Cafe Franchise in India : The recent India debut of International café chains like Starbucks and Dunkin Donuts might have created quite a stir in recent headlines, but the love story of Indians and Coffee has seen a lot of ups and downs in the last two decades. In the coffee-producing parts of southern India, coffee has predominantly been the drink of choice, but the industry has always depended more on exports, rather than the huge domestic market. Over the past decade, coffee consumption in the country has almost doubled and Coffee chains have penetrated nationwide from metros and urban city centers to highway rest stops and even smaller towns. More than One thousand of them have opened in just the past 5 years alone — a number expected to grow five times over the next several years — catering to a coffee-drinking market that is growing by 25% – 30% each year, according to the Delhi based consulting firm Technopak Advisors.
Though, this growth has not been only about more coffee as almost 65 – 70% of the revenues of the coffee chains and cafes come from Food products (Both ready to eat & freshly prepared gourmet products). According to experts and industry critics, the Indian youth is a far more complicated consumer than the American or European consumer as the expectations from a café for an Indian youngster is much more in comparison to the bigger chains. The reason is that the penetration of the fast food joints in India is not that saturated in the Indian market and the same requires the coffee chains to incorporate that in their offerings in some way or the other. Further, adding to the problem is the fact that Indian consumers don’t have a wide array of palate for the coffee products or the fact that they are not as much as aware of the various forms and types of the products available in a coffee shop or café. The primary reason for the same is the lack of knowledge as well as the awareness of the products in the daily lifestyle of the people in terms of coffee. But this trend is changing and its changing fast, the entry of Global chains like Starbucks and Dunkin’ Donuts has sparked a new life in to the Industry and with the penetration of the products and increased awareness about the products in the coffee shops.
According to an estimate, the Indian coffee industry will see an unprecedented growth of about 35 – 40% for the domestic coffee and café chains and this growth rate will be sustained till the beginning of the next decade. According to an estimate, the number of coffee shops and chains in India will quadruple by FY 2017-18 and the maximum share in the same would be of Indian coffee chains.
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