At the heart of this booming culture are India’s Gen Z and millennials. For the young consumer, an outing to a cafe is not just about having a cup of coffee. Many youngsters are now going to cafes to hang out with friends and socialise. For some, cafes are places where one can have some quality “me time”.
This emerging business opportunity is prompting global brands like like Starbucks and Tim Hortons to go all out on India, ToI reported on August 14.
While Starbucks has been present in India for some time, Canadian coffee chain Tim Hortons made its foray in New Delhi last year. It is now expanding across NCR and parts of Punjab, besides eyeing foray into Pune, Bengaluru and Hyderabad.
Starbucks, which does business in India in partnership with the Tatas (Tata Starbucks), is eyeing launches in new towns and cities in the country.For Starbucks, getting customers in the metros is easy because of the brand’s reputation, the chain has also been able to register strong footfalls in towns such as Jalandhar and Siliguri.”The new customer addition to the industry is being led by the Gen Z and millennials. People under the age of 35 years are a very big purchasing class for the coffee space,” Deepa Krishnan, director, marketing at Tata Starbucks, told ToI.Starbucks refers to this idea as the “third space”.
According to Krishnan, “It is neither your home nor office but a space where you can just be yourself. Gen Z and millennials appreciate the concept of third space.”
Tarun Jain, CEO at Tim Hortons India, says, “Cafes answer a lot of needs — consumption, experience, companionship, conversations.”
Tim Hortons has set a goal of increasing its store count in India to 120 by 2026.
Going by the numbers, the cafe business is picking up pace in the country. For example, Tata Starbucks surpassed Rs 1,000 crore in net sales in FY23 and opened 71 new stores during the year.
Coca-Cola-owned Costa Coffee, on the other hand, is following a strategy of solidifying its presence in the top 8-10 Indian cities.
“This expansion is thoughtfully designed to tap into prime locations such as premium office spaces, airports and highways. That way, we aim to capture both the working population and travellers, who are potential customers,” Vinay Nair, general manager, India and emerging markets at Costa Coffee, told the newspaper.
The preferences of the Gen Z and millennials will be key to shaping the coffee market in India, he added.
