The Indian Coffee market

India continues to remain a tea loving nation. However, with the increase in the number of coffee outlets and the changing age profile of the population, the base of the consumers drinking coffee is expanding Nestle India and Hindustan Lever dominate sales of instant coffee, accounting for 95% of value sales in 2006. It is estimated that by December 2008, the country would have 1,135 organized cafes, growing at 63% per annum in terms of number of outlets. India has eight big cities, 53 towns with a one million population and 3,410 urban agglomerations of below one million populations. It has potential to accommodate 5,000 coffee retail outlets.

With a large base of young working population India will emerge as the fastest growing coffee market.

The Indian coffee Board has taken steps to boost coffee consumption by 50% by 2012. We are pushing the consumption to make it part of India’s consumer culture, thereby giving the beverage a lifestyle status says its chairman.

Table given below indicates the consumptions of coffee in India.

Calendar Year Quantity (in MT)

1991 55000
1992 55000
1993 55000
1994 55000
2000 60000
2001 64000
2002 68000
2003 70000
2004 75000
2005 80200

The key players in this market are Barista, café coffee day and Qwiky’s. Fast food retailers like McDonald’s who have for long offered milk shakes and ice creams have also started offering coffee.


Barista are the key players. Barista which means bartender in Italian is a chain of coffee shops established in the year 1999. Turner Morrison has a 60 per cent stake in Barista Coffee Company Ltd with Tata Coffee holding 34 per cent and the remaining six per cent being held by the employees. In March 2007, Italian coffee roaster Lavazza acquired Barista for Rs 430 crore from Chennai based Sterlite InfoTech Group. The company has 140 outlets across India and plans to add another 50 in the current year.

Barista also has three outlets in Sri Lanka and four in Dubai. International sales account for 10 per cent of the business at present.

Every Barista café aims to recreate an ambience and experience of the typical Italian neighborhood espresso bar in India. The interiors are bright trendy and comfortable. It also offers game like Pictionary and chess aimed at promoting an interactive social environment.

The coffee chain initially targeted the premium segment of the market with its high pricing however the company went in for a 15 to 30 per cent price reduction last April following which there had been a 47 per cent increase in footballs. The company claims that in December 2003, Barista experienced a 21 per cent per store increase in footballs over the pervious December with the number of footballs for the year totaling 14 million.

Barista has entered into alliances with premium hotels and has launched espresso bars at Taj properties across India. The company also plans to launch a new concept bar called Pavement Bar at the Taj poolside which would be a 24 hour coffee shop. Tie ups have also been done with Planet M and PVR cinemas. Promotional associations are also done with CNBC, Singapore Airlines and Evian.

Enthused by its growth over the past five years Barista aims to be the world’s number one in coffee chain within the next 10 years.

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