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Has this “Unique Third Place” captured the heart of the Indian consumer yet?

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Avani Davda, CEO, Tata Starbucks Limited.

Avani Davda, CEO, Tata Starbucks Limited.

The international coffee chain Starbucks entered India in 2012 amid great hype and in a span of 16 months has opened 34 stores. In a market already crowded with players like Café Coffee Day, Barista and Costa Coffee, Starbucks with its premium range of coffee had a tough task ahead but its aspirational value helped attract a set of elite customers loyal to the brand. One Cappuccino Grande at Starbucks can set you back by Rs 150 as compared to Rs 95 at Barista, clearly a difference which cannot be ignored. What helped was the joint venture with Tata Global Beverages which supported the brand in navigating the Indian market. But has the brand won the hearts of the Indian consumer? The exceptional in-store experience which it promises to its customers cannot work if coffee loving Indians cannot see value for money. Its elitist image along with the tendency to remain aloof may not go down well with Indians in the long run. Kanika Mehrotra from Pitch tried to make Starbucks shed its inhibitions and open up, as she spoke to Avani Davda, CEO, Tata Starbucks Limited.

How has the journey been for Starbucks in the Indian market? Has it been able to create a niche yet in the Indian market?
Starbucks locations are a community gathering place where people come together to connect over coffee and enjoy the unique Third Place. The foundation of Starbucks is built on the experience we are able to deliver to our customers each and every day. The Starbucks Experience is built on three primary components: our products, our places and our people.

We provide more than high-quality coffee. It’s that distinct Third Place, between work and home, with opportunities to connect with others over handcrafted beverages prepared by passionate partners, that make Starbucks unique and a destination for our customers.

How has the response been in India so far?
Our journey over the course of 16 months has been very gratifying and the venture has attracted acclaim from our customers in India. We are overwhelmed by the way in which our customers have embraced us with a lot of people making Starbucks a part of their routine and we hope to see this grow. We are committed to the Indian market for the long-term and we will continue to work thoughtfully to ensure we are exceeding the expectations of our customers and building a strong presence in the Indian market.

What is the India USP of Starbucks? Can you describe its positioning? Does it plan to remain an elite café chain?
We are passionate about delivering high quality coffee with an experience to customers and believe that every ‘moment’ is a moment of connection and recognition.
Our pursuit of innovation to improve the customer experience is core to who we are. Over the years, one of the strongest elements of the Starbucks Experience has been the value that people associate with the product and the experience. Customers come for coffee, stay for the inviting warmth and return for the very human connection. We have always believed in exceeding expectations – one person, one cup, one neighborhood at a time, to ensure we provide our customers an uplifting and enjoyable experience each time. We firmly believe that maintaining a fantastic customer experience is critical not just for a company’s survival, but to its sustainable growth, and we deliver this through our stores, our offerings and our people.
Indian consumers appreciate a quality experience, and we intend to provide just that. We use only the top three percent of the best Arabica beans that ensures an unparalleled coffee experience. This is what our customers come back for and this requires an unwavering commitment, strong brand values and responsible business practices. We aim to offer convenient locations for our customers wherever they wish to enjoy the Starbucks Experience .We believe in our strength to redefine the café market in the country by offering consumers the highest quality coffeehouse experience at a comparable cost.

You have recently opened the Starbucks café in Bangalore. Do you plan to enter the tier 2 and 3 cities also where the coffee culture is catching up? What will your strategy be for these markets as Starbucks is a premium chain? What are the cities you are looking at?
Since our foray in the Indian market in October 2012, we have opened 34 stores across Mumbai, Delhi NCR, Pune and Bengaluru. We understand the importance of offering a world class experience to our customers here at a value that reflects the quality of the experience.

Pumpkin Spice Frappuccino, hazelnut coffee and other flavors available at Starbucks’ Indian outlets are similar to the ones that customers get all over the world. How have you adapted to the Indian market?
Given the diverse and dynamic culture of India, we aim to ensure that we provide a unique values-based Starbucks Experience respectful of India’s strong culinary heritage and of local tastes and preferences. We are thrilled by the welcoming response received for our global favorites – Pumpkin Spice Latte/ Frappuccino and Hazelnut coffee. We look to surprise and delight customers with offerings that are unique to India but represent the global experience and product portfolio Starbucks is known for worldwide. We also believe great coffee deserves great food and we are therefore very selective in the food items we offer to ensure they complement our coffee and the third place. In each city we go, we introduce exclusive food offerings to cater to tastes and preferences of that region in addition to offering international favorites so customers have a wide range of offerings to choose from.
Our extensive beverage portfolio includes the whole bean coffees, like Veranda, House Blend, and Sumatra, as well as Starbucks VIA Ready Brew and Starbucks Reserves. We are also incredibly proud to launch the India Estates Blend – our special country-specific blend developed thoughtfully with Tata Coffee, for the Indian market to mark our first anniversary in the country.

Do you think Starbucks will contribute to the growth of coffee as a category in India?
The coffee consumption is increasing steadily year-on-year and there is a steady shift in consumer preferences here; coffee has transformed into a mainstream beverage with a national presence. Adding to this is the rate of growth of the café sector and the café business, increased consumer spending, heightened awareness and steadily increasing out-of-home consumption which provides great opportunities for us to share our high-quality coffee, handcrafted beverages, locally relevant food, legendary service and the unique Starbucks Experience with customers here. We are committed to the Indian market for the long term and believe in our strength to redefine the café market in the country and firmly believe in our ability to provide a unique, values-based Starbucks Experience to Indian customers.

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