Starbucks is intensifying its focus on rapid expansion and affordability in the Indian market, according to Sunil D’Souza, the managing director of Tata Consumer Products. Operating the world’s largest coffee retail brand in the country, Tata Consumer Products is witnessing increased competition in the coffee cafe chain market, with at least half-a-dozen new players entering the scene.
“In India, we do see heightened competition, but I would say we should not miss the woods for the trees. We are focused on how quickly we can expand the footprint of Starbucks in an affordable manner,” stated D’Souza.
The Indian division of the Seattle-headquartered coffee retailer, contending with Costa Coffee, Cafe Coffee Day, Barista, and emerging competitors like Pret a Manger, Tim Hortons, Third Wave, and Blue Tokai, manages a network of 370 stores across 49 cities in India.
In the current fiscal year, Starbucks plans to increase its store count by 80-100 outlets, marking a considerably accelerated pace of expansion compared to previous periods.
“Every year, we see this (cafe) space expanding. Coffee is growing and tea is flat lining. So there is space for substantially more outlets than what exists today in the medium to longer term,” said D’Souza.
During the fiscal year 2022-23, the collaboration between the Tata Group and Starbucks achieved its most rapid expansion to date, with the opening of 71 new stores.
In June, Starbucks responded to heightened competition and aimed to capture a larger market share in tier-2 and 3 markets by introducing smaller-sized, more affordable beverages.
Café chains in India are experiencing a faster growth rate compared to quick-service restaurants (QSR), driven by the increasing demand from younger, aspirational consumers. According to a Statista Research report, the coffee cafe franchise market in the country is valued at ‘4,500 crore, with an annual growth rate of 8-9%.
In the post-earnings management commentary, Tata Starbucks identified India as one of its key growth markets, having surpassed 1,000 crore in sales during the fiscal year 2022-23.
“It’s about how fundamentally, out-of-home coffee consumption is going to continue to power up. This is happening as the GDP grows, as disposable incomes grow and consumers start to become more aspirational,” D’Souza said.
The coffee market is outpacing the growth of tea nationwide, a trend observed not only in major metropolitan areas but also in smaller markets. Brands are strategically targeting both smaller cities and large metros. Investors are showing confidence in this trend, as evidenced by significant funding rounds for new cafe chains. In January, Blue Tokai Coffee Roasters secured $30 million in funding led by A91 Partners, while Third Wave Coffee Roasters raised $20 million from WestBridge Capital last year.
Starbucks is also setting up stores on highways, in response to the “mindset of people when they are driving”, said D’Souza. “There is a lot of traffic that comes to highway stores. So from a P&L (profit and loss) perspective, it makes a lot of sense…”
Punjab Grill, renowned for its exceptional North Indian culinary offerings, is swiftly expanding, unveiling its newest location in Defence Colony, Delhi.
The expansion underscores the robust demand for genuine Punjabi flavors in the city center. Adding to the excitement, additional outlets are scheduled to open later this year, firmly establishing Punjab Grill’s culinary footprint in Delhi.
“We are excited to bring the quintessential flavors of Punjab to Defence Colony. Our commitment to quality ingredients and time-honored cooking techniques ensures that every dish we serve is an authentic culinary experience. We look forward to welcoming both our loyal patrons and new guests to our latest outlet,” shared Rohit Aggarwal, Co-Founder and Managing Director of Lite Bite Foods.
The newly launched Punjab Grill establishment in Defence Colony sets a new standard for dining, appealing to patrons of various age groups. Combining contemporary aesthetics with the comforting embrace of traditional Punjabi culture, this restaurant delivers an extraordinary culinary experience.
Punjab Grill seamlessly combines tradition and innovation in its diverse menu, featuring succulent kebabs like Dahi Ke Kebab and Chicken Malai Tikka, flavorful curries such as Butter Chicken and Dal Punjab Grill, a variety of bread options including Laccha Paratha and Garlic Naan, and delightful desserts like Gulab Jamun.
Punjab Grill has consistently delivered an exceptional dining experience and is dedicated to upholding its reputation at the new Defence Colony location.
India inked deals to export approximately 500,000 metric tons of freshly harvested basmati rice, capitalizing on strong demand from leading purchasers in Europe and the Middle East, according to traders’ reports on Wednesday.
Every year, India ships over 4 million tons of basmati, a premium long-grain variety renowned for its fragrance, to countries such as Iran, Iraq, Yemen, Saudi Arabia, the United Arab Emirates, and the United States, among others.
Rice holds a significant market share in Europe as well.
In June, India implemented a ban on the export of non-basmati white rice to stabilize domestic prices. Subsequently, in August, the country established a floor price, also known as the minimum export price (MEP), setting it at $1,200 per ton for overseas sales of basmati.
Nevertheless, due to the impediment posed by the floor price on the export of the premium variety and the burden it placed on farmers dealing with substantial stocks of newly harvested rice, the government opted to reduce the floor price for basmati exports to $950 per ton last month.
Following the decision in August, trade ground to a halt, but according to traders, the reduction in the floor price has revitalized the basmati rice trade.
“There’s been a great deal of interest in India’s new basmati rice crop and so far we have signed export contracts for around 500,000 tonnes,” said Prem Garg, president of the Indian Rice Exporters Federation.
“Normally we start getting orders for the new crop in September and October but the MEP of $1,200 a metric ton made it difficult for us to sign any deals,” he said.
According to two exporters, including Garg, Indian traders have finalized basmati export agreements ranging from $1,000 to $1,500 per metric ton.
Vijay Setia, a prominent exporter from Haryana, a major basmati rice-producing state in the north, noted that Turkey, Iraq, and Saudi Arabia have emerged as the primary purchasers of the rice this year.
“Despite the MEP of $950 a metric ton, it looks like we’ll be able to export our usual annual volume of around 4 million metric tons,” Garg said.
Hospitality unicorn Oyo’s plan to allocate INR 1,600 crore, approximately $195 million, for debt prepayment using existing cash and free cash flow is anticipated to bolster its Ebitda leverage and interest coverage metrics, as per Fitch Ratings.
On November 13, Oyo, operating under the name Oravel Stays Ltd., presented a buyback proposal of $195 million for its high-cost term loan of around $645 million, roughly equivalent to INR 5,350 crore. This plan involves seeking lenders’ approval to eliminate the covenant that requires maintaining $100 million in cash in a collateral account. Simultaneously, Oyo aims to amend the minimum liquidity covenant by introducing a revolving credit facility of $25 million.
The company plans to utilize the released funds, along with a portion of its current cash reserves and generated free cash, for a $195 million principal buyback. This move aims to decrease the outstanding term loan to $450 million, equivalent to approximately INR 3,730 crore.
Should the envisaged transaction be completed, Fitch anticipates a 30% reduction in Oyo’s debt and foresees annual interest cost savings of approximately $26 million.
“We believe that the potential transaction, along with sustained Ebitda growth, could improve Oyo’s Ebitda leverage to below five times, the threshold below which we may take positive rating action,” it said in a note on Tuesday.
Following the transaction, Oyo’s cash and equivalents could decline to around $80-90 million before rebounding to $100-120 million by the end of FY24.
“We expect the company to generate positive free cash flow of $20–40 million in the second half of FY24. We believe that such a cash balance provides adequate buffers to meet business needs at Oyo’s current scale and profitability levels,” Fitch said.
In May, the rating agency adjusted the outlook for Oravel from ‘stable’ to ‘positive.’
“The positive outlook continues to reflect that Oyo remains on track to generate positive Ebitda on a sustained basis and deliver significant growth in FY24, benefiting from the demand recovery in the travel and tourism industry and a reduction in its operating costs,” it said.
Fitch anticipates Oyo to achieve an EBITDA of approximately $100 million, equivalent to INR 830 crore, in FY24, whereas the company projects its EBITDA to surpass $110 million.
In August, it was reported that Oyo, set for an IPO, is targeting approximately INR 800 crore in adjusted EBITDA for FY24, based on a presentation by Chief Executive Officer Ritesh Agarwal.
Patanjali Foods Ltd, a prominent entity in the Indian retail industry, has experienced a noteworthy more-than-doubling of its net profit, reaching INR 254.53 crore in the second quarter of the current fiscal year. The company has strategically collaborated with former Indian cricket team captain M S Dhoni, designating him as the brand ambassador for its Mahakosh and Sunrich brands.
During the corresponding period last year, the net profit was at INR 112.28 crore. Although there was a decrease in total income to INR 7,845.79 crore in July-September, compared to INR 8,524.67 crore the previous year, Patanjali Foods effectively controlled its total expenses, reducing them from INR 8,371.03 crore to INR 7,510.71 crore.
In a statement, Patanjali Foods emphasized that M S Dhoni’s partnership resonates with the health-centric focus of the company’s edible oil products. The Food and FMCG segment played a substantial role, recording revenue of INR 2,487.62 crore in the second quarter, showcasing growth compared to previous fiscal periods.
Patanjali Foods’ CEO, Sanjeev Asthana, conveyed contentment with the favorable results in the initial half of the fiscal year. He underscored the company’s strategic realignment in business operations and the noteworthy expansion in profitability indicators. Despite facing a challenging macro and operating environment, the company accomplished export sales of INR 41.65 crore in the July-September quarter, dispatching products to 23 countries.
In a positive development for FMCG giant Dabur, two of its overseas subsidiaries, namely Dabur International and Dermoviva Skin Essentials, have been removed as defendants from multiple lawsuits filed in a US court. These lawsuits alleged that their hair-relaxer products were responsible for causing ovarian cancer, uterine cancer, and other associated health issues. Nonetheless, the lawsuits against the third international subsidiary, Namaste Laboratories LLC, are set to persist in the US District Court for the Northern District of Illinois, as indicated in a statement released by Dabur on Wednesday.
Dabur International and Dermoviva were granted relief and removed from multiple lawsuits due to a lack of jurisdiction. This decision was based on the fact that they have not engaged in the manufacturing, marketing, distribution, or sale of hair relaxer products in the United States, as stated.
Dabur India’s three international subsidiaries, Namaste Laboratories LLC, Dermoviva Skin Essentials Inc, and Dabur International Ltd, were confronted with around 5,400 cases across federal and state courts in the US. These cases were subsequently consolidated in the Northern District of Illinois, as disclosed by the company in a regulatory filing last month.
“We wish to inform that Dabur and Dermoviva have been dismissed as defendants in federal cases, which were consolidated as a Multi-District Litigation, before the US District Court for the Northern District of Illinois, for lack of personal jurisdiction as neither Dabur nor Dermoviva manufactured, marketed, distributed or sold hair relaxer products in the US,” said Dabur India on Wednesday.
Hence, now only Namaste remains as a defendant in these cases along with many other industry players such as L’Oreal, SoftSheen/Carson, Luster Products Inc, Avlon Industries, Inc. PDC Brands (Parfums de Coeur, Ltd), Revlon etc,” Dabur added.
The Homegrown FMCG and Ayurvedic products maker further stated that this lawsuit does not concern any Dabur brand or product and said the sale of hair relaxer products by Namaste contributed less than one per cent of the total consolidated turnover.
“We would like to reiterate that Namaste is confident in the safety of its products and believes that these lawsuits have no legal merits hence denies any liability and has retained counsel to defend it in these lawsuits as these allegations are based on unsubstantiated and incomplete study published in the journal of the National Institute of Health, which study has already been held to be redundant by the Cosmetic, Toiletry & Perfumery Association in the European Union,” said Dabur.
Moreover, Namaste has product liability insurance cover in place for any potential damages/claims and defence costs, it added.
Certain consumers using hair relaxer products had complained alleging that some industry players had sold products that contain certain chemicals. Using these hair relaxer products has caused ovarian cancer, uterine cancer and other health issues in the users,” Dabur had informed earlier.
According to the latest report, Dabur India has 27 subsidiary companies, which contributed to 26.60 per cent of the consolidated revenue from operations in FY 2022-23.
Its revenue from international business was at INR 2,867 crore, recording a growth of 11.1 per cent in constant currency terms in FY23.
Dabur India has manufacturing facilities at eight international locations, according to its latest annual report.
During the September quarter, local and regional companies have expanded their reach to 31% additional households in categories like biscuits, soap, washing powder, and detergent. This has led chief executives of major consumer goods companies to acknowledge the resurgence of smaller brands and recognize its influence on their sales growth.
In the most recent data provided by market research firm Kantar, local brands demonstrated a 4% increase in penetration for laundry bars and a 13% growth in washing powder, outpacing their larger counterparts who experienced growth rates ranging from 0-3%. In the soap category, smaller firms exhibited a notable 31% growth, while national brands only saw a modest 2% increase. Regional players in the biscuits category, the largest segment in packaged food, recorded a substantial 22% growth, surpassing the 10% growth observed in larger companies.
“On one side, you have got the larger players who are obviously much stronger brands, but they are losing out to the smaller players because of the price play and the grams in bags, etc. On the other side, you have got these guys who are throwing money in the market, so we don’t want to be caught in this logjam. Only if we find a way to balance and make money out of this, will we move forward,” Varun Berry, MD at Britannia, told investors. “Local players have very high margins, very high discounts, etc. So, only if we are able to counter all of those with the mix that we are bringing to the market will we move forward,” he added.
The disruptions caused by the pandemic, coupled with inflation in crucial raw materials, compelled numerous companies to either close down or streamline their operations. However, over the last two quarters, decreasing commodity prices have empowered smaller regional brands to broaden their operations and reduce product prices. Notably, Unilever announced last month its intention to lower product prices in certain categories, including soaps and laundry, in India. This move aims to transmit the advantages of reduced commodity prices, stimulate higher volumes, and enhance competitiveness against local entrants.
“A couple of our categories – fabric cleaning and skin cleansing – are very heavily correlated to the underlying commodity prices and (have seen) local competition re-enter the market. We have to simply adjust pricing there in order to maintain competitiveness and our volume position,” chief financial officer Graeme Pitkethly told analysts during the third-quarter earnings call.
Over the past few years, indigenous brands have been capturing market shares from prominent consumer product companies, particularly in categories such as soaps, detergents, hair oil, tea, and biscuits. For instance, the rusk market boasts approximately 2,500 local competitors, and more than 3,000 smaller or regional players command nearly 40% of the snacking segment.
“Local brands have sizable penetration across the key categories; and barring edible oil and tea, they have managed to either hold on to improve their penetration significantly, like in the case of salty snacks or biscuits,” said K. Ramakrishnan, managing director, South Asia, Worldpanel division, Kantar.
Nevertheless, Hindustan Unilever, India’s largest consumer products company, has acknowledged the comeback of small and regional brands, many of which had exited the market during the height of inflation.
Delhi Deli, a restaurant featuring a blend of Mexican, American, and European cuisines, has recently opened its doors in the vibrant locale of Greater Kailash 2, situated in the heart of India’s capital city.
The inviting ambiance of warm terracotta and red wine-hued walls establishes a cozy and hospitable atmosphere, providing a feeling of spaciousness within the intimate setting. For those desiring a dining experience with a view, the rooftop offers an ideal space. From this vantage point, you can relish a panoramic vista of the lively market in Greater Kailash 2, all while indulging in the charm of a pizza station.
When it comes to the menu, “Delhi Deli” presents a diverse range of dishes catering to every taste bud — spanning from salads and small plates to pasta, all-day breakfast options, sandwiches, burgers, and a curated selection of 20 pizzas.
Jayesh Singh, Founder of Delhi Deli, says, “It is not just about food; it’s a canvas where we blend flavours, cultures, and stories to create a masterpiece on every plate.”
In an era inundated with information and competition, emerging brands face a unique challenge: how to cut through the noise and establish a meaningful connection with their target audience. The digital landscape has democratized access to markets, allowing new players to enter the arena, but it has also intensified the competition for attention. In this fast-paced and crowded environment, effective communication becomes the key differentiator for emerging brands to not only survive but thrive.
Crafting a Compelling Narrative
At the heart of effective communication lies the power of storytelling. Emerging brands need to go beyond showcasing their products or services; they must tell a compelling narrative that resonates with their audience. This narrative should not only communicate what the brand offers but also articulate its values, mission, and vision. Consumers today are not just buying products; they are investing in experiences and aligning with brands that share their beliefs.
Take, for example, the success story of a boutique skincare brand that emerged in a market saturated with beauty products. Instead of merely highlighting the ingredients and benefits of their products, they focused on the journey of creating a line that championed sustainability and cruelty-free practices. Through a carefully crafted narrative, they conveyed not just the quality of their skincare but a commitment to environmental responsibility, earning the loyalty of a growing community of conscious consumers.
Choosing the Right Channels
The multitude of communication channels available today can be overwhelming, and emerging brands often make the mistake of trying to be everywhere at once. Instead of spreading themselves thin, successful brands carefully select channels that align with their target audience and brand personality.
For instance, a new tech startup might find more success in building a strong presence on platforms like LinkedIn and Twitter, where professionals and industry experts converge. On the other hand, a lifestyle brand might thrive on visually driven platforms like Instagram or Pinterest. It’s not about being present everywhere; it’s about being present where it matters most.
Engaging with Authenticity
Authenticity is the currency of trust in the business world. Emerging brands must strive to communicate authentically to build genuine connections with their audience. This means being transparent about their values, acknowledging mistakes, and actively engaging with their community.
Consider the case of a small coffee roastery that embraced authenticity as a core value. Through social media, they not only showcased the meticulous process of sourcing and roasting their beans but also shared the challenges they faced as a startup. By being open about their journey, they not only garnered support but also turned customers into brand ambassadors. Authenticity fosters a sense of relatability, transforming customers into loyal advocates.
Harnessing the Power of Visuals
In the age of short attention spans, visuals have become a powerful tool for effective communication. Whether through eye-catching graphics on social media or compelling imagery on a website, emerging brands need to prioritize the visual aspect of their communication strategy.
One striking example is a clothing brand that used visually stunning storytelling through its Instagram account. Instead of just showcasing products, they portrayed a lifestyle that resonated with their target audience. High-quality images, consistent aesthetics, and a well-thought-out visual identity became integral to their brand communication, elevating them above competitors and creating a strong brand recall.
Building a Community
Communication is not a one-way street; it’s a dialogue. Emerging brands can no longer afford to see their audience as mere consumers; they must view them as an integral part of their brand story. Building a community around a brand involves actively engaging with customers, listening to their feedback, and creating spaces for them to connect with each other.
A software startup exemplified this by establishing an online community where users could share their experiences, ask questions, and offer suggestions. This not only provided valuable insights for the brand but also created a sense of belonging among users. The community became a powerful asset, fostering a strong brand loyalty that transcended the functionality of the software itself.
Measuring and Adapting
In the dynamic world of business, effective communication is an evolving process. Emerging brands need to adopt a data-driven approach to measure the impact of their communication efforts continually. Analytics tools, social media metrics, and customer feedback should guide decision-making, allowing brands to adapt their strategies based on what resonates most with their audience.
An e-commerce startup, for example, used data analytics to track the performance of different marketing channels. By closely monitoring customer behavior, they identified the most effective channels for reaching their target audience and optimized their communication strategy accordingly. The ability to pivot based on real-time data ensures that emerging brands stay agile in the ever-changing business landscape.
Final Thoughts:
In a world where attention is a scarce resource, effective communication is the lifeline for emerging brands. Crafting a compelling narrative, choosing the right channels, engaging with authenticity, harnessing the power of visuals, building a community, and measuring and adapting are the pillars that support a successful communication strategy. By rising above the noise, emerging brands can not only capture the attention of their audience but also build lasting relationships that transform one-time customers into lifelong advocates. In the age of information overload, the ability to communicate effectively is the beacon that guides emerging brands towards sustainable success.
In the ever-evolving landscape of business, staying ahead of the competition requires a strategic blend of innovation and adaptability. In this digital age, where technology is a driving force, brands are leveraging cutting-edge tools to propel themselves to new levels of growth. From artificial intelligence to blockchain, the arsenal of tech tools available is vast and diverse, offering businesses unprecedented opportunities to unleash their full potential.
Artificial Intelligence: The Brainpower Behind Brand Evolution
Artificial Intelligence (AI) has emerged as a transformative force, reshaping the way businesses operate and interact with consumers. Brands are increasingly harnessing the power of AI to gain insights into customer behavior, personalize experiences, and streamline operations.
One striking example of AI in action is predictive analytics. By analyzing vast datasets, AI algorithms can forecast trends and customer preferences with remarkable accuracy. This foresight empowers brands to tailor their strategies, ensuring they stay ahead of market shifts and offer products or services that resonate with their target audience.
Chatbots represent another facet of AI revolutionizing customer interactions. These intelligent virtual assistants not only enhance customer service but also gather valuable data on user preferences and behavior. This information becomes a goldmine for brands looking to refine their offerings and optimize the customer journey.
Furthermore, machine learning algorithms are playing a pivotal role in marketing strategies. By analyzing past campaign performance and user engagement, these algorithms can automatically optimize future marketing efforts. This not only increases efficiency but also ensures that every marketing dollar is spent with precision, maximizing ROI.
Blockchain: Transforming Trust in the Digital Age
Blockchain technology, initially associated with cryptocurrencies, has transcended its origins to become a game-changer for businesses seeking to establish trust and transparency. The decentralized and tamper-resistant nature of blockchain makes it a powerful tool for enhancing security and traceability across various industries.
One of the areas where blockchain is making significant strides is in supply chain management. By recording every step of a product’s journey on an immutable ledger, brands can ensure the authenticity and integrity of their goods. This not only mitigates the risk of counterfeiting but also enables consumers to trace the origin of products, fostering a sense of trust and accountability.
Smart contracts, a feature enabled by blockchain, automate and enforce contractual agreements without the need for intermediaries. This not only reduces costs but also accelerates transaction processes, allowing businesses to operate more efficiently. For brands engaging in international trade, blockchain minimizes the complexities of cross-border transactions by providing a secure and transparent platform for financial exchanges.
Augmented Reality (AR) and Virtual Reality (VR): Immersive Experiences for Unforgettable Brands
The marriage of technology and experience has given rise to the immersive realms of Augmented Reality (AR) and Virtual Reality (VR). Brands are capitalizing on these technologies to create unforgettable experiences that resonate with consumers on a deeper level.
AR is redefining the retail landscape by enabling customers to visualize products in their real-world environment before making a purchase. This not only enhances the shopping experience but also reduces the likelihood of returns, as customers can make more informed decisions.
On the other hand, VR is transporting consumers to entirely new dimensions. From virtual showrooms to immersive storytelling, brands are leveraging VR to create captivating narratives that forge emotional connections with their audience. This technology is not limited to the retail sector; it’s also finding applications in industries such as real estate, education, and healthcare, revolutionizing the way businesses engage with their stakeholders.
Big Data: The Fuel for Informed Decision-Making
The sheer volume of data generated in the digital age can be overwhelming, but brands are turning this challenge into an opportunity through the strategic use of Big Data. By harnessing advanced analytics, businesses can extract valuable insights that drive informed decision-making and fuel strategic growth.
Customer data is at the forefront of this revolution. Brands are leveraging sophisticated analytics tools to gain a deep understanding of their customers’ preferences, behaviors, and pain points. This knowledge allows for hyper-personalized marketing strategies, ensuring that brands resonate with their target audience on a personal level.
Beyond customer insights, Big Data is instrumental in operational optimization. From supply chain management to resource allocation, businesses are using data-driven approaches to streamline processes and maximize efficiency. This not only reduces costs but also positions brands to adapt swiftly to changing market conditions.
Cybersecurity: Safeguarding the Foundations of Growth
As businesses increasingly rely on technology, the importance of cybersecurity cannot be overstated. A single cyberattack has the potential to cripple a brand’s reputation and erode consumer trust. Therefore, investing in robust cybersecurity measures is not just a necessity; it’s a strategic imperative.
From advanced encryption protocols to AI-powered threat detection, brands are implementing a multi-layered approach to safeguard their digital assets. Continuous monitoring and proactive response mechanisms ensure that potential threats are identified and neutralized before they can inflict damage.
Moreover, cybersecurity is not just a defensive strategy; it’s a key component of brand trust. Consumers are becoming more aware of the importance of data security, and brands that prioritize and communicate their commitment to cybersecurity are better positioned to earn and retain customer loyalty.
A Tech-Powered Future
In the fast-paced world of business, staying ahead requires more than just keeping up with the competition; it demands a proactive embrace of technological innovation. The tools mentioned above represent a mere snapshot of the vast technological landscape available to brands today. As we move into the future, the synergy between technology and business will only intensify, offering limitless possibilities for brands willing to unleash their potential and catapult themselves to new levels of growth.
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