Aim To Have 55,000 Total Stores In Next 5 Year: Starbucks Global CEO Laxman Narasimhan | CNBC TV18

Oh, it is actually. Thank you for coming here. Thank you for coming to my hometown. Thank you for coming to my home store. The Koregaon Park store is about 500 meters from where my mother taught as a primary school teacher, and it's less than a kilometer from where I grew up. And so I've walked the streets so many times. You know, it's pretty much nobody, and then you come here, and you know, it's amazing to see my hometown, my hometown partners meet hometown customers. And I'm so glad you are able to come to our store.

Well, thank you, thank you for saying that. I mean, I actually earned my green apron. You know, when I started training... No, they didn't. They actually made it work. You know, so I had a trainer, she was pretty tough. She would say, 'Hey, there's too much foam in that latte, go make it again.' I got a bit of feedback today too, by the way, as you probably saw. But it's actually really good to know exactly how we do our things. So for six months, I trained. I trained all the various aspects of the coffee business. I got a green apron, which is the first step, and two weeks ago I got a black apron because I've been working on knowledge all the way through. I've been working in stores half a day a month because 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 in the front line.

Well, the first thing you've got to appreciate and acknowledge is the fact that Howard is iconic, the fact that he's a tremendous entrepreneur, and he's redefined the way the world drinks coffee. And you've got to pay respect to it. Coming of Asian origin, that's actually easy to do. You know, when I was first interviewed about this immersion program, and a journalist asked me, 'You know, how could you agree to a six-month immersion?' I looked at her and I said, 'You know, it's really interesting. The way you heard that question is, how could you do this immersion program for six months, or why was this immersion six months long?' I said, 'If you were Asian, you might have asked the question differently. You would have said, why was this immersion program only six months long?' There's one simple word that changes, in fact, the perspective that you have around why you do this. I learned a lot from Howard, but you also appreciate that I'm different. And if you start looking at the complementary skills that I bring, that's what I'm going to bring to the brand. I deeply appreciate the brand. I know what it stands for, and it stands for human connection. It stands for ensuring that people have a place where they can belong, where they can bring joy, where the craft of coffee gives customers the results that they want, and we have the courage to keep innovating in the business. Those are our fundamental values. So as we were doing this, Howard and I had a long conversation about the company and said, 'You know what, we've built this company, it's now 51 years old. We think the headroom for this company is really quite large. It's time for us to refound this company.' And that's what my leadership team and I have done over the last year. We've refounded the company. You go back to the mission of the company. The mission of the company that Howard had was a mission of, you know, 'Inspire and nurture the human spirit, one cup, one person, one neighborhood at a time.' Tremendous mission, but it was written before the iPhone. And as you look at what's going on with the way customers are evolving, my leadership team and I, we worked with thousands of partners around the world, and we wanted to do something that gave the power of this cup to the barista, because really, that's where it happens. And so our mission celebrates the past and evolves the company to the future. And it is this: 'With every cup, with every conversation, with every community, we nurture the limitless possibilities of human connection.' So the barista, when they hand the cup, they're having a conversation with you, either physically or we do it digitally. The community is beyond just the neighborhood. What we're doing is we're essentially uncovering what the limitless possibilities of us connecting with each other. So the mission itself is different.

So first of all, you know, as I said, this is an iconic brand, and it's a brand that is founded on this idea of human connection. It is a brand that is founded on this idea that even in a polarized world, you have the ability to create a third place, a place where people can come and feel belonging, feel joy, and essentially advance the conversation forward. You know, with the ability to converse, to connect. And so that is at the heart of what this company is. So given that that company is there, and given this is a business founded on kindness and joy, it's an iconic brand that needs to be celebrated. So we're not a political organization. You know, we don't fund governments. We strongly are opposed to hate speech. You know, we completely decry the weaponized speech that exists in many places. And there's all kinds of rumors of who we are and what we're about, but the fact is that we strongly reject violence against the innocent. What we are about is we are about pro-belonging, pro-joy, pro-kindness. That's what this brand is about. So given that's what the brand is about, and we look at the world, you know, I worked in stores around the world. I could see society through the windows of our stores. And it's interesting, when you go to the US and you see a more polarized society, you come to Europe and you see a highly more multicultural customer base as well as partner base. I go to Japan and I see older customers coming in with their even older parents in the afternoon to share coffee. You go to China and you see this amazing ambition that the youth have. We as a brand play a real role, a role of providing that world's third place. To that end, we said the triple-shot and reinvention was about: first, it's about elevating the brand, get the brand to be even better. The second is about us strengthening and scaling digital. We are a very digital business, and we have the potential to make it even bigger, what we do, how we connect with our customers, but also how we reimagine the factory in the back while delivering the theater in the front, the theater that we saw. The third thing we have is truly global, and this is where India comes in too. You know, we have a big leg in the US, we've of course grown several stores in China, but the rest of the world has huge potential for us. Even in markets like Western Europe, we have headroom. You look at markets like India, which are just getting started. So we will be truly global. Three out of four stores that we build over the next five years will be outside the US. Those three things are really important. And to that context, you know, we need to obviously fund this, so efficiency helps us do it. It helps us build the capabilities that really reinforce this business. And the last thing, and perhaps the most important thing for me, is you know, we have 460,000 partners around the world. These are partners hired locally, they're hired by the local geographic partners that we have here. We have an amazing joint venture with Tata's. These are people from the community that we're working with. But how we ensure that we, through the power of storytelling, through the power of amplifying what's really important, we reinvigorate our partner culture worldwide. It's amazing, you know, we don't really have a system of transporting and transposing our culture, but you go to Mexico or you go to Holland or you go to Japan or you come to India, it actually feels very similar. So that's what triple-shot reinvention is. And you know what it does is it gives us comp growth of 5% in the long term, double-digit revenue growth, and earnings growth in the 15-plus percent range. All that put together helps us create a financial result, but in so doing, we meet the needs of all the stakeholders we have: partners, customers, the farmers and coffee, the community as well.

Well, first of all, I'm really excited by India and what is happening here. You and I just discussed this earlier. I've come to Pune and it looks so different. We see the investments being made in infrastructure. We see the consumer getting great strength. The country is poised for takeoff. And our business has been built very systematically over the course of the last 10 years with a base of partners who are extremely strong and a partner like the Tata's where the values are entirely consistent. Chandra and I have known each other for years, and you know, it's a very similar orientation to India, the potential of India, and where we could go. What we announced is the fact that we're going to be opening, if you look at last year, we opened one store every five days. We're now moving to one store every three days. And we have a wonderful team leading the business, and I'm deeply supportive and appreciative of all that they do. And when they told me one store in three days, I said, 'That's amazing, well done. What are we now doing for the other two days?' And I think what this tells you a little bit is the ambition for India. So what are you going to be doing for the other two days? The team is on it. The team is working obviously on things to do. But you know what I appreciate very much is beverage and coffee score, and I love the coffee culture that we're building. You know, food attach is a business that we have, and we have a range of food products that attach to the beverages that we have that are terrific and well done. We're working on things that are accessible, the Pico price point, the filter coffee that you drank. And so all that's just for India. But in addition to that, what may not be entirely visible to you is the work we're doing behind the scenes. You know, in Coorg, the Tata's and us have a joint venture. We work very much on farming and how we improve the quality of the coffee crop. We have a joint venture with Tata Coffee and roasting here in India. It's very important to build the back end and to build the back end really, really well. And my hope and ambition is that we fundamentally scale up even further the coffee we source from India. So if you look at the new launch we're going to have this year, early this year here in India, it's going to be the Starbucks Reserve Monsooned Malabar. That's a tremendous blend. I drank it actually the other day. This is going to be in all US stores in the middle of the year. So we're going to take India, what we make here, what we produce here, and also have it show up around the world. And it's a way of taking India to the world as well.

I think to me, what you could expect is that as we continue to work together, Tata's and us, on coffee, the quality of coffee from the farming, we bring in the techniques that we have mastered by working with half a million farmers with whom we buy. You know, we provide information to another million and a half. There are two million farmers off the 20 million worldwide who actually get information practices from us. We're bringing in a whole set of practices as well here, including what we call C.A.F.E. Practices, which ensure the future of coffee for all in the chain. And so we bring that in here. The idea very much is, say, how do you make India even bigger for us? And clearly, India is a tea-drinking culture too. So there's things we do with tea around the world. So I'm really hopeful that what we can do is fundamentally change the equation about how we take India to the world through Starbucks.

We have a very long-term view to investment and returns. And what we know we're doing is we're creating a third leg of the stool in our global markets. As far as India is particularly concerned, the team knows that the brand and how we deliver the brand is really very important. The values are super critical for us. And with that, the team is essentially working on a plan, you know, continuing to build the plan we already have to ensure that we get the kind of returns in the long term that we would get. But you know, with opportunities, we will invest, and you can expect in India that we will invest.

Well, China's 10 or less, 10% of the overall, you know, revenues for us globally. The US is obviously a large size of it. But we actually have a lot of other markets. We're in 86 countries. You could recognize the potential of the headroom we have in all of them as we build out this third leg of the stool. 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.