Brewing Freshness: What's pushing the growth of Artisanal Coffee Chains in India

With over half a billion people, India is the second-most populous country globally and has a rapidly growing economy. The country’s coffee culture is also on the rise, with more and more people enjoying cups of joy daily. The growing popularity of premium coffee is one of the main drivers of market growth, as consumers are increasingly willing to pay for higher-quality beans and better brewing methods.

Coffee consumption in India is expected to grow at a compound annual rate of 5.5 percent between 2018 and 2022, according to Euromonitor International. Factor driving the market growth is the rise of speciality coffee shops in India. These establishments are often frequented by young, urban consumers who are willing to spend more on their coffee than the average consumer.

What is speciality coffee?

Speciality coffee, to put it simply, is brewed coffee of the highest quality that is sourced directly from farms and comes in a variety of flavours. They are handled differently from conventional coffees, starting with the level of harvesting and continuing through processing and storage.

It is well known that India is one of the world's greatest producers and exporters of coffee, ranking as the sixth-largest producer and fifth-largest exporter, with domestic output accounting for about 3.14 percent (2019–2020) of global coffee production. However, only 30 percent of the total coffee produced in India is consumed domestically, with the remaining 70 percent being exported. While India has been exporting high-quality coffee for many years, artisanal coffee is quickly becoming more popular domestically as well.

Single-origin coffees, which are obtained from a single region and aren't mixed with others, are one of the preferred choices as many coffee firms place a strong emphasis on the quality of their products. Lavazza, an Italian company, introduced its single-origin coffee pods, while Sleepy Owl, an Indian company, is experimenting with special offers that don't require various brewing equipment.

Moving ahead instant coffee

To put it in a nutshell, till date, many coffee enthusiasts are majorly dependent on instant coffee brands like Nescafe and Bru for a hot cuppa. But the cult of moving towards speciality coffee is being witnessed. 

“The speciality coffee movement will take some time to reach its potential. In India currently, the eco-system to produce high-quality coffee is not accessible to small farms and coffee estates. While customers do express the need for finer coffee, speciality coffee will be limited to a few cafes in the near foreseeable future,” Sureena Dalal, the brand manager at FIG in Delhi stated. 

Consumers are more aware of tasting notes and have begun to opt for rather unconventional coffee beverages. “We are witnessing guests at Fig move away from the regulars like cappuccino and latte, and being open to coffee such as manual brews like pour overs, aero press and French press,” she informed. 

Factors influencing the shift

In the past five to six years, a large number of the young population running into millions also travel abroad for work or otherwise. They have picked up on trends with their exposure and started to drink high-quality coffee, appreciating both its taste and learn how it grows. “Hence the artisanal coffee movement has been emerging in India in the last few years and is becoming a new trend,” shared Manoj Kumar, CEO of Naandi Foundation and co-founder of ARAKU Coffee further commenting that the movement slowly moving from artisanal coffee towards speciality coffee for those who are discerning enough to understand its qualities. 

According to Akash Kalra, CEO and founder of United Coffee House Rewind, “artisanal coffee beans are high-quality coffee seeds which are sourced directly from farm growers and come in varied flavours and types. Since they are different from regular coffees, the demand from harvesting to processing has rapidly grown in the market over the last five years. As the new coffee connoisseurs look for a change in a shorter span, culminating rise in these kinds of coffees which inspire distinct aromas and varied flavours shall be witnessed.”

At the moment the sourcing of these coffees is limited to certain states which have the flora and fauna to support them. According to Kalra, production in larger amounts and a stable distribution network will bridge the gap till the time there is an increase in artisanal coffee producers who shall develop infrastructure of its kind to distribute their products in the market.

Brands tapping the demand

Currently, the market is swamped with new-age coffee chains as well as packaged artisanal brands such as Blue Tokai, Third Wave Coffee, Dope Coffee, and Sleepy Owl, ready to expand. Dope packaged coffee is opening experience centres in Mumbai and Delhi. Blue Tokai is eyeing markets beyond Delhi-NCR.

Earlier this year, the Allana group, an exporter of coffee from India for the last 40 years, announced its entry into the domestic market to meet the burgeoning demand for the brewed beverage. The company said it will supply its premium coffees to hotels, Quick Service Restaurants, cafes, and coffee startups. 

Interestingly, the coffee chain Barista may have been ahead of its time when it launched more than 20 years ago as tea was still a popular drink and a habit that expensive coffee couldn’t break. 

The growth of the coffee industry in India is likely to have a positive impact on exports as well. With more people getting introduced to café culture and speciality coffees, there is a growing demand for high-quality Indian coffee abroad. This presents a great opportunity for Indian coffee companies to expand their footprint in the global market.