Coffee, a drink so long mostly limited to cafes in a tea-loving North India, is making a fresh charge into urban households with the rising popularity of specialised coffee makers and ready-to-brew capsules that offer cafe-like blend.
With coffee chains such as Cafe Coffee Day and Lavazza and appliance makers like Philips, Panasonic and Morphy Richards pushing ready-to-brew coffee and specialised coffee makers, many wealthy urbanites across the country now enjoy coffee in most flavours and varieties available in cafes in the luxury of their homes.
"Sales of the machines is triggered by consumers who want to satiate their cafe experience at home as an extension of the cafe," says Vejay Anand, president at Cafe Coffee Day. The country's largest cafe chain recently launched coffee makers and coffee capsules that give cafe-like blend when brewed in the machine.
Coffee drinking has become fashionable over the last decade, thanks to specialised cafe chains such as Cafe Coffee Day, Barista Lavazza and Costa Coffee, which have emerged as popular hangouts for the urban youth.
The Coffee Board of India estimates that coffee consumption has grown 6% a year since 2000, up from average growth rate of just 2% in the decade before. The board will start a new consumption survey in January, which will take around four months to complete.
The overall coffee consumption in the country is around 1 to 1.1 lakh tonne. As per estimates, the cafe component will be around 20%, with higher consumption in the urban markets. But this segment is one of the fastest growing and could double over the next five years, as per the Coffee Board estimates. Value wise, various studies have put the organised cafe market in India at aroundRs1,100 crore.
Coffee chains estimate that coffee consumption in cafes and five-star hotels in the country is growing more than 20% a year while the overall coffee market is growing 15% a year.
MACHINE POWER
The growth rate may speed up with the increasing popularity of coffee machines. Italian coffee company Lavazza-owned Fresh & Honest Cafe reports good demand for its range of coffee machine brands such as Swiss Egro, Thermoplan Black & White, Nuova Simonelli, Saeco and Delonghi. It also sells espresso coffee machines that work with coffee capsules, allowing different brews and flavours in home. Lavazza's coffee makers are priced anywhere betweenRs12,000 and Rs60,000.
Cafe Coffee Day, which runs more than 1,350 cafes across the country, sells semi-automatic and fully automatic coffee makers with prices starting at Rs4,000 at its outlets. Its Anand says consumers in their 30s, who appreciates the brew of roast and ground coffee available in the cafes, are the main consumer segment for the machines. He says there is brisk demand from smaller cities such as Nagpur, Kochi and Baroda. Philips IndiaBSE -0.03 %, which launched three coffee machines priced between Rs13,995 and Rs74,995 in August, sells most these machines to upper-class consumers in the metros and tier one cities.
"Some consumers in upwardly mobile pockets like South Delhi, Gurgaon and South Mumbai are keeping the coffee machines in their living room and drawing room," ADA Ratnam, president (consumer lifestyle) at Philips India, says.+ Officials of Philips, Panasonic and Morphy Richards say home coffee makers is still a niche segment due to high prices of the machines, but it is growing more than 50% a year.
Panasonic India MD (consumer products) Manish Sharma says the total industry sales for coffee makers in India this year will be around 25,000 units.
COFFEE IN TEA LAND
While South India accounts for the largest number of coffee drinkers, the Coffee Board estimates that 50% of the growth in consumption is coming from other regions, including the North.
Cafe Coffee Day's Anand says cafe chains have played a big role in expanding coffee consumption in pre-dominant tea markets such as the North and East. "We are organising festivals in the cafes on how to brew coffee since one of the major road block has been the fact that consumers in most parts do not know how to brew coffee," he says.
Jawaid Akhtar, chairman of Coffee Board, says the recent fluctuation in coffee prices may not have influenced consumption.
Coffee prices had started rising in mid-2010 and peaked at Rs11,000 per 50 kg for the premium arabica variety, while robusta prices touched Rs8,000 per 50 kg last year before dropping back to 2010 levels. On Friday, the prices stood at Rs6,700 andRs6,000 per 50 kg, respectively.
