Will keep introducing innovations in beverages and food: Tata Starbucks CEO

The coffee penetration in the country is around 14-15 per cent, and at a cafe level, around 25 per cent for the affluent section

Starbucks India launched its first experiential store in New Delhi’s Punjabi Bagh on Thursday. Amid a sustained slowdown in the quick-service restaurant (QSR) sector, the coffee giant aims to open 1,000 stores by 2028. SUSHANT DASH, chief executive officer of Tata Starbucks, speaks with Akshara Srivastava about how the new store aligns with the company’s strategy of driving growth through innovation and more. Edited excerpts:

This is a new concept that you’ve introduced in India. What is the idea behind it, and how does it differ from a reserve store?

The new experiential store is essentially Starbucks tailored for India, featuring menus from various Indian regions. For instance, it includes the Malabar Coconut Crème Latte from Kerala and the Cocoa Bird’s Eye Chilli Latte inspired by Meghalaya.

The reserve store is a more global concept, and we will be opening a second one later this year. Both concepts will coexist as we move forward, and we plan to expand the experiential format based on consumer feedback.

The QSR segment has faced challenges over the past few quarters, and you reported muted profits last year. How do you plan to address this slowdown?

The category is growing with a lot of headway. Coffee penetration in India is 14-15 per cent and about 25 per cent among the affluent. In a tea-drinking nation, people are still adapting to coffee, partly due to our efforts over the past decade.

Growth is promising. Our role is to create more demand. We currently have 446 stores in 65 cities and will remain focused on expanding.

With increased activity in the coffee café segment and intensified competition, what makes consumers choose Starbucks today?

We are continuously innovating, whether through store formats like the new experiential store, new coffee varieties, or product offerings. As the category evolves, we will keep introducing innovations in beverages and food. Last year, we added 66 new food items to our menu.

In beverages, we are exploring new options and trends. For example, we launched ‘Refreshers’ to cater to the younger generation’s preference for non-dairy alternatives. We are now focusing on cold brew and its various flavours.

We source only the top 3 per cent Arabica beans. Few companies or brands can match the level of expertise or dedication we bring to the table.

There has been a big change in your global leadership. How does that impact operations in India?

There has been no change. We have a well-thought-out strategy in place, and both partners are fully aligned with it.

How have your merchandise partnerships with fashion designers Sabyasachi and Manish Malhotra performed?

Partnerships are an integral part of the global Starbucks brand. Both collaborations in India have been very successful, selling out within weeks of launch. We will continue to seek similar collaborations that bring an Indian-ness to the brand.

Do you plan to list your merchandise and coffee packs on quick commerce platforms?

We will evaluate this option. Currently, we are not considering it as we feel we are too small for such platforms, but we will keep an eye on opportunities and options in the future.