Starbucks celebrates 10 years of presence in India this year. The Tata-JV has been a smooth yet slow sail for the coffee major which operates over 32,000 cafes in 80 countries worldwide. The company operates 300+ outlets in India as of Oct. 22. It is expected to cross 400+ locations exit FY 23-24, given the pace of expansion post Covid-19 led lockdowns.
The company’s share of takeaways incl. delivery through Food ordering Apps such as Zomato, Swiggy, Dunzo, etc. has seen a major tilt pre-2020 and now. What was less than 5% before the lockdown is now nearly 20% and as high as 40% at a few cafes where there is a large corporate crowd around. What was once the Founder-CEO Howard Schultz’ contention that the cafe is the third most preferred place after home and work has seen a tectonic shift after the pandemic stuck. Initially, customers feared stepping out of home followed by staying long hours in an a/C environment due to a faster spread of the infection. This was followed by a takeaway/ order online + delivery culture which has been growing in India over the last 12 months. Yet, most of the ever-busy cafes are buzzing all the time with crowds in-store.
One complaint by most Indians visiting SBUX has always been that the cup size is way too big by Indian standards. Firstly, coffee is not the mainstay beverage for most Indians, rather it is Tea (chai). Second, for most of India’s aspiring middle class, 150-200 ml is the standard measure of any hot beverage. As the concoctions at Starbucks varies, the cup size is much larger and by the time one consumes it halfway, the beverage is already cold (for hot beverages) and very fluidic for cold beverages.
To circumvent this, the world’s largest cafe chain has lunched a new size – Picco – which could perhaps satiate the needs of its discerning customers. The move is very similar to the Maharaja Mac which McDonalds launched 2 decades back after entering India. Similarly, Pizza Hut and Dominos have very-Indian flavours and toppings. Subway operates a separate Veg & Non-Veg counter at its parlours, something unique for India where it runs over 1,000 outlets as against the global tally of 40,000+ franchised locations. Starbucks India has, however scored well on its food offering, with a number of Indianised options unlike other cafe chains including CCD. The share of Food is the highest in India at Starbucks at ~30% or so, according to market estimates, while it is ~15% for competitors.
The chain opened its first cafe at Bangalore International Airport’s Domestic Terminal T1, recently.