Coffee, wine or me

Remember the old book series "Coffee Tea or Me" - well readers of this blog are probably too young to remember it. Maybe now its time for Coffee, Wine or me !

Why does a coffee chain want to serve alcohol ? Starbucks wants to try out having wine and beer on its menu in a few outlets in Seattle and Portland. At first sight it seems an odd combination. Why would Starbucks want to do that ??

The problem, as always, is growth. Starbucks hit a rough patch, if you remember, in 2008 which prompted the founder Howard Schultz to retake the reins as CEO. Currently it is doing well. Revenues in 2011 grew 9.3%. But how do you keep on growing the revenues. After all, how much more coffee can you stimulate your patrons to have. You  can push the "eats", but that's a limited range. They are trying to enhance that with an offering of " premium foods" - whatever that means. And now alcohol.

But is Starbucks a bar ? No serious drinker will go to Starbucks for a pint or two. So the only opportunity is to attract a a mixed group of whom some want a cup of coffee and some want a glass of wine. How much is that opportunity ? Can't be really a growth driver. And what would happen to the brand - Starbucks is synonymous with coffee now. You want to dilute that ?

Of course the company is no fool. Its dotted with marketing types spewing Kotlerspeak. The trouble is that marketing types are often wrong. For the moment, Starbucks is only testing. If the test bombs - they'll quietly bury the idea.

An obvious avenue for growth is geography. Expand overseas - Starbucks is pretty much ubiquitous in America. Go abroad. Especially to magnetic China. They have actually started to become quite widespread in Chinese cities. China is a tea drinking country, but there are enough youngsters willing to swill coffee. Especially an American brand which carries a halo in that country. But the problem is that the Starbucks formula in the US is a disaster in China - free wifi, stay as long as you want ..... That's taken literally in China and giggling girls , four of whom sharing a cup, sit there all day. I hated going to a Starbucks outlet in China simply because I could never find a seat as "long term residents" had made themselves comfortable everywhere. Instead when I wanted a coffee I went to McDonald's where the coffee was superb , they served it within 20 seconds, and I could find a place to rest my bum - all at half the price of Starbucks. Screw the ambiance - the taste of great coffee drowned everything else. Global formulas don't always work.

So Coffee Wine or me ? I would stay with the coffee, thank you.

Shampoo for lunch

It must have happened to you too. Standing in a long checkout line in an Indian "supermarket". Rajalakshmi , in front of you, has 742 items to bill. You wait patiently (as if you can do anything else). The bloke behind you is poking at your spine as he wills you to advance. Rajalakshmi is intently watching the  amount totalling up on the display. It now stands at Rs 3742.50. After 18.5 minutes when all the 742 items have been billed (and not one second before), she digs into her purse and comes out with three fat wads of Sodexho coupons. All in denominations of Rs 5. And then proceeds to count them out laboriously. Being mathematically challenged, each time, she comes up with a different answer. 14 minutes later she discovers that she is Rs 5 short in coupons. She then proceeds to dig in to packed bags, go to the bottom, remove an item and ask the checkout guy to deduct that from the bill. She is now Rs 7 excess. She wants change back. He refuses ........You can do precious little but curse at the injustice in the world.

Forget Foreign Direct Investment. The biggest change required in Indian retail is the banning of Sodexho coupons. I don't mind Walmart not being there. I just want Sodexho to disappear.

For those unfamiliar with the Sodexho problem in India, this is a by product of feeding the thousands of coders who throng Indian cities. The office canteen providing free meals was always a part of the corporate landscape. But when the IT lot descended on the scene, they brought with them the Sodexho coupon. Each employee is given a thick wad of these blasted coupons. She's supposed to exchange them when buying lunch . Of course she does no such thing -she either starves, or has a banana or brings a tiffin box. Saves these coupons which then can be used to buy grocery in shops.

This is tax evasion on a grand scale by the relatively well to do. Food coupons are tax exempt with the ostensibly laudable objective of feeding Rajalakshmis. They are meant to be used to buy food when in office. Not to buy toilet paper for home. By Indian standards, coders are well paid. Their effective rate of taxation is usually low at 10 or 20%. This is blatant tax evasion which everybody indulges in. Before throwing mud at politicians, one should ensure that one's own shirt is white.

The problem has grown into an epidemic. Apparently there are 300,000 people using Sodexho coupons like this. Nobody knows the value , but the speculation is some Rs 3000 crores. This is parallel currency sloshing around along with the rupee. I have sometimes been offered these coupons as change. The look I give the retailer who suggests this, gives meaning to the term kolaveri !

Pre budget consultations are currently going on in India. Here's a free suggestion to the Hon'ble Pranab Mukherjee. Remove the tax exemption on Sodexho coupons. And just watch them disappearing at lightning speed. I shall cheer mightily if Dada would do that.

Can we win ?

Down and out is one of the worst moments in life. It comes to everybody at some time or the other, save for the blessed few that God has chosen to spare. It comes to businesses, it comes to sports teams, it comes to people, it comes to you and me. The Indian cricket team is in that situation now. British Petroleum and Lehman Brothers faced it not so long ago. To many in Greece or Portugal, it might be that way at this moment. It all appears bleak. There is much darkness and little light. Even the air seems suffocating. The world seems to be an approximation of Hell.

This is the moment when strength of character shows out and is sorely needed. The strength to struggle and stand up despite the ferocious battering. Perhaps with a few more ingredients that might help enlarge the glimmer of light, such as it is.

Hope , of course. If you look at it,  Pandora did humanity a service, releasing all the evils, but also releasing Hope. For an utopian world with no evil, but also no hope, does not seem to be an attractive version of Paradise.

Perhaps something to lean on. A friend perhaps. Or a family. Or one's faith. Just to provide an anchor. A support, as strength is gathered for the long climb out of the hole.

Steely determination surely. The past is past. Tomorrow is another day. The Phoenix can rise from the ashes.

Action for sure. Moping is natural, but action is better. Not the plodding along as of old, but bold new action. Decisiveness, discipline, and energy. Small milestones that get larger and larger. 250 next time. 300 thereafter. Each one achieved with no quarters asked or given. Easily said; tougher to do of course.

Belief. That's a difficult one when in the bottom of the hole. Especially as everybody peering from the top is nodding their head at the futility of it all. But the spark should not be allowed to die out. It is what will light the fire along the way.

And above all some compassion as the climb is begun. For some unfortunate soul further down and struggling, a helping hand perhaps.

Why this touchy, feely, vague post in an ostensibly hard headed business blog ?? Don't ask. To quote William Cowper - Variety's  the very spice of life, That gives it all its flavour".

So the response to the rhetorical question at the title of this post. Of course, yes we can. Even if the voice is squeaky and barely audible, the throat with a lump and perhaps a tear shining at the corner of the eye.