Coffee Shops and Cafes are Becoming New 'Product Innovation Labs': Bonafide Research

More than almost any other foodservice channel, coffee shops and cafe have the credibility to create whole new categories of soft drinks, benefiting from daily consumer attachment and strong artisanal appeal. Coffee shops and cafes are gaining the popularity and attention of Indian consumers, especially by young consumers. 
The Cafes and Coffee Shops industry has grown strongly over the past five years, owing much of its success to India's love of quality coffee and vibrant coffee culture. Cafe culture is about more than just coffee, it's a learning of dining customs, lifestyle traditions and social dynamics that explores how consumers use foodservice. Cafe market in India has some sort of long-standing cafe-based tradition; however, modern trends are driving the segment’s evolution in India. Specialist coffee shops and cafes are gaining popularity among young consumers, forming new social behaviour, modernization and changing the way the world drinks.

According to recently published report of Bonafide Research “India Packaged Coffee & Cafe Chain Market Outlook, 2027-28”, coffee shops & cafe market will grow at a CAGR of more than 22% over next six years. Specialist coffee shops and cafes are relatively new phenomenon in Indian coffee market, which is gaining high popularity among Indian consumers. Many of the largest growth opportunities are in the coffee market that have long-standing coffee-drinking traditions and with so many coffee options already available for consumers. 

A large and growing percentage of coffee events and sales now take place through coffee chains. This creates demand for better-quality; higher-priced options. While also driving increased competition, as out-of-home brands increasingly look to establish themselves in the retail space. Bolstered by the emerging popularity of specialist coffee shops in India, consumers are increasing looking for operators to sell social experiences as much as they do coffee or baked goods. This idea of foodservice as a "third place" is bleeding into other categories, and operators in everything from fast food to cafes for ways to drive snacking traffic and fill tables between traditional mealtimes. Furthermore, India's entrenched coffee culture has given rise to many new cafes and coffee shops opening in inner city areas.
Innovations in coffee and increasing demand for local and regional coffee in India drives the revenue of coffee shops and cafes in the coffee market.
In emerging market cafe culture is expanding its presence among Indian coffee industry. Operators in other categories are taking steps to claim a share of the lucrative demand for coffee and snacks throughout the day. Fast food operators are adding premium coffee and redesigning outlets to feel more like premium cafes, forcing coffee shops to scramble to maintain their share in key markets. In response to greater competition, coffee shop operators are escalating their menus in order to serve a wider range of day parts. Many are offering more substantial lunch options, such as sandwiches and salads, while others are adding alcohol and shareable small plates in order to compete with cafes.

Major companies operating in the packaged coffee & cafe chain market of India are Carnation Hospitality Private Limited (Barista Cafe), Coffee Day Global Limited (Cafe Coffee Day), Devyani International Limited (Costa Coffee), Hindustan Unilever Limited, Jubilant FoodWorks Limited (Dunkin Donuts), Nestle India Limited, Pan India Food Solutions Pvt. Ltd. (The Coffee Beans &Tea Leaf), TATA Coffee Limited, Tata Starbucks Private Limited

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