Wooing India’s Taste Buds

Cafe Chains Enchanting India!

Coffee was synonymous with the south Indian ‘davara kaapi’ till the early ’90s. Few were aware of anything more than the south Indian filter coffee or instant coffee, till the cafe revolution took it by storm, today the country has cultivated a taste for every kind of coffee be it cappuccino or espresso or a latte, thanks to the homegrown pioneers that ushered in the revolution – Barista and Cafe Coffee Day.

The Cafe Chains could not have chosen a better time to have launched the cafes in India. The opening up of the economy nurtured entrepreneurship; IT Industry had taken a firm root in the country propelling the economy forward, disposable incomes were increasing and the quintessential ‘INDIAN’ was ready to indulge. Taking root in the Silicon city of India, the Cafe culture has now gradually permeated into the staunchest tea-drinking population of the north and the growing economy of the country only contributed to boosting the cafe business.

It is believed that “the robust growth of coffee consumption at 6%, way over the global average has beckoned both the Indian and the international chains to invest and take a risk with India.” Today, the organized café market in India is at $ 300 million and is likely to reach $1.1 billion, with a phenomenal growth percentage rate of 20% according to a report by consultancy firm Technopak Advisors.

The Indian populace is not only cost-conscious but also quirky and widely different from their international counterparts. For Indians hanging out in a cafe is more a lifestyle statement and choice rather than a habit. Today, the Cafe business in India is studded with homegrown and international cafes chains alike each adopting a different approach, varied target group, and multi-layered positioning to capture the market share and have a larger share in the pie.

Home Grown Brands

Cafe Coffee Day– the cafe retail venture of the Amalgamated Coffee Bean Co. Ltd. is by far the leader in the pack. True to the byline of the cafe – ‘A lot can happen over a cup of coffee’, a lot has happened since the brand started its first cafe in 1996 on Brigade Road in Bangalore. CCD which could arguably be stated as the Cafe that brought in the ‘Coffee cup totting culture’ to India now has about 1500 cafes in the country in Square and Lounge formats and expansion is definitely the agenda for the cafe chain.

CCD leveraged the first-mover advantage and has steadily expanded occupying strategic prime locations across the country. The growth never phased down, it rather increased its expansion by seeking investments from PE firms KKR and Co. LP, New Silk Route Partners LLC, and Standard Chartered Private Equity in 2010 who now have acquired a combined stake of over 30%.

The strategy of backward integration in terms of owning large coffee plantations and a furniture company to cater to the cafes’ decor is another added advantage. Though the company has not made any statements, reports in the market state that the company is gearing itself for an IPO listing. Mr. Ankur Bisen, Vice President, Technopak Advisors opines that the idea of an IPO may have been long brewing within the company while the current bullish market may have prompted it into action.

It would be difficult to unseat this homegrown leader from its top position for it has made a clear head start with numbers and location and it has wedged itself in the Indian psyche as many a youngster grew up with the variety that CCD offered.

Barista Lavazza – India’s second-largest cafe chain in terms of numbers, Barista a pioneer in the sector failed to take advantage of its early entry into the sector. The company quickly changed hands with different management and operational strategy within the first decade since it started in 2000. Initially funded by Turner-Morrison under the leadership of Ravi Deol, it was taken over by Tata Group for a brief period until Mr. C Sivasankaran’s Sterling Infotech Group acquired the company. In 2007, Italy’s favorite coffee brand Lavazza acquired all the businesses of Barista to make an entry into India.

Since then Lavazza Barista has taken efforts to consolidate the business and grow it. Today the group has about 163 cafes along with a very profitable coffee vending machine business under the banner Fresh and Honest. However, reports in the market indicate that the group is looking at divesting its interest in the cafe business while retaining the Fresh and Honest Brand.

International Entrants

Costa Coffee – A UK based chain, entered India through the franchise model with Devyani International, a part of RJ Corporation. The first of the cafes were opened in 2005 and after a slow cautious expansion, the chain has in the past couple of years expanded rapidly and now has about 100 cafes in the country. Reports indicate that Costa may end its exclusive franchise model with Devyani International and explore other partners.

Tata Starbucks – One of the largest Cafe chains in the World, one that is known to have made the morning coffee drinking regimen a religion for many Americans established its first store in 2013 and has expanded to about 45 stores in a short span of time.

Though a little late, Starbucks is entering India with a formidable partner, it has tied up with Tata Group, the largest integrated coffee company with a 50:50 partnership. Like Cafe Coffee Day, this formidable combination with Tata brings in the advantage of backend integration with Tata-owned coffee plantation and real estate.

Starbucks is known for rapidly adjusting its strategy to suit the local tastes as it demonstrated in China. Though it has a large international menu consistent with its other chains across the world, it has tweaked its menu to include paneer and kebab items to entice Indian palate.

Coffee Bean and Tea Leaf – A large privately held coffee and tea cafe chain based out of California – Coffee Bean and Tea Leaf entered the Indian Market in 2008 with Pan India Solutions a leading player in the organised restaurant and retail business. Pan India is known to run other popular chains across the country including Bombay Blue, Gelato Italiano, and Copper Chimney.

The chain has over 25 cafe outlets and functions both as company-operated outlets as well as a franchise model. The philosophy of the chain is to offer high-quality coffee to the Indian population and is poised to expand its presence across the country with an addition of ___ cafes.

Gloria Jean’s – Functioning through a franchise model, Australia’s premium cafe chain which has a presence in over 37 countries opened its cafes in India in 2008 with the Indian Partner Citymax Hospitality of Landmark Group. While the cafe chain expanded to 30 outlets, today it has reduced it to 23 across the country. Mr. Pankaj K. Neeraj, Head of Operations says that the group is attempting to relook at its operational strategy to increase profitability and consolidate the business.

Dunkin Donuts – Considered a rival of the coffee behemoth Starbucks in the USA, with enviable coffee sales of its own, Dunkin Donuts entered India ahead of its competitor. It entered India through a Master Franchise arrangement with Jubilant Foodworks, the company responsible for bringing Domino’s Pizza to India. Unlike in the US, the Indian management is focusing more on food rather than coffee and is aiming to offer the affordable eating option for the consumers.

Other formats

Food generates the major chunk of the revenues, while coffee has a prominent place in the menu and acts as a supplement to food in this format of cafes. Consumers in such cafes look at coffee only as an accompaniment to food. International chains Subway, Krispy Kreme McDonald’s and Au Bon Pain operate within this format while still aiming at the same consumer base. To suit the Indian taste, filter coffee has been made a part of the Krispy Kreme Menu which is very popular among consumers” – Mr. Pankaj K. Neeraj, Head of Operations, Citymax Hospitality of Landmark Group

Java Green, a Reliance venture operates in a unique format. It is located in Reliance World catering to its broadband and cellular customers; however, the chain is slowly expanding as stand-alone locations outside Reliance World.


While the country and especially the youth population is ‘gung ho’ about the cafes sprouting across the country; the sector is not without challenges.

Indians still look at cafes as a place to hang out, unlike the west where ‘coffee on the go’ and must have morning ‘coffee fix’ is the trend. The premium ambiance and the time spent in the cafe become as important as the food and beverage offerings. It becomes that much more challenging for the cafe chains to offer a premium experience with high-quality coffee without consistent sales volume and profits.

Trained and skilled manpower is a key component of the cafe business. In India, Barista as a profession is still not actively pursued. Most of the cafe chains follow the format of hire and train recruits to suit the required skill sets or poach trained manpower from other chains. With the emergence of a large number of cafes, the demand for a skilled workforce has increased ten-fold. Cafe Coffee Day seems to have found a solution with an in house training facility to man its stores though it is plagued by high levels of attrition.

Strategic premium locations are vital to successful cafes that come at an exorbitant price buoyed by the shooting real estate rates and such catchment areas have the presence of similar cafe chains adding to the woes of cafe chains.

Despite the challenges, the sector is poised to grow at a healthy rate of 10%, with an addition of approximately 2000 cafe outlets within a span of 5 years according to a recent report by Technopak. There is an increase in the number of cafe chains from different countries desiring a share in the pie of the cafe business including Di Bella and Testa Rossa. Demonstrating that India today indeed has the space for more number of cafes as the Indian taste buds are asking for more!

Caffeine free Tea and coffee- the American way!


Angshuman Paul , Tea-entrepreneur & tea estate owner, Girish Chandra Tea Estate, A.C Paul Agricultural Company

Caffeine free tea






Caffeine free tea in India

You can bond with America in many ways (even obesity) but when it comes to a cup of tea or coffee, Americans are beckoned by the caffeine-free concept. In a couple of National Parks, caffeine-free coffee cafes are attracting huge audiences. It was a delight to be in the Wright Brothers National Memorial Park in North Carolina and I enjoyed my first cup of caffeine free coffee in a nearby cafe. These coffees are sold by highlighting the eco-friendly concept. For someone who belongs to the tea-fraternity and understands the entire production process in and out, I frowned on how tea can be without caffeine? The hilarious part was that my host in North Carolina – Pinaki Dutta, who by birth is Indian – claims that herbal tea is caffeine free tea.

Interestingly, “white coffee” is made from orange blossom water and uses less quantity of coffee (but still I couldn’t make out how it could be caffeine-free). My initial indulgence with this so-called caffeine-free white coffee was after my long journey from the Luray Cavern and amidst the enticing coffee aromas in the snack bar. The evening couldn’t have been planned better. Back to work in Washington D.C I missed my white coffee and was mesmerized in the meditation centre of hotel Hilton, which welcomes you with a nice cup of caffeine free tea. A blend of American and Indian – some premium caffeine free tea blends, Indian mediation, and American branding – caffeine-free! Sounds heavenly indeed!

Herbal Tea

But if I keep the debate of feasibility of caffeine-free tea & coffee aside, then certain caffeine-free hot drinks are overwhelming. Here are a few of my recommendations. Herbal Tea – made perfectly from hibiscus, mint, or chamomile – are a delightful indulgence. Then caffeine-free coffee – Rooibos – is available in all departmental stores (some of them even sell with a Made in India tag). If you are guessing what is Rooibos, it’s a naturally sweet, woody, tobacco-flavoured beverage, making it a good alternative to coffee. I was also delighted to experience Ginger Honey Lemon Tea Tonic (as it uses extracts from tea), offered in Bern’s & Noble book store and perfect for chilly rainy days, and particularly soothing for sore throats. While I personally cherished these varieties due to the novelty factor, the Americans seem quite hooked to the ‘caffeine-free’ concept. As they say – different strokes for different folks!