From being just a beverage option, to becoming favourite morning drink, coffee in India has grown to new heights. Needless to say, the coffee sector in the country is growing at a significant rate with the market expected to grow annually by 7.2% CAGR in 2021 - 2025. In fact, in the last couple of years, we have seen huge transformations in the market where superior taste, quality, innovative brewing techniques along with unique flavours are drawing the business for coffee brands.
Today, Indians do not look at coffee as just a filter coffee or ‘Kaapi’ to go with their morning breakfast, coffee these days are more experiential, locally grown, sustainable and what not. From international brands like Starbucks, Costa Coffee and Di Bella to Indian home grown brands like Café Coffee Day, Coffee Culture, Araku Coffee to Blue Tokai and Rage Coffee, the sector has also seen a deep interest from investors.
Not just a trend!
While International coffee day is an occasion to celebrate and promote coffee as a beverage, it is also important to highlight the issues related to it. For example, fair trade and the plight of coffee growing communities. International coffee chain Starbucks that is also celebrating its 50th anniversary this week has taken a bold aspiration to be a resource positive company, to take less and give more to the planet in every aspect of its business – including coffee. In March, Starbucks announced coffee-specific environmental goals to achieve carbon neutral green coffee and conserve water usage in green coffee processing by 50 percent by 2030.
Starbucks purchases coffee from more than 400,000 farmers in 30 countries around the world and is committed to a sustainable future of coffee for all. The company believes it has a responsibility to care for the entire supply chain and the many people who make coffee possible, from seed to cup, farmer to customer.
Similarly, Costa Coffee has launched a trial of a new blockchain technology-powered reusable cup scheme called BURT. BURT – which stands for ‘Borrow, Use, Reuse, Take Back’ – builds on Costa Coffee’s work to improve the sustainability of its cups and packaging by utilising innovative digital technology, seeking to shift consumer behaviour towards reuse. The trial launches on 29th September across 14 stores in Glasgow, the home of COP26, and will last for six months.
Costa Coffee will be using the trial to gain feedback from customers and learn about uptake and behaviour towards reusable cups. It will then use its findings to optimise and develop a scheme that will roll out more widely across the UK in phases.
What’s happening in India
Not just cafes but India has also seen a rapid growth in coffee production and manufacture. Brands like Rage Coffee, Araku, Blue Tokai are doing a fab job when it comes to giving an exceptional product to the ever growing Indian customer. As per reports the ~INR7000cr Indian packaged coffee segment is dominated by incumbents with two players - Nestle and HUL (Nescafe &Bru) - controlling over 65% market share of the industry and this is a good time for homegrown brands to tap the market.
“Along with our constant effort to innovate and launch innovative new offerings and trend setting products, we are planning to expand our distribution network. It is also our vision to grow our revenues by 5x and reach over 3000 retailers by the end of 2021 and be a leader in building true omni-channel presence in our category,” shared Bharat Sethi of Rage Coffee in an interview that is targeting 16-35 years old who have already identified coffee as their go-to beverage.
On the other hand, Gurgaon-based coffee startup Blue Tokai Coffee Roasters that raised Rs 17 crore in pre-series B bridge round led by Anicut Angel Fund, is aiming to launch new products, execute farm-level interventions to improve quality, expand internationally and for marketing.
“Cafes were an important part of that mission, but like many brands, Covid-19 completely upended the economics of that business. We were fortunate to already have a strong D2C (direct-to-customer) presence and by refocusing our efforts on our online sales channels, we’ve been able to grow our revenue nearly 50 per cent more than our pre-Covid peak,” said Matt Chitharanjan, Co-founder, Blue Tokai Coffee Roasters that started selling its coffee online and through B2B partnerships.
Hence, we can say that there is much more that is brewing in coffee segment this year!