JAI GANESH RAMNATH, Managing Director and Country Head, Lavazza India, talks of building the coffee culture and increasing domestic consumption, as well as gearing up for the Lavazza Group’s recently announced ‘Roadmap to Zero’ plan to completely neutralise its carbon footprint by 2030
I STARTED WITH SELLING…
I started my career by selling computers door to door in Chennai in 1997, after joining the reseller for Wipro Acer computers. Then I joined Hindustan Unilever where I had a productive stint in sales and distribution for four years, before moving to Reliance for about seven years. I have been at Lavazza India for more than 12 years now.
I have always been an extrovert – talking, winning and convincing people came naturally to me. So sales is the backbone of whatever I have done. Something I treasure is the constant arguments to win over a particular distributor, to win over a particular customer – convincing, using your communication abilities to solve problems and distribution strategies on a day-to-day basis. I hold it close to my heart.
MY COFFEE REGIME
“I've been drinking coffee right from my childhood. I’ve always been around coffees, be it with my grandparents or my uncles and aunts. My day starts with a hot cup of filter coffee at 6 am. The second shot goes in after my breakfast. Then in office, I do 2-3 shots of espresso. I brew my coffees myself. Of late, I'm a big fan of cold brews. In all, I down 6-7 cups of coffee a day, if not more.”
GUIDED BY MY PRINCIPLES…
From my career of nearly 22 years, I have picked a few guiding principles, that I always carry with me wherever I go. The first is to ‘talk the truth’. It is very simple, but while most people don't actually tell a lie sometimes, they don't tell the truth either. That always confounds businesses. It takes companies into a very wide loop because people don’t tell them what's really happening. Telling the truth takes a lot of courage. It takes a lot of back-end work, integrity of thought, calling a spade a spade, but coming from sales, I say that you tell the truth and you don’t have to remember a thing. The second thing that I believe in right from my early days is to walk the talk. The biggest problem in today's world is trust deficit, because managers typically say something, they believe in something else, and they do something else altogether. Whether it was launching new products for Unilever in summer, or setting up fuel stations for Reliance or building businesses at Lavazza, I have taken a few hard business decisions in the spirit of ‘walk the talk’. If I say something to my team, I have to go out there and prove it that I can do it myself.
THE LAVAZZA LINEAGE…
Globally, 50% of Lavazza’s revenues comes from the retail business, i.e, FMCG. The rest comes from B2B. But in the Indian market, close to 95% of our business comes from B2B and only about 5% of our revenues come from retail. In India, it is a completely instant-coffee dominated market. Our 2020 revenues (January to December) were close to about 40% of revenues in 2019 - with all the hotels, restaurants, cafes, IT companies remaining closed. But the business smartly picked up from August 2020 onwards. By December 2020, we came close to 80% of our pre-pandemic revenues, and the next three months also went exceedingly well in terms of meeting our expectations. But now we are again in the midst of another lockdown. This could be cyclical until a permanent solution is found for the pandemic.
As a group, we believe in continuity, we believe in our systems and our processes. The Lavazza group has been around for close to 130 years, and been witness to the Spanish flu, World War I, World War II… it has weathered a lot of global disruptions over the past century. But the group is very clear about where it sees itself - a quality coffee provider, a total coffee solutions provider. So even when the lockdown happened, we invested a lot in training our team members and technology. We were one of the first players to introduce the contact-free dispensing system, or CFDS, that allows people to use an app to choose a coffee of their choice and get it without touching the machine at all. Once offices open fully, we hope to see proper uptake of these machines. We had a lot of outreach programmes like ‘Master your Brew Campaign’ to train consumers on how to properly appreciate and drink a cup of coffee better in their own homes. In the past few months, we have trained around 3000 corporate employees across 21 companies such as Swiggy, Flipkart, Marico, Practo, Myntra, Clovia, Samsung, Byju’s etc. The Indian market is still a very nascent one for coffee as a category, and therefore training our consumers and employees go a long way in creating a strong coffee culture here. That's what we will focus on in the next few months.
COFFEE, A SOCIAL LUBRICANT
India is on a strong wicket as far as increasing domestic consumption of coffee is concerned. So, the country is in safe hands, the coffee industry can expect a lot of growth from local consumers instead of relying on exports. I would call coffee a social lubricant because it is a newfound drink for the Indian millennial. When the offices, restaurants and cafes opened post lockdown, people actually went back to the beverage they were missing - coffee. There could be momentary dips, but as a drink, as a category, coffee is here to stay. Our recent ‘Productively Brewding’ survey on millennials really took us by surprise – it said close to 50% of all the millennial workers were missing their early morning coffee with colleagues during the lockdown. When millennials are binge-watching something online or working on an assignment, 70% of respondents said that coffee, and not an energy drink, gets them through an all-nighter. Another finding is that 45% of all respondents prefer cold coffee to a hot cuppa.
Last year, we saw huge growth in our e-commerce business, which means that a lot of people were missing their Lavazza coffee in their office or nearby restaurants, and were buying it online through one of the e-commerce platforms. Going forward, we'll have more of a systematic and sustained approach towards educating the retail consumers on freshly brewed coffee, teaching them how to brew a good cup of coffee in their own homes as we foresee a hybrid approach where people work a few days in the office, and other days at home. Globally, coffee is not a casual drink. It is a very serious drink. People really know what blend they want or what barista they like, what is their favourite coffee of origin. In the Indian market, education has to go a long way in seeing a shift from B2B to retail. The kind of market-share that Lavazza enjoys in star hotels and restaurants and cafes, I think we are here for the long term. We’ve got some exciting coffee products being launched in the B2B marketplace. We could be adding a two-pronged approach of growing the nascent retail category and growing the B2B category that already is well-established for our brand.
Thanks to the Indian Government and some local government initiatives, we have already moved towards paper cups that are completely compostable, completely biodegradable. Now we plan to convert the packing materials to sustainable laminates to reduce our carbon footprint. Gradually, we will go solar in our factories. The Indian arm of Lavazza is very well aligned to its global ‘Roadmap to Zero’ ambition.
‘I LOVE MURAL PAINTINGS’
“I love painting. I'm a student of mural paintings, that used to be practised on the temple walls in Kerala... I've also been into charcoal sketching right from my childhood. Otherwise, something that keeps me sane is music - a lot of old Hindi music, classical music apart from Tamil and Malayalam songs. I'm also a huge fan of nature – of wildlife, of peace and calm, of mountains, of hillsides, of beaches, of solitude… Whenever I go back to my home State Kerala, I take breaks by myself, to enjoy the solitude, be with nature, listen to some music and also do nice sketches. I’m fortunate that all my three passions actually go hand in hand.”