India's Out-of-Home Coffee Sector Expected to Hit $3.2 Billion by 2028
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Bengaluru, Dec 31 (NationPress) As coffee rises as a lifestyle choice for countless urban dwellers in a nation known for its tea, India’s out-of-home coffee sector is anticipated to reach $2.6-$3.2 billion by 2028, achieving a compound annual growth rate (CAGR) of 15-20 percent, as reported on Tuesday.
The premium coffee category (priced above Rs 200), which held a 46 percent market share in 2023, is projected to expand to 55-60 percent of the market by 2028, growing at a CAGR of 20-25 percent. This emphasizes its pivotal role in shaping the landscape of outside coffee in India, according to findings from Redseer Strategy Consultants.
This segment caters to affluent coffee aficionados who appreciate artisanal brewing methods and immersive experiences.
Conversely, the mass market (priced below Rs 100), which accounted for 50 percent of the market share in 2023, is expected to decline to 30-35 percent by 2028, with a growth rate of 8-10 percent. While affordability remains its defining characteristic, this segment presents limited options for premium differentiation, the report indicated.
Meanwhile, the mid-price range (Rs 100-Rs 200), which comprised merely 4 percent of the market in 2023, is forecasted to increase to 8-10 percent of the market by 2028, showcasing a remarkable CAGR of 35-40 percent. This sector holds significant potential for specialty brews, making it a crucial driver of industry growth.
“Coffee has evolved from instant and traditional brews to premium experiences. It has become a lifestyle product for Indian consumers, with the mid-priced segment emerging as an opportunity to fulfill the rising demand for affordable options that provide both quality and an enhanced experience,” stated Rohan Agarwal, Partner at Redseer Strategy Consultants.
This market is primed for brands to enter and offer high-quality, accessible specialty coffee solutions, thereby reshaping India’s beverage landscape, he added.
While India’s out-of-home coffee market presents extensive opportunities, companies must navigate several significant challenges.
“Complexities in the supply chain make it challenging to ensure quality and timely delivery across regions. Identifying the right locations in high-traffic areas such as malls and tech parks is critical but incredibly competitive,” the report noted.
