- Indian Coffee Market is expected to grow worth Rs. 4,540 crores by 2023.
- Cafe Coffee Day rules the Indian coffee market with 1530 outlets across the country
With Coca-Cola recently initiating talks with Cafe Coffee Day (CCD) for a significant stake in the coffee chain, let’s have a look at growing Indian Cafe Chai market.
Growing Indian Coffee Market
India is the world’s 10th fastest growing market for specialist coffee and tea retail chain valued at Rs. 2,570 crores in 2018, as reported by market researcher Euromonitor International.
Cafe Chain Market is one of the fastest growing categories in the consumer foodservice industry, estimated to grow 6.9% a year to Rs. 4,540 crores by 2023 in value sales at constant prices exclusive of inflation.
On the other hand, cola carbonated soft drink market on a much larger base is estimated to grow at 3 percent a year worth Rs. 12,845 crores.
Frequent visitors of cafes in India is the primary workforce which consists of people ranging from 18-35 years. This is the age group with disposable money and fast-paced lives. These specialized coffee chains attract young people, mostly in large cities, because apart from high-quality coffee they also offer Wi-Fi and great ambiance, said the report.
On the other side of the picture, the aerated beverage market is going to slow down due to people shifting for much healthier options. That is the reason beverage giants are planning to diversify their products. In one such move, Coca-Cola has initiated talks with Cafe Coffee Day.
Growth of Independent Chains
Cafe Coffee Day is the largest coffee retail chain in India. As of March 2015, the CCD group run 1530 outlets across 29 states of India. While, the closest competitor, Starbucks a 50:50 joint venture between coffee store chain Starbucks and Tata Global Beverages, has 115 stores across India.
Independent cafe chains and specialist coffee and tea cafes remained prominent in the market because of their consistent hunger for innovation and the flexibility towards trends. A lot of products, such as cold brew coffee, are displaying exceptional growth. Tea being the homely beverage in India is one of the most strong long term growth prospects,” the report said.
Why Coca-Cola is Planning to Invest in CCD?
Amulya Pandit senior research analyst at Euromonitor International said, “In the last few years, consumer preferences have shifted towards non-sugary healthier alternatives. PepsiCo gets more than 50% of its global revenue from foods, while Coca-Cola doesn’t have that leverage. Therefore, it is looking to diversify its business in non-alcoholic drinks categories other than carbonated drinks.
With people moving towards more healthier options as compared to aerated beverages, Coca-Cola plans to invest in the coffee market. With their acquisition of Costa Coffee in the global market, they plan a move to capture the growing Indian coffee market with their investment in CCD
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