Tata young gun quits Starbucks

Avani Davda, youngest CEO in group, leaves after 13 years

The email came in at 2 pm on Thursday. It told Tata Starbucks employees and partners that their chief executive officer Avani Davda was quitting.

Tata Starbucks is an equal-stake joint venture between Tata Global Beverages and Seattle-based Starbucks Coffee Company. Davda, now 37, became the youngest CEO in the Tata group when she was made the head of Tata Starbucks at 33. In the internal communique, she did not reveal where she was going but it was clear that she would be moving out of the Tata group, which she joined in 2002.

"I have made the difficult decision to leave Tata-Starbucks to pursue other opportunities. My career with the Tata Group has been blessed with numerous experiences to help build and lead some of this great company's most important and exciting endeavours. So, while I will dearly miss working with all of you, I am excited about the opportunity ahead as I embark on the next stage of my career," she said.

PORTRAIT OF THE CHIEF

Name: Avani Davda
Age: 37
LAST DESIGNATION: CEO of Tata Starbucks. She announced her resignation on Thursday
CLAIM TO FAME: Youngest CEO in the Tata group; appointed to the post when she was only 33

CAREER AT TATA

• Joined in 2002 as a Tata Administrative Officer
   
• Worked as chief of staff at erstwhile Tata Sons Director R K Krishnakumar's office, looking after consumer, retail and real estate businesses

EDUCATION

• Masters in management studies from NMIMS, University of Mumbai
   
• Bachelor degree with honors in advertising & media from H R College of Commerce and Economics, Mumbai

PERSONAL LIFE

• Married; has a son

Replacing her is Starbucks's US executive Sumi Ghosh. A vice president at Starbucks' Midwest region in the US, he will now move to Mumbai from Chicago to take up his new position on January 1, 2016.

"Sumi and I will work closely together through early-February to ensure a seamless transition," Davda said in her letter to employees and partners. Under Davda, Tata Starbucks launched close to 80 stores in three years across the country. It also narrowed its losses nearly 10 per cent in its second full-year of operations, 2014-15.

The joint venture first opened its doors in October 2012 at Horniman Circle, near the iconic Asiatic Library in Mumbai. Revenues touched Rs 172 crore in 2014-15, from Rs 95 crore a year ago.

Davda spent the first six years of her tenure at the Mumbai-based group as the chief of staff at the erstwhile Tata Sons Director R Krishna Kumar's office. She oversaw the hospitality, beverages and real estate businesses. This was enough, say group sources, to give her a sense of how a retail business operated.

A source said: "It requires one to have a finger on the pulse of the consumer as well as understand which location can drive footfalls. She had both."

Perhaps that's why though the coffee retail business in general has seen some strain because of a sustained slow down, Tata Starbucks has managed to hold forte, launching stores aggressively.

Experts say the success of Tata Starbucks can also be attributed to the backing of the Tata group, which has the real estate and the financial muscle to sustain operations.

Ghosh, who takes over from Davda, however, will have the task to steer the ship in a competitive retail market, where the fight for footfalls is increasingly coming from fast-food brands rather than coffee chains, experts said.

"Today, McDonald's has a McCafe, and fast-food chains in general are beginning to look at beverages beyond colas," said Arvind Singhal, chairman, Technopak.

The road ahead for Starbucks is both interesting and challenging in India.