Laxman Narasimhan, global CEO of Starbucks famously plays the role of a barista once a month at a different store every time. “Our life is in these stores. It’s with these partners. It’s why I work. And so it’s important to keep that going and to stay really connected to the team,” he says.
Starbucks has 460000 partnerships like the one with the Tata Group. Narasimhan is banking on them to accelerate growth of the brand in the next 50 years. This is all part of his ‘Triple Shot Reinvention’ strategy.
“What it does is it gives us growth of 5 percent in the long term, double-digit revenue growth, and earnings growth in the 50 percent plus range. All that put together helps us in a creative financial result. While doing so, we meet the needs of all the stakeholders: we have partners, customers, the farmers and coffee, the community, as well as the environment,” Narasimhan said, explains the strategy.
Starbucks’ India business has recently crossed Rs. 1000 crore in revenue with just 390 stores. Narasimhan said that increasing the store count is an aggressive agenda the company is working on for India. “I’m really excited by India and what is happening here… the country is poised for take-off. If you look at last year, we opened one store every five days; we’re now moving to one store every three days,” he added.
With this development, Narasimhan asks, ‘What are we now doing for the other two days?’ There are things in the pipeline. Curating special products designed to cater to the Indian palette and bringing the flavours of India to the world. The head honcho of Starbucks said, “We’re working on things that are accessible, the Picco price point, and the filter coffee. And so all that’s just for India,” he says, and with a smile adds, “We’re going to have, early this year here in India, the Starbucks Reserve Monsooned Malabar. That’s a tremendous plan. I bragged about it actually the other day: this is going to be in all US stores in the middle of the year.”
The brand also plans to leverage artificial intelligence to make its supply chain system more efficient. In India, Starbucks is already working with Tata Coffee on this to improve the quality of the product, efficiently work with farmer partners to increase output while educating them about technologies and try and grab hold of India’s large tea-drinking population.
“We have a very long-term view to investments and returns. What we know we’re doing is we’re creating a third leg of the stool in our global markets… We will invest and you can expect in India that we will invest,” Narasimhan said.
Currently, USA contributes majority of Starbucks’ global revenue. China contributes a little less than 10 percent to revenue. Narasimhan said that he wants to extract more from the the 86 other markets that Starbucks has a significant footing in.
“You have got to recognise the potential of the headroom we have in all of them as we build out this third leg of the stool. In terms of stores, India is at about 400 stores, but we have 38,000 stores globally. Our plan is to get to 55,000 stores over the course of the next five years, with three out of the four stores being outside of the US, India will also have a big role in this,” said the CEO.