When Blue Tokai started as a small roastery in New Delhi in 2013, there were hardly any local coffee brands offering the brew beyond what coffee chains such as Barista, Café Coffee Day, Starbucks sold. or Costa Coffee. There is no doubt that these outlets were extremely popular, but part of the coffee-loving population wanted more than just a cup of latte or cappuccino. Enter Blue Tokai. By showing its customers where their coffee came from, roasting the beans with care, and making high-quality coffee more accessible, the company fascinated them and has since gained a loyal and growing fan base.
“We work closely with over 40 Indian coffee growers across the country. We started online and in 2015 we decided to open our first cafe as an experience center to give our customers a taste of the world of specialty coffee,” says Shivam Shahi, co-founder and COO of Blue Tokai Coffee Roasters. Until then, he says, Indian customers had never seen a specialty roast or cup of coffee being brewed and that added to Blue Tokai’s instant popularity.
Since then, there has been no turning back. Currently, Blue Tokai has three roasters and over 50 physical outlets. “Over the next 2-3 years, we plan to expand our offline presence to 120-150 cafes and expand into new cities. We are also ready to mark our presence offline in Japan and enter new markets in the years to come. With ready-to-drink and easy-to-brew offerings, we entered the FMCG segment in the second half of 2021 and in the coming months we will continue to grow this segment,” adds Shahi.
Blue Tokai was one of the first entrants to offer locally sourced and specialty coffee in India, a space which has now seen several other indigenous brands take off and find a strong consumer base, some even competing with chains. international. These brands are capitalizing on the popularity of the bean-to-cup movement and aim to deliver some of the finest, freshest beans straight from the estates.
According to a report titled, “India Coffee Market: Industry Analysis and Forecast (2021-2027) by Source, Type, Process, and Region” by market research firm Stellar Market Research, globally, the coffee market has grown steadily at 2.5-3% YoY, but the growth rate is much faster in India at 10.15% YoY. The report suggests consumption and popularity have increased during Covid, with cafes and hotels closing.
“We’ve seen the specialty coffee customer base grow over the years, which has allowed more players to experiment and grow. We believe there is room for everyone to grow and be different,” says Shahi of Blue Tokai. The brand’s post-lockdown offline recovery has nearly doubled in growth, with a growing number of customers ready to experiment. As a result, 21 new physical outlets were opened in FY22 to meet demand, bringing the company’s total number to over 50.
Similarly, social entrepreneur Manoj Kumar transformed GI-tagged coffee from the Araku Valley in Andhra Pradesh into a brand, Araku Coffee, in 2021. The valley’s iron-rich soil as well as its high climate altitude with warm days and cool nights makes the area ideal for cultivation. The growth of the coffee sector in India led them to choose the market for their first store, the company adds.
Fig at Malcha, a newly opened café in the nation’s capital, is another testament to the growing farm-to-cup coffee culture and brands taking advantage of it.
Manish Yadav, founder of Fig, shares: “We aspire to stimulate a sophisticated and social café culture in the capital. Every cup of coffee in Fig can be traced back to the farmer. Our goal is to brew exceptional coffee while supporting livelihoods, practicing sustainable agriculture and gaining recognition for the value of Indian coffees.
B2B coffee brands that also source coffee are thriving in the competitive market. Rahul Aggarwal, founder of Coffeeza, which caters to home coffee drinking, says that compared to FY20-21, they were up 130% in FY21-22. The brand also works with specialty coffee plantations in the country to source coffee beans.
While many start-ups that took off on the brink of the pandemic failed to catch on, coffee is apparently what kept everyone going. For example, Savorworks Roasters, a bean to bar and bean to cup concept cafe that started early this year has only grown in size.
“The pandemic has been a boon for us. In fact, we started at the start of the pandemic and delivering coffee door-to-door during the pandemic has helped us gain a loyal following. We are seeing great growth year on year as we double our revenue every year and have been a profitable business. We plan to open more outlets very soon in the near future and also expand our coffee and chocolate business through collaborations,” says Baninder Singh and Paweena Withyasathien, co-founders of Savorworks Roasters, who s supply coffee to Yercaud in Tamil Nadu and Chikmagalur in Karnataka. .
India’s famous filter coffee is also spreading, thanks to Bhava Coffee, which sources its coffee from farmers and the Baarbara estate in Chikmagalur. “We have observed that no matter how many different kinds of brewing methods, the demand for Indian filter coffee still exists. That is why, at Bhava Coffee, we have developed a blend that caters to different coffee tastes depending on the needs of a coffee lover,” explains Bharat Balakrishna, founder of the brand.
As for Roastery Coffee House, their brand has reached a wider consumer base during lockdown. Nishant Sinha, founder of Roastery Coffee House, which owns cafes in five Indian cities like Hyderabad, Kolkata, Noida, and is building more, says: “With cafes closed, customers had no choice but to make coffee at home. That’s when they read our coffees. We are selling at least three times more coffee than in the pre-pandemic period. Indian coffee is delicious, it has distinctive characteristics, but as Indians we are only beginning to embrace our coffee. We source India’s finest beans from farms in southern Chikmagalur, and even from the Koraput hills of Odisha. Sinha says they plan to make coffee available all over India, much like a good cup of tea.
Storm in a coffee cup
The booming coffee market in India has undoubtedly created a safe space for Indian brands to mainstream local coffee. But on the other hand, the question remains: does this make the cafe space in India competitive for international brands?
In August this year, Canadian multinational fast food chain Tim Hortons officially entered the Indian market with its first two locations at Gurugram and Saket. He made sure to incorporate Indian snacks into his menu. Tim Hortons India CEO Navin Gurnaney has reportedly said he plans to launch 120 stores in the first three years and 20 stores by August 2023. Another major Pret A Manger cafe has entered the Indian market with Reliance Brands (RBL) as strategic partner this year in July.
International coffee chains have existed in the country with major dominance and enjoy popularity. However, to cater to a changing audience, menus are localized to suit the Indian palette and new services are launched such as home coffee deliveries. However, as the nation that drinks tea smells of coffee, the business of international brands has also been good.
Tata Starbucks recently launched filter coffee, masala chai and cardamom chai in some cities like Bengaluru, Gurugram, Indore and Bhopal. From fresh sandwiches and vegan dishes, to salads and vegetarian and non-vegetarian protein boxes, the brand has introduced a range of new offerings.
Sushant Dash, CEO of Tata Starbucks, said: “We have done extremely well since the lockdown was lifted. In fact, we marked our strongest expansion in India in FY21-22 by opening over 50 stores. Dine-in, take-out and delivery have rebounded and grown significantly. Our delivery figures remained high even after the lockdown. Today, delivery is 13-14%, pre-covid, while it was 4-5% two years ago. We saw 76% revenue growth for 2021-2022 with a sale of 636 crore which was led by higher realization from existing stores and new stores we added during the financial year. Dash says this is a sign of increased potential and growth in the industry and a sign of a healthy and thriving market.
Rajat Agrawal, CEO of Barista, says, “Our recent launch of Chai Latte has been well received by our customers and gives them one more reason to engage with us. Agrawal adds that business has recovered at a rapid pace and tends to exceed our pre-covid sales. “Over the past two years, we have opened 85 new stores and strengthened our base with 326 outlets in operation to date. We are aiming for double digit growth as we reach peak seasons. The coffee chain market is growing at a healthy CAGR and the market is maturing. We have grown well over the past few years and see positive momentum going forward with a strong store pipeline,” he said.