever you like but don’t grow old and regret it.’”
“A woman needs to know what she wants. If I’m not happy waking every day at 6am and driving my son to school, I’m going to crib about it every day. But if you have the choice to not have children, please go and work. I think women somewhere down the line illegitimize what they really want because of the pressure of social norms or the way they’re brought up or from their friends and family.”
She says she has chosen to be very articulate about what she wants. Her decision to stay and work in Mumbai was guided by her desire to remain close to her husband Vishal, an entrepreneur and founder of Mumbai-based start-up Shivinc Food Science Pvt. Ltd, 10-year-old son Param, and her in-laws.
“I remember when I was evaluating going to Seattle (headquarters for Starbucks), and my father-in-law, a 70-year-old Gujarati businessman who never saw his wife work outside the home, told me, ‘go for two years and we’ll look after everything,’ and I was like, seriously?” she recalls.
Women in higher positions are looked at as examples of how to successfully balance work life and family. For Davda, it’s important to look at gender diversity through meritocracy.
It’s more important to have women where it matters, she says, rather than in token positions, like on the boards of directors of listed firms, a requirement made mandatory by the Securities and Exchange Board of India in 2015.
“Boards are okay, right? But you should look at where decisions are made—at the store levels, the middle-management level, senior-management level—that’s what we need,”
But it remains important to keep family in mind when considering these work-front battles.
“I think my son and my husband are very important to me, they keep me sane, they make sure I have a life outside (work). I am passionate about a few friends,” she says. “One extreme is working with people who are so ambitious they believe a visiting card is their identity. But then I think life will be tough because you’re alienating everyone.”
Reading with her son and travelling with her family is Davda’s escape from her MD identity.
“I don’t like to see a foreign country without my family or friends,” she says. “So I’ve seen Melbourne for just 48 hours and I told Param—in the next three-four years, we have to go there. I think he’ll love it.” Davda was in Australia in October for work but decided she would only explore the cities she was staying in on a family vacation.
The conversation comes back to seeking an identity beyond work. Davda says she is still formulating it.
“At some point, I hope I can work in something meaningful, beyond a for-profit organization,” she says. “And I’m afraid of that, given my personality and my shortcomings as (someone who has) always been a professional. But when I see my friends do it, I hope I can make a difference in a small way.”
Some of her friends, she says, quit lucrative jobs to focus on family and projects outside work.
“But what I would do, I don’t know, I’ll have to figure that out.”