Bengaluru, India – December 31, 2024 – Redseer Strategy Consultants has unveiled its latest report, shedding light on the transformative growth trajectory of India’s Outside coffee market. The report forecasts the market to achieve an impressive valuation of $2.6 to $3.2 billion by 2028, with a compound annual growth rate (CAGR) of 15-20%.

This marks a shift in a traditionally tea-dominated nation, as coffee emerges as a lifestyle choice for millions of urban consumers. The report identifies urbanization and evolving consumer preferences as primary drivers behind this growth. From quick morning fixes to leisurely café experiences, coffee consumption is gaining momentum across demographics, redefining beverage habits in India.

An Outside Coffee Market with Layers of Opportunity

India’s Outside coffee market presents growth opportunities across three distinct segments:

  • Mass Market (Below INR 100): In 2023, this segment comprised approximately 50% of the market and catered primarily to budget-conscious consumers through local stalls and unbranded vendors. By 2028, the mass market is projected to shrink to 30-35% of the market, growing at a CAGR of 8-10%. While affordability remains its hallmark, the segment offers limited avenues for premium differentiation.
  • Mid-Price Range (INR 100-200): Accounting for just 4% of the market in 2023, this segment bridges affordability and premium quality. By 2028, it is expected to grow to 8-10% of the market at an impressive CAGR of 35-40%. This space offers immense potential for introducing specialty brews, making it a critical driver of industry expansion.
  • Premium Segment (Above INR 200): Representing 46% of the market in 2023, this segment targets affluent, discerning coffee enthusiasts with artisanal brewing and experiential consumption. By 2028, the premium segment is anticipated to grow to 55-60% of the market at a CAGR of 20-25%, underscoring its dominant role in shaping India’s outside coffee landscape.

 

The report identifies a significant opportunity within the mid-price segment, which currently lacks sufficient brands offering affordable specialty coffee. This gap presents a strategic entry point for businesses aiming to capture an underserved consumer base.

Shifting Consumer Preferences

As urbanization and lifestyle changes reshape India’s coffee culture, several dynamics are influencing consumer behavior. The report highlights:

  • Rising preference for specialty brews: Consumers are gravitating towards beverages like Americanos and Cappuccinos, driven by a desire for unique flavors and artisanal preparation.
  • On-the-go consumption: Convenience is key, with portable options gaining traction among office-goers and young professionals.
  • Health-conscious choices: Ingredients and preparation methods that align with health trends are redefining coffee consumption patterns.
  • Crafted Quality: Consumers are pushing towards brands that prioritize fresh, artisanal brewing and custom roasts, raising the standard of coffee.

 

Rohan Agarwal, Partner, Redseer Strategy Consultants, said, “Coffee has moved beyond instant and traditional brews to premium experiences. It is now a lifestyle product for Indian customers, with the mid-priced segment emerging as a whitespace to meet the growing demand for affordable options, offering both quality andan  enhanced experience. This market is ripe for brands to step in and deliver high-quality, accessible specialty coffee solutions, redefining India’s beverage landscape.“

Key Drivers for Success in India’s Outside Coffee Market

Based on the report by Redseer Strategy Consultants, businesses aiming to thrive in India’s outside coffee market can focus on:

  • Consistent Quality Assurance: Robust sourcing practices, artisanal brewing techniques, and stringent quality control are essential to meet rising consumer expectations.
  • Elevated Customer Engagement: Friendly staff, fast takeaways, and seamless ordering—both offline and online—remain critical to driving customer satisfaction.
  • Innovative Experiences: Modern café designs, interactive features, and value-added services can create a strong brand identity and foster loyalty.
  • Targeted Expansion Strategies: Securing prime locations with high footfall while balancing operational costs is key to scaling operations.
  • Operational Excellence: Efficient supply chain management is critical for maintaining quality and meeting logistical demands as businesses expand.

Overcoming Barriers to Success 

While India’s outside coffee market offers vast opportunities, businesses must overcome key challenges. Supply chain complexities make it difficult to maintain quality and timely delivery across regions. Finding the right locations in high-traffic areas like malls and tech parks is crucial but highly competitive. Consistency in quality requires strict checks and staff training, raising operational costs. Companies must also cater to diverse tastes, identifying unique preferences beyond popular flavors like Arabica and Robusta. Lastly, standing out in a crowded market demands strong brand recognition and customer loyalty.

The Coffee Boom

The growth of India’s outside coffee market is more than just a caffeine surge—it reflects the country’s shifting cultural and economic fabric. With billions in opportunities on the horizon, businesses have the chance to establish themselves as frontrunners in this evolving sector. Visit the full report on Redseer Strategy Consultants’ website: LINK.