Home >Industry >Retail >These are times to invest in business and expansion: Avani Davda

Mumbai: Tata Starbucks Ltd, a 50:50 joint venture between Starbucks Coffee Co. and Tata Global Beverages Ltd, is on track with its growth and expansion plans despite a slowdown in the Indian economy, according to Avani Davda, chief executive officer of the alliance in India. Since its launch in the country on 19 October, Tata Starbucks has opened 21 stores. In an interview on Thursday, Davda spoke about how the company wants to make the Starbucks brand an integral part of the Indian lifestyle, and retain the culture while expanding in the country. Edited excerpts:

Is the slowdown hampering your expansion plans?

Global cycles and economic cycles are what all businesses have to live with. As a company, we have such a strong brand that it is important to stay focused on your strategy. I am not saying disregard the rising cost of doing business, or the weak consumer sentiments. But these are times to really invest in business and expansion. It is a challenge to stay relevant to the brand. We are looking at offerings like Pumpkin Spice latte (a global seasonal offering). In no way are we shying away from investments in people or our expansion, and are on track with our growth plans.

Pune is the third city you are expanding into after Delhi and Mumbai. How do you plan to service this market?

As we open new stores, one philosophy we follow is that every new city is a new chapter. Pune is 150 km from Mumbai. In terms of a social trend we find that it is right for our kind of offering. We will cater to it (Pune) from Mumbai.

A cup of coffee at Starbucks is unaffordable to many in India. Will you rethink your pricing to widen your reach?

The Indian consumer is often perceived to be somebody who wants something which is cheap and cheerful.

Do you see Starbucks becoming an integral part of the Indian consumers’ life as it is in mature markets?

India definitely has the potential and opportunity. The domestic coffee market is growing in double digits. Having said that, cities like Mumbai, Delhi or even Bangalore and some other cities have a section of people who are already leading lifestyles similar to that in the West. We are here for the long-term. We will stay focused on how many consumers come back to us and how we can make Starbucks a part of their life, not force a cup of coffee on them.

You have spoken about the importance of training employees to imbibe the Starbucks culture in the past. How do you go about this task as you expand?

To us, the partner (Barista) is very important. We look at him or her as our internal customer. My deliverable is not just to make a store count or to make a profitable P&L (profit and loss). I think it’s much more. Training investment is a big piece. We believe, it’s a long term play. It’s not like you can open a store and bring a partner who is unprepared to handle this. So, in India we have done unique things like set up training programmes, which our partners go through for 4-6 weeks before they come to the store. This is additional investment.

The philosophy is not just to train them to make a cup of coffee. We do have another responsibility of offering our staff a good career. In the last nine months, we have seen people move to different levels and get promotions. Retaining good quality people requires this kind of commitment.

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