Indians spent a total of $1.5 billion on coffee outside their homes in 2024, with a growing appetite for premium coffee among the affluent driving the surge. This demand is expected to continue growing, with the out-of-home coffee market predicted to reach between $2.6 and $3.2 billion by 2028. This marks a sharp increase from its valuation of $1.2 billion in 2023, according to a study by RedSeer Consulting. The market is projected to grow at an annual rate of 15-20% over the next four years.
The Rise of Coffee as a Lifestyle
Coffee is rapidly becoming a lifestyle and experiential product, especially among urban consumers. The out-of-home coffee market is evolving into a diverse, multi-segment industry, offering consumers everything from budget-friendly options to premium experiences.
Currently, the mass market accounts for half of the coffee consumption. Coffee priced below Rs 100, often sold by local, unbranded players or roadside stalls, targets budget-conscious consumers. While this segment is large, it has limited room for differentiation or growth in the premium experience.
Growth in the Mid and Premium Segments
Coffee priced between Rs 100 and Rs 200, which makes up about 4% of the market, is gaining momentum. This mid-segment caters to consumers who seek better quality but at more affordable prices. It bridges the gap between budget-friendly coffee and high-end options, offering room for innovation and new entrants.
The premium coffee segment, priced above Rs 200, holds the largest share of the market at 46%. This segment is popular among coffee enthusiasts who value artisanal brews and personalized experiences. While smaller in size, it shows strong growth potential, as consumers are willing to pay more for high-quality, customizable coffee options.
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