South India: Brewing hot

Cafes have become the hot place where youth from various small communities connect over a cup of coffee.

Café culture has grown by leaps and bounds in the last decade. The culture is undoubtedly catching up in the country like never before as increasing number of players are joining the bandwagon. South India in particular is booming with immense opportunities in the sector and offers a rich coffee culture to explore.

 

We can refer to students who are typically looking for a place to meet and socialise after school/college timings, or on holidays. On the same lines, we can consider office goers who are on look out for a place to grab a quick bite or a cup of coffee during breaks which also becomes a place of meetings. In the evening, the same spots can become a meeting place for relatives and friends.

 

Café culture trend in India

Given the huge disposable income for today's youth, there exists a vast market of cafes in India. Cafes have become the hot place where youth form various small communities connect over a cup of coffee. Sudeep Gupta, Director, Zest Agro Pvt. Ltd. comments, “In the time to come, Indian market will be at par with European market if we talk about the Cafe Culture. Though, this trend started from Barista, Costa Coffee and Cafe Coffee Day but in order to provide a branded cafe to a layman, chains like Cafe Buddy's are emerging to reach out to the larger audience. While, CCD and Barista cater to the up-market customers, a chain like Cafe Buddy’s takes care of the layman.”

 

Gaurav Narang, Director, Culture Cuisines India Pvt Ltd (Coffee Culture) avers, “Thanks to few brands for spreading it so well, that now, specialty café is nothing new to India, but I would still consider this market at a nascent stage as per capita consumption is still 600 gms compared to 6 kgs in US.” Zaid Siddika, Owner, Café Beanstalk, further adds, “We still do not have a street having multiple cafes next to each other, which is something seen in most countries.”  

 

More scope in South India

This definitely holds true since the Cafe culture very much started from the Southern part of India. Coffee culture began in the South on the back-bone of Udupi hotel coffees and coffees that were offered by many restaurants and Darshinis in the South. Harish Bijoor, CEO, Harish Bijoor Consults Inc shares that these were basic coffees and many of them were even bad coffees. But they served the populace well. Bijoor interestingly adds, “This back-bone set the pace for early coffee consumption in a country that had a pathetic per capita consumption of 54 gms per person per year in South India and all of 1.2gms per person per year in the rest of India.”
 

Entrepreneurs, too, have discovered that there is loads of money to be made in the quick service restaurant (QSR) business and especially having witnessed the rising share of wallet spent on eating out these days. Areas such as Indira Nagar, Richmond Road, Koramangala and HSR layout are seeing a sharp increase in the number of outlets (in South India) – selling cappuccino, frozen yoghurt, tea-based mocktails and English breakfast.

 

South India has got a lot of scope for players with better offerings. Now café is not just about specialty coffee – it’s about more offerings because more and more people have made café their second home – so better offerings, ambience would still have scope in South India. It’s more of a customised format game rather than a copy paste model due to diversification in our country every kilometer,” comments Narang.

 

Pankaj Upadhyay, Head - Business Development, Valiant Automations Pvt Ltd thinks differently and says, “This was true few years back but in today's scenario, coffee is not limited to south India but has become a national phenomenon. People of south are still very much inclined toward their filter Kapi but the youth all over India prefers the Italian coffees like espresso, cappuccino, latte etc.”

 

Clicking with customers

The basic things remain to be providing good food/cafe, good service and value for money. It must be remembered that cafes are not just places which serve coffees or food but also offer a hang out place with friends/relatives/colleagues and essentially looked upon as meeting places. “The way the quality and speed with which the service is executed is something which needs to be attended to in a personalised way. Also, new ideas need to be implemented to make your place more attractive,” opines Siddika.

 

“It’s all about the 4Ps – place, product, price, promotion. Cafes basically cater to all segments of crowd from morning till late evening so it makes it convenient for people to hop in at any time of the day and spend time,” adds Narang.

 “It is the informal ambience and the friendly attitude of people that works for a cafe and makes it very easy for people to hang out,” says Upadhyay.

 

Note for the coming times

Approximately, 1200 organised cafés are already operating in India – and there is still scope for 5000 more outlets to be positioned around shopping areas and business offices. There is huge potential in the market and there are lots of areas that are still untapped. Consumers are open to trying out new concepts, offering a lot of scope in the market.

 

Bijoor comments, “In the future, I visualise this to be a segment in a big way. We will have Cafes which are Jazz Cafes, Pop Cafes, and Trance Cafes. We will possibly have Cine-Cafes, Cafes catering exclusively to the interest of the same-sex orientation communities that have emerged in our cities and more.

 

“The young entrepreneurs should target a segment which is not yet explored – "On the Go". This is what greatly prevails in European (French Culture) and American cities,” shares Gupta. “More the players, healthier the competition, and more choice to the consumers,” avers Narang.

 

“Despite of the ‘already-existing’ brands and more coming in, there is still a huge gap as the market size is very big and has been unorganised till now. This sector is going to see a huge growth in coming five years due to this very fact,” concludes Upadhyay.

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