Industry Spills The Beans On How Is India Turning Into A Coffee Loving Country
India's domestic coffee consumption has increased significantly in recent years. With a growing middle class and increasing awareness of coffee culture, more and more Indians are embracing the pleasures of a freshly brewed cup of joy.
As Indians lead increasingly busy lives, the convenience and accessibility of coffee has made it a popular choice for many. However, this increase in coffee consumption also presents challenges and opportunities for the coffee industry.
The rise in domestic coffee consumption in India reflects the country's evolving tastes and preferences, as well as the growing influence of global coffee trends. According to the statistics of the Indian Coffee Market report 2022, the Indian retail coffee business has increased by around 20 per cent in the last two years. The retail coffee market in India is growing rapidly. In 2021, the market was valued at around Rs 1700 crore, and it is expected to grow at a CAGR of over 20 per cent in the next few years. During the financial year 2022, India's coffee consumption totalled 1.21 million bags of 60 kilograms each.
The rise of coffee chains and specialty coffee shops across the country has contributed to this trend, offering a wider variety of coffee options and experiences to cater to different tastes and preferences. Moreover, the popularity of instant coffee has also played a role in fueling the growth of domestic consumption.
As the world celebrates International Coffee Day on 1 October, Indian industry players share their views with Businessworld on how India is turning into a coffee lovers country.
“The coffee category is pegged at Rs 3200 crore and is growing at about 10 per cent annual growth. As per volume, approximately 40 per cent of the total segment is made up by filter coffee volume and 60 per cent by instant coffee,” reveals Puneet Das, President, Packaged Beverages India & South Asia, Tata Consumer Products. Tata’s bouquet of coffee offers Tata Coffee Gold, Tata Coffee Grand Premium, Tata Quick Filter, Tata Coffee Cold Coffee decoction and Tata Coffee Café Specials premix.
Das says that in recent years, India witnessed a variety-seeking behaviour in India’s beverage preferences, with a number of Indians embracing coffee and its different formats.
“The café culture has gained immense popularity creating a strong social coffee-drinking experience. For at-home consumption, consumers across the country are looking for convenience and choose to experiment with coffee at home,” says Das.
Rajat Agrawal, Chief Executive Officer at Barista Coffee says that the Indian coffee revolution has just started, it was over the past few decades restricted to few, but that’s changing at a rapid pace. With 385 stores including Sri Lanka, Barista is one of India’s most favourite coffee destinations. “Tier 2 consumerism has evolved in the last 5-6 years, today the Tier 2 consumers are ready to pay a premium for branded products, further attractive real estate opportunity and better yields are enabling brands to consider Tier 1 & tier 2 cities as well on their growth agenda.”
Bharat Singhal, Founder Bili Hu Coffee contributes the trend and the awareness to social media as well. “Today, tier 2 cities are well aware of what is happening in metro towns. Given the exposure & reach through social media, brands are able to bring awareness to people from far ends of the country. Today the boundaries of lifestyles between metros and tier 2, are blurring,” says Singhal. He adds, “the availability of specialty coffee brands, dialogues on coffee brands, massive awareness just adds to this trend. Time will see a roaster in almost every neighbourhood.”
For coffee estate owners, the shift is fascinating. Mridhul Prakash, Managing Director at Vaishnavi Estate says that the domestic consumption of coffee in India in the last two financial years (FY 2021-22 and FY 2022-23) for 60 kg bags has increased from 1.21 million in fy 2021-22 to 1.24 million in FY 2022-23. This represents a growth of 2 per cent from the previous financial year. “India is rapidly evolving into a coffee-loving nation, and we are witnessing a significant shift in consumer preferences. Indians are increasingly choosing coffee over other beverages due to its rich flavour, versatility, and the unique experience it offers. This trend is not limited to metro cities; it's expanding to tier 2 cities as well. The coffee business is thriving in these regions, thanks to the growing awareness and appreciation for high-quality coffee. There is a growth in the inspirational needs of the population that is also helping the overall demand,” says Prakash.
For Cafes too, this trend is a welcome move. “In recent years, coffee in India has transcended its utilitarian origins, evolving into a powerful symbol of luxury and modern living. This transformation has been underscored by a notable enhancement in the quality of coffee offerings at local cafes and coffee shops, elevating it to a socially significant and cherished indulgence," Sandeep Nagaiah, Co-founder of Paper & Pie Cafe Bengaluru. Vamsi Reddy, Co-founder of Paper & Pie adds, “The dynamic growth of specialty coffee, the emergence of fast-casual dining venues, and the increasing popularity of communal workspaces have collectively propelled the coffee industry to new heights. What's particularly exciting is that this trend isn't confined to the bustling metropolises alone; it has gracefully spread its wings to tier 2 cities, where coffee culture is flourishing. Today, coffee stands as an integral facet of our daily routines, embodying both comfort and sophistication."
Sahil Taneja and Swati Upadhyay, husband and wife duo behind Concu cafe chain Bengaluru say that over the past two years, the retail coffee business in India has experienced substantial growth. “Notably, cities like Bangalore have witnessed a surge in coffee shops, both multi-chain establishments and artisanal cafes. In Bangalore alone, there are now over 300 coffee shops, reflecting the expanding landscape of the coffee industry,” they share.
Parth Gupta, Founder and Head Chef at Bloom Cafe Delhi says, “This growth has also promoted competitions and fairs for baristas, motivating both homebrewers and professionals to further grow their coffee knowledge and skills. As a result, coffee education and awareness are on the rise, expanding the coffee market in India. The collective efforts of emerging coffee brands, roasters, and cafes are pivotal in shaping this transformation, as they play a crucial role in educating the populace and fostering a thriving coffee culture in the country.”
Anurag Bhamidipaty of Ahmedabad-based Roastea too shares similar sentiments. "The rise of coffee shops in malls and urban areas has played a pivotal role in driving up coffee consumption. Several factors contribute to this shift, including the perceived health benefits of coffee, the influence of Western culture, and the demands of our modern, fast-paced lifestyles, where coffee provides the energy boost we need," says Bhamidipaty.
He further adds, "What's great is that this coffee trend isn't just in big cities. Even smaller towns, (Tier 2) cities, are getting into it. Coffee shops are spreading, making it easy for more people to enjoy coffee. It's like a mix of our old morning tea tradition with new and exciting coffee flavors. India's coffee business is booming, keeping our traditions alive while adding new and delicious options for everyone."
