NEW DELHI: India is now the world’s 10th fastest growing market for specialist coffee and tea retail chains, valued at Rs 2,570 crore in 2018, says a report by market researcher Euromonitor International. The café chain market, led by Cafe Coffee Day and Tata Starbucks, is also one of the fastest growing categories in the consumer food service industry, estimated to grow 6.9% a year to Rs 4,540 crore by 2023 in value sales at constant prices exclusive of inflation. In comparison, the Rs 12,845-crore cola carbonated soft drinks market, though on a much larger base, is estimated to grow at 3% a year for the next five years, the report said. (See graphic.) “Specialist coffee shops appeal to young people, especially in large cities, as they not only offer high quality coffee, but also free Wi-Fi and a friendly environment,” the report said. “Consumers frequenting cafes in India are primarily 18-35 years old which comprises the country’s primary working force with higher disposable income and fast-paced lives.”
Euromonitor said the outlook for both independent and chained cafes and specialist coffee and tea shops remained strong on the back of constant innovation and wider offering. Some products, such as cold brew coffee, are displaying exceptional growth. “One area with strong long-term growth prospects is tea, which has traditionally mainly been consumed at home,” the report said. On the other hand, aerated beverage makers are looking to diversify their businesses as consumers world over increasingly opt for healthier options. “In the last few years, consumer preferences have shifted towards non-sugary healthier alternatives,” said Amulya Pandit, senior research analyst at Euromonitor International. “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.”
Courtesy : Economic Times