India’s Latte Lift: How Coffee Chains Help Social Mobility

February 11, 2014, 10:00 AM

India’s Latte Lift: How Coffee Chains Help Social Mobility

By Shanoor Seervai

Upscale coffee shops and restaurants that have sprung up throughout India in recent years are providing a chance for youth from lower middle-income groups to become more socially mobile, according to a recent study.

Being a server has long been regarded as a job for the lower classes in India; meant predominantly for someone without an education. But work in coffee chains such as America’s Starbucks and U.K’s Costa Coffee, which have set up shop in India over the last decade, pays well, provides respectability, and chances for promotion. It is fast becoming the preserve of educated but less well-off young Indians.

Coffee baristas at international chains are expected to speak English and interact with their customers in a way that a chaiwala (tea-seller) does not,” says Michiel Baas, a Delhi-based anthropologist who studied 50 baristas at international coffee chain-stores in Indian cities. “It looks good on the resume, young people see it as a jumping board” to better positions in the hospitality industry, he adds.

Mr. Baas, a fellow with Nalanda University in the north Indian state of Bihar, observed and interviewed baristas in that state’s capital Patna, as well as Delhi, Mumbai and Bangalore. The unpublished study found that many of the workers aspired to improve their standard of living by eventually becoming floor managers at coffee shops, restaurants or luxury hotels, which pay several times more than places where their parents worked.

The starting salary for a barista at Starbucks in Mumbai, Delhi and Bangalore is around 12,000 rupees ($200) a month, says Mr. Baas. In comparison, a teacher at a private school in Mumbai is usually paid around 25,000 rupees a month to begin with.

For many young people, these jobs are a way to leave behind their small-town existence.

Dharmendra Kumar, a 26-year-old cafe manager at a Mumbai outlet of Indian chain Café Coffee Day, said as a child he dreamt of leaving his hometown of Shillong, in the north-eastern state of Meghalaya. “I wanted to see something else in my life, meet people from all around the world,” said Mr. Kumar.

After graduating from high school in Shillong, Mr. Kumar studied hotel management in Kolkata, and came to Mumbai in 2009 looking for work.

He got hired as a server at Café Coffee Day on a salary of 4,000 rupees a month.  Mr. Kumar rose rapidly through the ranks and now earns five times that much and hopes to be promoted to an area manager later this year, which would put him in charge of eight to 10 cafes.

Still, Mr. Baas found in his research that often parents don’t approve of their children working at coffee shops. They would prefer if their offspring joined the family business or chose a more traditional profession such as a doctor or engineer.

But that doesn’t seem to deter the Indian youth.

“Young people in India want the opportunity to do something differently,” said Mr. Baas. “The question, ‘Are you happy with your job?’ which used to be a very upper-class, Western concept, is becoming one for the middle classes in India,” he added.

Sheikh Abdul Tawab, 25, who works at a Mumbai outlet of the New York-based restaurant chain Le Pain Quotidien, says his parents wanted him to work at an office, but he loves his job on the restaurant floor.

Mr. Tawab holds a bachelor’s degree in commerce from Orissa, his home state in eastern India, where his father drives a private taxi. He moved to Mumbai in 2010 and found his first job out of college at a Kentucky Fried Chicken restaurant.

He joined Le Pain Quotidien as an assistant steward in 2012, and is now a trainee manager. Mr. Tawab says he likes the fact that in the restaurant industry people can become a manager very quickly.

“When I started, I saw my job as serving only the table I was given. Now, I see the whole restaurant as my table,” said Mr. Tawab. “My thinking has changed.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

One Response to India’s Latte Lift: How Coffee Chains Help Social Mobility

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: