Why the coffee industry should consider India’s market potential 

Coffee Intelligence – May 9th 2025 – Sarah Charles.

• India’s coffee industry is set to double by 2030, driven by a young, urban middle class
• Costa Coffee is targeting 40–50 new stores annually and Coffee Island is aiming for 250 outlets by 2029
• Meanwhile Western markets remain stagnant, according to the European Coffee Federation

INDIA’s coffee market is forecast to double by 2030, with revenues from coffee shops rising at nearly twice the pace of their American counterparts – a sign of both growing affluence and an evolving urban palate.

Costa Coffee, under the leadership of CEO Philippe Schaillee, has announced plans to position India among its top five global markets by 2030. 

With over 200 outlets already established, the company aims to open 40 to 50 new stores annually, focusing on metro cities and targeting younger consumers willing to pay a premium for coffee experiences.

Similarly, Greek coffee chain Coffee Island has entered the Indian market, launching its first outlet in Gurugram. In partnership with Vita Nova, the brand plans to expand to 20 locations by March 2026 and further increase its footprint to 250 outlets by 2029, aiming to bring European coffee culture to Indian consumers. 

“India’s coffee sector is undergoing a profound transformation, fuelled by a young, ambitious middle class that values quality, curated experiences, and global trends,” says Konstantinos Konstantinopoulos, CEO of Coffee Island. 

“Urbanisation, rising disposable incomes, and rapid digitisation have laid a fertile foundation for specialty coffee to flourish. We’re also witnessing the rise of a vibrant café culture – particularly in tier-1 and tier-2 cities – where cafés serve not just as places to enjoy coffee, but as lifestyle destinations for work, social interaction, and self-expression.

Coffee Island’s value proposition resonates with this evolving consumer mindset, and that’s why we’re planning expansion there. Our confidence stems from this cultural shift, India’s demographic advantage, and early indicators pointing to a market ready to embrace a more differentiated and elevated coffee experience.”

India’s coffee production supports this growing demand. According to the Coffee Board of India, the country produced approximately 374,200 metric tons of coffee in the 2023/24 marketing year, with robusta accounting for 261,200 tons and arabica for 113,000 tons. 

Despite being the world’s seventh-largest coffee producer, India’s per capita coffee consumption remains low at 0.07 kg, compared to the global average of 1.3 kg. 

However, this gap presents a significant opportunity for growth as consumer preferences evolve.

Overlooked potential: India’s absence in global coffee conversations

Despite its substantial production and emerging consumer base, India often remains absent from global coffee industry discussions. 

The data focus tends to be on Latin America and Africa for production and on consumption markets like the U.S., the EU and Brazil, and emerging markets like China, Southeast Asia, and Latin America, often overlooking India’s dual role as both a producer and a growing consumer market. 

India ranks as the world’s second-largest tea producer, yielding 1.1 million tonnes annually, yet exports less than 30% of it. In contrast, it is the eighth-largest coffee producer, with an output of 360,000 tonnes, of which over 75% is exported. In essence, Indians consume around 750,000 tonnes of domestically grown tea, but just 91,000 tonnes of their own coffee.

While this number – and per capita coffee consumption in India – remains comparatively low, consumption is increasing and bearing in mind the sheer size of its population, India is becoming a coffee market that, like China, cannot be ignored.

The Specialty Coffee Association (SCA) has maintained a long-standing presence in India, notably through the World Coffee Competitions, with the Coffee Board of India as an enduring partner. The Coffee Quality Institute (CQI) has also led numerous development initiatives in the country, and the International Coffee Organization (ICO) selected India as the host of the World Coffee Congress in 2023, underscoring its growing relevance on the global stage.

“As a member of the SCA Board, I can confidently say that India has been a priority region, especially since 2021, when the SCA’s white paper formally expanded the definition of specialty coffee to include all coffee species, including robusta,” says Konstantinos. 

“This was a critical moment that helped legitimise and elevate India’s robusta production in specialty coffee circles. In 2023, SCA’s CEO had an active presence at the World Coffee Congress in Bangalore. Finally, it’s important to recognise the leadership of Madam Sunalini Menon, a respected figure in global coffee, who currently serves on the SCA Board and has been a longtime trustee of CQI. Her continued presence is a testament to India’s deep-rooted and evolving role in the specialty coffee movement.”

In contrast, according to the European Coffee Federation’s European Coffee Report for 2023-2024,  in 2023-2024, Western economies all experienced slight reductions in per capita consumption. The EU27 coffee market remained flat in volume between 2021 and 2023, growing by just 0.2% to maintain an annual total of 1.74 million tonnes across all three years.

With domestic consumption on the rise, there’s a pressing need for the global coffee industry to recognise and engage with India’s evolving market, alongside other emerging markets with growth potential like China, Indonesia, Latin America, Southeast Asia, and the Middle East. 

The rise of specialty coffee: India’s next frontier

India’s specialty coffee scene is gaining traction, signaling a shift in consumer preferences and market dynamics. 

Belgian investment firm Verlinvest’s $35 million investment in Blue Tokai Coffee Roasters underscores this trend. The funding aims to accelerate Blue Tokai’s growth across geographies and product categories, reflecting confidence in India’s specialty coffee potential. 

Global brands are also taking note. Nestlé has launched its premium Nespresso line in India, opening its first boutique in Delhi and expanding through e-commerce channels. 

The company is also exploring opportunities to introduce Starbucks-branded ready-to-drink coffee products in India, targeting different coffee consumption moments as more consumers make coffee their preferred beverage. 

The Indian coffee equipment market is projected to grow at a CAGR of 6.2%, reaching USD 586.7 million by 2033, indicating a burgeoning interest in home brewing and specialty coffee preparation. 

“Tier-2 and Tier-3 cities are coming up quickly, and consumers there are increasingly looking for global-grade experiences within their own cities,” says Konstantinos. “The fact that these markets are still relatively underpenetrated creates a real first-mover opportunity.”

“When it comes to retail, the opportunity goes well beyond cafés. We’re seeing strong potential in formats like Coffee Island’s flagship ‘on-the-go’ models, packaged beans, and home-brew capsules. As more people become familiar with specialty coffee, they want that same level of quality in their homes too.

Sustainability and traceability are becoming non-negotiables – especially for younger consumers. There’s a real shift happening, and our focus on direct trade and ethical sourcing means we’re well-positioned to connect with that mindset. It’s not just about generating revenue – it’s about building loyalty and giving people something they can feel proud to support.”

This growth is further fuelled by cultural factors, such as low alcohol consumption habits and the emergence of “café nightclubs” and “coffee raves,” blending social spaces with coffee culture. One coffee roaster and founder of specialty coffee space Corridor Seven Coffee in Nagpur mentions the purpose of his coffee raves is to make coffee more accessible and increase its consumption, and to benefit Indian coffee farmers as well.

As India embraces specialty coffee, the global industry stands to benefit from engaging with this dynamic market. Recognising India’s dual role as a significant producer and an emerging consumer market is crucial for fostering inclusive growth and innovation in the global coffee landscape.

Why the coffee industry should consider India’s market potential  – Coffee Intelligence