From airports to highways: what’s driving Starbucks’ expansion and growth in India?

Tata Starbucks will celebrate 10 years in India this year and with a growing base of coffee lovers across the country, the brand is also aggressively expanding its footprint and launching stores in new markets. The company has increased its presence at airports nationwide and has also upped its delivery game.

He recently announced a partnership with designer Sabyasachi Mukherjee to launch limited-edition products. Storyboard18 caught up with Tata Starbucks CEO Sushant Dash on the sidelines of the announcement, where he spoke about the company’s expansion strategy, new initiatives and the brand’s affordability factor.

Edited excerpts.

Tell us about the brand’s association with Sabyasachi for the limited edition merchandise line. And generally, how do these collaborations work for the brand?

We were looking to collaborate with someone who brings Indian tradition but does it in a modern way. And we wanted to do it with a brand that brings something special to the consumer. But more importantly, we also wanted to do it with a purpose.

The idea was not just to think of it as a merchandise collaboration, but to do it for a purpose. At Starbucks, it’s something we’ve always believed in and it’s part of our philosophy. Girls’ education is one of the things we are working on. We have been associated with the cause for three years.

Diversity and inclusion is an important facet of what we do. We have promised that 40% of our workforce will be women. We are one of the first QSRs to have 100% pay equity. So it was important to move forward and give back to the community to educate the girls. Thanks to this collaboration, we really do. A portion of the proceeds will go towards a purpose.

Tata Starbucks will be celebrating 10 years in India this year, tell us about the trip so far. How has the brand evolved?

The trip was phenomenal. I don’t think when we started we expected the brand to have that kind of acceptance. We knew there was a latent demand. Starbucks was an international brand, it was ambitious. But today, the fact that we are present in 27 cities in the country, that we have more than 270 stores and the type of business that we have managed to establish, I did not think that we would do it in 10 years.

Even when you saw that queue outside the store on launch day 10 years ago?

(Laughs) It gave you confidence and made you feel good, but maintaining that for 10 years and continuing to grow and have the same kind of love through, even beyond the subways, it gives you a real thrill in some ways. And the brand has now become an integral part of what this country is.

What triggers the expansion and what is the way forward?

We are growing and the last 12 months have been particularly good. We opened 50 stores in the last fiscal year. I think there is potential and we are now confident. We have been there for 10 years. We know what it takes to succeed. We are more confident about our consumer acceptance.

That’s why we’ve also expanded into even the smallest markets, which we might have been hesitant to enter 5 years ago. Wherever there is a consumer for Starbucks, the idea is that we will go there. Other than that, the challenge is real estate. You need to get the right kind of real estate that does the brand justice.

You’ve worked on both the coffee and tea side of the business. What are the trends that are redefining the beverage industry?

As Indians, we love our food and our drinks. And we are ready to experiment. In general, food and beverage is a growing industry. The QSRs are multiplying. We are therefore well placed on both sides. If you ask me, tea remains the fundamental drink in this country.

When I say tea, it’s Indian kadak chai that people love. It’s what you still drink, even at home, twice a day. But what happens is that people are willing to experiment. They watch other drinks in between and there are new drink occasions happening.

And in many cases, in some advanced cities, with consumers who have been exposed, coffee is becoming a habit again. And I’m talking about non-southern markets. In South India, of course, coffee has always been an integral part of their drinking habits.

Along with expanding and entering new markets, is Starbucks working to make the offering more affordable for the Indian consumer?

Affordability is about value. I think one of the things I’ve realized in my many years of working in the Indian market in FMCG and retail is not price it’s value that you bring to the table. As long as we provide that value in terms of warmth, connection, ambiance and accompaniment in terms of food, if they see the value in the drink, people will come.

Starbucks is present in many airports across the country. How did it work for the brand?

It was actually the goal. In the last 8 weeks, we have opened 8 new stores in airports. Airports are an area we focus on. As India grows and the economy grows, the airports are also getting modernized. There are more consumers now traveling by air or traveling in general.

This opens up another way for us to meet our consumers. But that said, it’s not just about airports, we are even present on the highways. The infrastructure has improved. So these are newer segments that give us the opportunity to connect with our consumers. So we’ll go there.


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