Looking at the preference of customers in the country for bite-sized foods and small portions of beverages, Tata Starbucks has introduced its products accordingly. It has offers starting at Rs 160 for foods and Rs 185 for beverages.
“The picco size, which is six ounces (one ounce is 28.38 gm), or bite-sized, is more about what the consumer wants rather than being affordable. They’re more familiar with and more comfortable having smaller sizes, or there are certain parts of the day when they are looking to eat less or want to have smaller quantities of food than the larger amounts that maybe we serve normally,” Sushant Dash, CEO, Tata Starbucks, told Business Standard in an interview.
However, Dash said this step was not to make its offers more affordable but to meet the requirements of the consumer. Affordability is more a by-product of catering to customers’ needs for smaller sizes.
“Smaller sizes help to make our products more affordable but that is not the primary cause,” Dash said. He believes Indians are as price-conscious as they are value-conscious. “As long as we are offering good value, the consumer is prepared to pay the right price,” he said.
“The reason behind all of what we are doing is to ensure that we get the consumers to come more often. Some customers have told us that if they’ve gone to Starbucks between meals, they don’t find anything bite-sized. Also, when customers go out in groups, they like to share.”
The company has significantly increased its Indian offers by adding masala chai, elachi chai, and milkshakes among beverages and it is offering freshly assembled foods as well. It offers pre-packed sandwiches and other food items. It is also looking to refurbish around 50 stores. The company had started this on a pilot basis in Bengaluru, Indore, Bhopal, and Gurugram. After receiving an encouraging response, it has decided to roll out the plan nationally.
In FY23, Tata Starbucks’ top line surpassed Rs 1,000 crore (Rs 10 billion) with growth of 71 per cent. During the January-March quarter, Tata Starbucks recorded a revenue growth rate of 48 per cent. Dash said the reason behind this growth in revenue was due to store expansion and entry into new cities. Tata Starbucks opened 71 new stores and went into 14 new cities. It opened 35-40 per cent of its cafes in the past 24 months. “It is not just growth coming from the expansion, but it is also growth coming from our same stores,” Dash said.
