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What to expect from India's burgeoning cafe culture?

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Sneha Medda
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From redesigning their menus to a mass national scale-up, the cafe chains are reimagining their entire strategy in India. Social Samosa understands how.

Young consumers are frequenting cafes in India and the competition is rising by the day. Currently valued at Rs 5,000 crore, the high-growth market of coffee retail business, as per research studies, is expected to reach $855 million by 2025.

From the early 2000s to the mid-2010s, the cafe culture was an experience reserved for dates and special occasions. Post-pandemic, the experience has shifted to a more casual setting. With a rise in freelancers in the country and international cultural influence, cafe culture is creating a strong grip over the country. Amidst this bustling cafe culture, a number of standalone cafes like Mumbai’s Step Cafe, Bangalore’s Dyu Art Cafe, Pune’s Leafy Trails Cade and more have popped up, creating competition for the big players in the industry. 

Unbridled Expansion

International players like Starbucks, who’ve had a strong hold over the market, have contributed to shaping the coffee culture and are rapidly expanding its presence in the country. This year itself the coffee brand has added 71 stores and recorded a revenue of Rs 1087 crore in the financial year 2023, up 71% from the previous financial year. In the span of 10 years, the brand has opened 343 stores throughout the country.



New kid on the block, Tim Hortons is eyeing to establish a strong presence in metros and open 120 stores in three years. The heated market has also piqued the interest of international players like Cinnabon and Carvel.

Not just established players, but homegrown brands like Blue Tokai have been on an expansion spree. They recently raised $30 million in funding and are planning on launching 200 new stores over the span of three years, adding to their 70+ cafes at present. 

Similarly, in the span of two years, Third Wave Coffee Roasters has expanded in six cities with more than 90 outlets across the nation. 

Cafes are scaling their presence through expansion and by catering to wider consumer sets through new price points. And the next three years paint a promising picture for this bubbling landscape. 

Catering To The Indian Palette 

With a large-scale expansion plan, the brands are also looking at ‘desi-fying’ their brands. Similar to Quick-service restaurants introducing local flavours to pizzas, burgers and more, cafes are bringing the best of the two worlds to attract consumers.

Earlier this year, Starbucks launched their very own version of ‘filter coffee’ with the tag ‘Ajji approved’ in the country. This attempt at revamping and Indianizing their menu was to lure more consumers in this competitive market.

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Deepa Krishnan

“People have become more appreciative of global as well as regional and local coffee blends,” said Deepa Krishnan, Director of Marketing, Category, Loyalty, Digital, Tata Starbucks.

She said that Starbucks was one of the first few brands to introduce Indian blends. “We are always looking to expand this portfolio,” added Krishnan. 

Along with introducing filter coffee, back in 2017, Starbucks launched Teavana, a branch that offered 'a modern and reimagined tea experience for Indian customers.’ The brand frequently keeps adding a variety of Indian flavours to their menu.

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Ravi Makwana

Similarly, Canadian chain Tim Hortons entered the market by listening to local needs. Ravi Makwana, Chief Marketing & Product Officer, Tim Hortons India said, “Indian audiences associate coffee with either extremely strong or something in between mild and sweet, and to match that Tim Hortons entered the market with two different roasts in India – a signature medium and a signature dark roast.” 

Along with coffee blends, Tim Hortons’ food range has also seen an Indian touch. For example, the brand has launched Chicken Tikka Croissant Sandwich. Makwana mentioned that this was done to build a familiar bond with the audience without losing the origins of the brand.

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Abhijeet Anand

Home-grown start-up AbCoffee has been working on making the speciality coffee landscape more affordable. The founder and CEO Abhijeet Anand spoke about the Indianisation of cafe culture in India.

“I believe people have now started understanding that what works in the West may not work in India because you have to actually complement what is actually needed here,” said Anand. 

Catering to the Indian palate is not limited to foreign brands alone. Homegrown brands like Blue Tokai have incorporated Indian blends in their menu as well. The brand’s menu runs far deeper than just offering a filter coffee and includes blends like Seethargundu Estate, Thogarihankal Estate and more, which caters to the taste of Southern parts of the country. 

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Namrata Asthana

Speaking on what has led to this shift in cafe culture, Namrata Asthana, Co-Founder and CMO, Blue Tokai Coffee Roasters said, “The Indian consumer is very curious about trying new things but there’s a limit, and for most customers, comfort food will always be something desi, and I think legacy brands are trying to strike that balance in their consumers.” 

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Rajat Agrawal

Rajat Agrawal, CEO Barista Coffee said "Customizing to the local palate supports growth as Indian taste buds have their own uniqueness."

Apart from exploring the taste buds of Indian consumers, cafe chains are also looking at lowering their prices in order to attract more customers and compete against homegrown brands. Just over a month ago, Starbucks introduced a six-ounce beverage named “Picco”, priced at Rs. 185, and milkshakes at Rs. 275, lowering their previously available range.

Otherwise known for their premium coffee range, with the recent range, Starbucks is attempting to appeal to larger consumer groups. 

Speaking about changes in consumer behaviour and cafe landscape, Krishnan said, “Coffee has now become a multi-dimensional experience. You actually go to a coffee shop for a date or a meeting with colleagues, to catch up with friends or family… The coffee landscape has now become far more robust. And the reason we have seen so many entries in the market is because the landscape is growing by more than 9%."

Brand Differentiation 

Young consumers who frequent cafes are looking for an experience. Cafes have been positioning themselves accordingly, trying to establish themselves as a friendly place where new ideas are born. 

When Starbucks came to India the brand had a ‘premium’ approach to them. With increasing competition and changing consumer behaviour, the brand has shifted their communication. Today, their communication revolves around consumers’ comfort.

As for Tim Hortons, the brand has used elaborate store openings as a way to establish a brand name for themselves in the nation. This also highlights how Tim Hortons’ cafe offers a holistic experience.

The Canadian brand leveraged its connection with North India and focused on the market to spread their presence in the country. Ravi Makwana stated, “There was a residual awareness about the brand that helped generate buzz for the brand. When the brand entered the market, Delhi and North were obvious choices, because they were better aware of the brand than the rest of the country.”

On one hand, where international brands are looking at scaling their brand throughout the nation by positioning themselves as cozy and friendly go-to cafes, AbCoffee is targeting price point as their main point of conversation. Their tagline ‘Specialty coffee at Honest Prices’ reflects this approach. 

“AbCoffee aims at being the neighbourhood coffee joint, just like ‘tea joints’ have been so far,” mentioned Abhijeet Anand. He further added by saying that the present cafe players in India are serving the top 0.5%-1% of coffee drinkers in the nation. 

AbCoffee is targetting the audience that doesn’t want to spend a lot on their daily fix of coffee, mentioned Anand. This communication is visible on their social media front as well, where they use humour and relatability to click with the consumer.

Social Media Playbook

To further communicate their positioning, the cafe industry uses social media, which allows them to build a direct connection with consumers through relatability. 

“With the growing Gen-Z and millennial population, exposure to the global attitude and experience, the coffee and cafe landscape has become more robust,” mentioned Deepa Krishnan. She further added that to reach this audience, the brand relies on digital platforms too. 

Krishnan mentions that the brand’s core value stays at offering comfort and consumer satisfaction. This message is visible on the social media side as well. 

The brand’s social media often communicates about the type of service the brand provides and highlights the feelings behind experiencing their coffee at their baristas.

Similarly, newbie AbCoffee’s social media play entails them celebrating their baristas and focusing on the holistic experience.

An old player in the game, Barista Coffee Company uses their social platforms to give a digital experience of their cafes in order to attract more customers.

As the traditionally tea-loving nation has made a swift shift towards coffee, more and more international brands have started to look at India to scale up their business. With the entry of popular international brands like iHop, Pret A Manger, The Coffee Club and more, the eyes are now on Tier II and III markets and the rivalry is only going to get heated in the coming years.

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