‘Indians love food,’ says Manmeet Vohra, director – product, marketing and loyalty, Starbucks. That explains why the Indian operations has the highest contribution of sales coming from food (at 25 pc) across all the markets Starbucks is present in.
We caught up with Vohra to learn more about Starbucks’ operations in India and how this market is different from the others it is present in. Edited excerpts:
At 83 stores in 3.5 years, Tata Starbucks in India is billed as the coffee outlet giant's fastest growth story. But there are challenges in India as the cases of competition tell us. From a marketing (and therefore, consumer) lens, how is India different from China (where you have over 2000 outlets)? How is it different from the US?
There are definitely lots of differences but there are also some unifying characteristics.
The ambience, warmth and partners exude the same warmth in India as you’d see anywhere in the world. Our stores across the world have this whole feeling of having some values from the neighborhood and fit into the culture beautifully. An example of this would be our flagship store in Hyderabad – it was design elements of Hyderabadi pearls within the store. Our flagship store in Pune has copper elements in the store design because the city has a history with copper.
Then, there are challenges like real estate availability. In the US, every neighborhood or corner has a Starbucks. But, you can’t really have that in India. You can’t really call any particular street in India a high street. That’s our number one consideration.
But, in the last three years we’ve tried opening stores at places our customers expect us and want us to be in.
The consumers (from different markets) also have certain unifiers and differentiators. The unifier is that everybody loves to be at Starbucks. Everyone wants to check-in at Starbucks.
The differentiator is that in the US, our peak hours are before 12 noon. In India, it’s the opposite, with peak hours starting after 12 noon. This is because the Western markets consume coffee as the morning beverage on the way to work. In India, the bed tea concept is still prevalent.
Another differentiator is food. Almost 24 to 25 per cent of our revenue comes from food, which is the highest across all the markets we are present in. Indians love food. So we’ve got a mix of international favourites and local flavours.
Is there a certain number of stores you want to reach by the end of the year? Also, do you want to expand beyond the six cities you are currently present in?
We are chasing the experience rather than the number. That’s the focus.
We want to make sure that the experience we are known for: ‘the third place’ experience, where people come for the coffee, stay for the warmth and return for the human connection. We want to make sure we do this consistently day-on-day first. Then, as far as retail estate availability goes, we will continue to look out for locations where we get the match, opportunity as well as where the customers want us to be.
The #MyMoodMyStarbucks campaign has generated buzz both ways. Initially, you said 80 pc orders are from the original menu. How has this changed?
The idea for that campaign was to help enable our customers to discover various ways of customising the Starbucks beverage.
People ended up ordering straight from the menu but didn’t know that there were 87,000 ways of customising a Starbucks beverage to suit the liking, mood or occasion.
The response we got was amazing. We actually got 1.33 lakh customers sharing their mood with us in three-week period. We wanted to encourage people to try, and we were overwhelmed, thankful and grateful for the response.
Even Chai joints are proving to be competition. Between customer acquisition, store expansion (and salience), customer retention, and yield improvement, what are the marketing priorities today?
There is no other player that offers the delightful mix that Starbucks offers. The emotional connect puts our brand aside. We feel in the three years in India we have developed a great connect with the customers.
Expansion and growth in number of stores is a natural evolution for any business. If you ask for a marketing strategy, our focus is on engaging our customers. Whether it’s through the #MyMoodMyStarbucks campaign, or the current Starbucks Summer Venture campaign, we are doing innovative campaigns. We are having so much fun with our customers at Starbucks this summer. We have stuff like happy hours, treat receipts and other offers going on.
We’ve had customers creating YouTube videos of completing tasks mentioned in the summer ventures campaign. There is one thing about putting an ad out there with your latest offerings, but there is more joy and satisfaction in engagement with customers.
Do you believe that the Starbucks customer is any different from CCDs? Explain.
I’ll tell you why customers come to Starbucks. Firstly, they know they’ll get the best Arabica Coffee in the world. Then, they get food which is worthy of the best coffee. They also get the ambience which is unmatched. Then there’s warmth and engagement with the store partners.
You mention store partners. Who do you call store partners?
Our store partners are those who make the coffee. Nobody is called an employee at Starbucks, they are all partners. It’s in line with the global belief and values. We are all in it together.
Do you want the customer to belong to a different profile? Which one?
We by nature of all the factors listed before, have a whole variety of customers coming in to our stores. In a way it gets hard to segment. But, it’s great to be able to cater to such a wide variety (of people).
We have students, young couples, young working executives and then families, who come in on weekends.
Isn’t that similar to the audience other coffee chains are getting?
The idea here is that we have different (kinds of) people coming in. Our corporate stores have people coming in for meetings. We also see people writing books sometimes. There’s no push to make people order. This is the place where you’re supposed to come and have a nice time. But, then there are people who come for multiple factors. There’s an ambience, and then being in the hands of an expert when it comes to coffee, is a factor.
The Alphonso Mango drink has returned this summer following a good response last year. But, what was the contribution of it to sales last year? What’s expected this year?
The Alphonso Mango Frappuccino was developed basis the insights we received from our store partners and customers. They wanted something more seasonal and fruity. So, we’ve cut no corners there and even added a Mango Mousse Cake as well. So, in terms of a beverage it became the number one selling Frappuccino last year in May and June.
Also, would summer be the biggest season for Starbucks in India? If not, what you classify as the biggest season for Starbucks in India where you see an increase in sales?
Typically, there are two big seasons – the summer and winter. Because of the Frappuccino line, there’s so much fun one can have around it with mix and match combinations.
In the winter, our Christmas beverages are extremely popular globally. People actually look forward to coming back to Starbucks for our Christmas special beverages.
We launch a new (limited time) beverage every 45 to 60 days. That keeps changing. We do the same thing with our food too.
But summer and winter would be the big seasons for sales.
While a lot of the Indian menu has a mixture of global and local flavours, have any of the global markets taken to the localised menu offered here?
Yes, some of the markets in Apac have taken a different twist on the Alphonso Mango Frappuccino. But, the puree that they’re sourcing is from India. It’s the first time something from India has made its way to the international markets and this is present across most of our stores in Asia Pacific.
Our food programme is actually a benchmark for the entire Apac region in terms of contribution to sales, and striking that mix of local and international flavours.