What key factors are driving India’s growing coffee culture, especially among young consumers?
Rajat Luthra: India is steadily embracing the coffee café culture, with increasing global exposure driving a greater appreciation for specialty coffee and the café experience. Coffee has evolved into a lifestyle choice, with rising interest in the origins, brewing methods, and unique flavours, fueling demand for specialty brews.
The Covid-19 pandemic, while challenging for the hospitality sector, benefited specialty coffee brands. Cafés became second spaces for those working flexibly and families seeking safe, relaxed environments. This trend has continued post-pandemic, with cafés now serving as social hubs frequented by diverse groups for casual meetups, business discussions, or personal time with a book or laptop.
How do you stand out in India’s competitive coffee market?
Ayush Bathwal: Our strategy for staying ahead of the game is an optimal blend of technology & customisation. We leverage technology to get to know our consumers better. Options such as ordering from the app or availing subscription packages for favourite orders, help us gain insights into consumer behaviours and continually feed this back into providing a more seamless coffee experience to them every day.
Likewise, we understand that flavour and taste preferences are not the same across the country, including coffee. We are invested in understanding our consumers and their nuanced preferences from various parts of the country. These learnings are reflected in our regional product offerings, designed specifically to cater to local preferences and tastes. In addition, adapting our cafe spaces to accommodate a local flavour in the decor is also our way of enhancing our consumers’ experience.
How many cafés do you have and what are the expansion plans?
Rajat Luthra: We are 114 cafes strong today, across various cities in India, with presence in cities as Bengaluru, Delhi-NCR, Mumbai and Hyderabad. We plan to open 50 new cafes by the end of this financial year, with a focus on entering new markets like Chennai. This strong growth is a testament to our commitment to bring high-quality, specialty coffee experiences to more people and communities in the country.
Why are creative cafés trending in metros, and is this the key to profitability and success?
Rajat Luthra: Modern Indian coffee consumers now see coffee as part of their lifestyle and personality, far beyond just a morning pick-me-up. They seek cafés with unique ambiences, comfortable spaces, and a focus on coffee quality and origin. These cafés have become ‘third spaces’—extensions of home and work—fostering a sense of community. Creatively designed, Instagram-worthy spaces are in demand for relaxation, work, and socialising.
While catering to this demand, we emphasise sustainable growth and building a strong financial foundation. Our store-level EBITDA is among the best in the industry, reflecting our successful product-market fit. The growing popularity of cafés and the strong numbers we’re seeing on the ground confirm that we’re on the right track.
What growth strategies beyond retail expansion will drive the next coffee trend?
Rajat Luthra: Since inception, our focus has been on creating an exceptional café experience, ensuring that newer consumers are recruited into the brand and their experience continues to be the best in the segment. While expanding our brand presence across the country continues, we also want to make a mark in the D2C segment. Ensuring a seamless coffee experience even outside the cafe is the next big thing to happen to the coffee sector.
What made you choose the coffee sector for your startup? Tell us your story and vision. Share your future growth plans for 2024 and beyond.
Ayush Bathwal: My fascination with coffee began during my time in the US, where I experienced the passion of baristas and roasters, from sourcing beans to refining flavours. This exposure to diverse, high-quality coffees inspired me to bring that experience back to India. Despite India producing some of the world’s finest beans, they were mostly exported, leaving local consumers with limited options. Our goal was to change that by offering high-quality, locally-sourced coffee and educating consumers about its origins.
Looking ahead, our mission is to ensure that every Indian, whether at home, at work, or in one of our cafés, enjoys a great cup of Third Wave Coffee. Over the next decade, we plan to expand nationwide, continuously innovating to enhance the coffee experience.
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