India's Coffee Revolution: Brewing a New Culture in Smaller Cities
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Traditionally known for its love affair with ‘chai,’ India is now experiencing a coffee revolution. This shift initially started in the 1990s fueled by globalisation, spurred the rise of coffee drinking culture across the country. But did coffee culture start only post liberalisation when the Indian markets were open to multinational companies? No, coffee drinking, especially south India filter coffee, also known as ‘Kaapi,’ dates back to the 17th century. The unique brewing techniques used while preparing kaapi sets it apart from other coffee. However, in current times, coffee has become an alternative to quintessential chai throughout the country.
The Indian coffee market is growing 10.15% year on year which is approximately more than three to four times faster than the global increase of 2.5 to 3%. This rise is attributed to the growing popularity of coffee culture. The expansion of homegrown coffee chains like Barista and Café Coffee Day from metros to Tier-II cities and beyond, initially drove this shift. The arrival of global coffee giants like Starbucks, along with the growth of local brands such as Blue Tokai Roasters and Black Baza, has further popularised coffee culture across the country. Recently, these coffee chains have also entered Tier-II, and Tier-III cities like Varanasi, Amritsar, Mussoorie, Manali, etc. Tapping into the growing middle class, these chains are catering to evolving coffee drinking culture across the country.
The cultural significance of coffee in India is also deeply tied to iconic spaces like Indian Coffee House, which has served as a meeting ground for intellectuals and artists. The first coffee house started in Bombay and slowly expanded to many smaller cities like Indore, Bhopal, Thrissur, Raipur, Nilaspur, Dharamsala, etc, serving up affordable cups of nostalgia and conversation. Meanwhile, University campuses like Punjab University and IISER Bhopal have also embraced coffee culture, with students increasingly opting for coffee as their go-to beverage.
On the flip side, Café Coffee Day (CCD) also made its way into the coffeehouse market in 1996 with its tagline - “A lot can happen over coffee,” creating cozy hangouts where people could chat, chill, or just vibe together. Besides creating social spaces, they also made coffee culture accessible by introducing coffee machines. For home consumption, the widespread availability of instant coffee from brands like Nescafé and Bru has played a crucial role in making coffee an everyday habit. Affordable sachets and relatable marketing campaigns have encouraged more households to adopt coffee into their routines. Nescafé in particular, targeted Indians teens through campaigns, creating a new generation of coffee drinkers. Such efforts not only enabled household penetration but also boosted sales and market share.
This cultural shift raises an important question: What does the proliferation of coffee culture in Tier-II cities and beyond indicate? Several factors have contributed to this trend including rise of digital and social media, urbanisation, and evolving lifestyle choices. Social media, especially Instagram, has also played a vital role in making coffee more trendy, with café aesthetics and latte art, thus transforming it into an aspirational lifestyle choice among the millennials and Gen Z. Likewise, social media influencers also play a pivotal role, with their recommendations and contents driving significant traffic to these coffee shops.
The Coffee Board of India reports that the rise in disposable income and spending capacity of a household have played a significant role in driving this cultural shift. India’s younger population is also moving towards specialty coffee consumption, marking an intergenerational shift. Rajat Agarwal, CEO of Barista Coffee notes, “in the last 5-6 years, Tier-II consumers are ready to pay a premium for branded products thereby attracting brands to consider these cities for their growth.” In the midst of growing demand for coffee, Starbucks India aims to open 1000+ stores by 2028. Likewise, the homegrown brand - Barista also aims to double its store count by 2030. These coffee chains are targeting Tier-II and Tier-III cities, not only catering to evolving coffee culture but also creating employment opportunities for the local residents.
The rise of café culture in India's Tier-II cities is also driven by a blend of global exposure and a growing appreciation for artisanal coffee experiences. With cafés like Retro by Cakewaali in Jalandhar and KOKORO in Surat fostering dedicated communities, coffee enthusiasts are increasingly exploring diverse brewing techniques and flavor profiles, transforming smaller cities into burgeoning coffee hubs. In Gangtok, Café Fiction located near Rachna Books has become a cultural hotspot where local youth as well as book loving tourists gather to discuss ideas over coffee.
India's coffee culture is no longer confined to Tier-I cities; it is now being embraced across the country as a reflection of changing consumer preferences and a growing desire for diverse and enriching experiences. The proliferation of larger chains in smaller cities with enormous employment opportunities also indicates cultural as well social shift. The coffee revolution is not just about the beverage, it's about how people are choosing to define their lifestyles, and aspirations.