Growing Cafe Culture in India

It is indeed a fact that India is primarily a tea drinking nation with low coffee consumption. According to the report published by NRAI, the per capita coffee consumption in India is 80 gm a year, whereas in developed countries it is 8kg a year. However, of late, the café culture has witnessed an aggressive expansion by established brands.

The size of the chain cafe market is estimated at INR 1520 crore (USD 290 million) in 2013 and is expected to grow at a CAGR of 20%, to reach INR 3,775 crore (USD 725 million) by 2018.

The forays by new brands and the cosmopolitan culture of the cities has led the foundation of international brands like Starbucks opening their outlets in the country. On the other hand National coffee chain, Café Coffee Day has its outlet in almost every city.

The spokesperson at Tata Starbucks says “The 50-50 joint venture between US café chain Starbucks Company and Tata Global Beverages will invest over time based on the demands of the business and the requirements of our customers to build a strong presence in the market.”

Café Coffee Day and Barista Lavazza have started the stage for coffee-drinking in India, marking their presence in the Core Café segment. The Café Coffee Day Lounge and Barista Crème also made a mark in the Core+Café segment.

Café’s are becoming popular hang-out destinations. At the same time, the evolving consumer lifestyles have given rise to other beverage-based outlets such as Tea lounges (Wagh bakri, Infinitea), Liquor café (Boombox café, Urban Café) Chocolate café’s (The Chocolate Room, Bliss chocolate lounge) and Juice/Smoothie Café’s (Booster Juice).

Market Players

According to report by NRAI, “Several national and international brands are making inroads into the café business. Currently, there are 100 chain café’s and bakery brands, with an estimated 3,100-3,200 outlets spread across various cities in India. With tough competition, players are trying to differentiate themselves by tailoring their offerings in terms of ambience, service and developing newer products such as regional flavours, international coffee blends, etc.”

Market leaders Café Coffee Day and Barista Lavazza have marked their presence across all formats, viz. lounge, café express and kiosk, while some others like Gloria Jean’s Coffees and Au Bon Pain have a distinguished presence in more than two formats. Costa Coffee is present only in the Café segment.

Mr. Pawan Raina, COO, Mocha, says “We are present in 13 cities across India and have 20 cafes all over. We are opening a new café in Guwahati this year and so far have opened 3 outlets already in this year. By March we will have at least 2-3 more locations under different stages of opening.”

He further adds “the reason for growing café cultures in the country is because it is aspirational, it is an experience to enjoy and savour or a meeting place to meet your colleagues or carry out a business meeting. This trend is present in Tier- II and III cities as well.”