It’s time for Indian tea and coffee market to scale up

The coffee & tea industry has taken a big leap from Rs 25,166 crore in 2013 to almost Rs 41,800 crore in 2017. In less than five years, the Industry has grown three folds, bringing out a lot of biz opportunities in both, the tea & coffee sectors. Moreover, according to recent reports it is being predicted that the total number of organised Cafe chains from 3,500 presently, would increase to almost 6,200 by 2020. These figures are a clear indication of the success that is brewing for the interested investors.

Propelling factors for tea & coffee culture
Increase in disposable incomes, the higher number of double income households, more global exposure, increasing media penetration and attention to food, rapid urbanisation and changing lifestyle preferences- influenced by western countries, have all added up to the foray of many national and international players in the sector.

Brewing up the Cafe biz
Last few years have seen many international brands making inroads in the country, which simultaneously was an awakening for the Indian entrepreneurs to think of taking a sip from this ever growing industry. The café chain market which stands at Rs 1, 820 crore, is growing at the rate of 20 per cent in value. This brings out the fact that the cafe market is brimming with opportunities for the investors. Sanchit Saxena, Founder, 07 Arena- The Gourmet informs, “The concept behind opening 07 Arena – The Gourmet is to give our customers a relaxing place to hang-out with their friends for yummilicious high quality food, a food that fits into everyone’s budget,especially students who are budget restricted and can’t afford luxurious cafes with their pocket money.” Barista, Gloria Jean's Coffee, Coffee Day Xpress, Costa Coffee, Coffee Bean Tea Leaf, Di Bella Coffee, are few of the Indian Cafe giants who have set up and grown via franchising.

Sipping success with Tea brands
India is a country of tea lovers. A day doesn’t start for many of us without a cup of streaming hot tea. In spite of it being a staple drink, the concept of tea lounges is still in its nascent stages. This can be due to the notion that people may not prefer to have tea outside. However, this misconception has been cleared with the initial success of tea lounges in the country. Anirudh Poddar, Co-Founder, Chai Break said, “The idea of Chai-Break was conceptualised while sitting in one of the coffee shop where we wanted to have tea. We realised at that time there was a need of a place to serve good tea in a retail format as this place remained unexplored. Therefore, we commenced with our first retail chain in Novemeber 2011 and since then have been able to open multiple outlets in Kolkata, Durgapur and Bhubaneshwar.” Likewise many other brands are coming up with exclusive cafés, lounges or bars that are offering a unique business proposition to prospective investors.Few of the brands with opportunities in this sector are Wagh Bakri Tea Lounge, Tea Trails, Chaayos, Chai Break and Chaipatty.

Brewing via franchising
Franchise model is driving the growth of both, the café & tea brands and in process brewing immense business opportunities for interested investors wanting to enter café business by associating with leading brand names.Poddar, Chai Break shares, “We are planning to adopt the franchise route now as we feel that we can expand faster with franchisee coming in as investors. I think the retail chains in India are progressing well in comparison to the olden days of tea at the ‘dhabas’. In long term there should be more tea lounges coming up based on the response that the current players are getting.”

Low cost opportunity
Investing in a coffee or tea franchise is a great step for long time profits. Moreover, investment may vary on the concept, whether you opt for a kiosk, shop-in-shop, or small cafe lounge set up. Saxena of 07 Arena who recently adopted the franchise way for expansion said, “Currently we are working on bringing up a franchise module into the market. Basic investment cost will range between Rs 15 to 20 lakhs.”

However, the investment may increase for standard coffee & tea lounges. As informed by Poddar, “Chai Break Franchise would cost an investor a minimum of Rs 50 lakh.”