- Indian coffee consumption is booming, and the market is bigger than ever
- Domestic brands are playing a key role – Blue Tokai is set to open 200 new stores in India by 2027
- Equipment manufacturers are taking note – as consumption grows, so does the need for innovative new espresso machines, grinders & more
THE Indian coffee market is expected to double in size by the end of the decade – with the revenue of coffee shops in the country growing twice as fast as in the USA.
In response, the rate at which European coffee equipment manufacturers have launched in India has understandably increased. For example, in May 2024, WMF launched its “Espresso Next” in Bengaluru, via local partner Kaapi Machines; La Marzocco entered the market as far back as February 2020.
Beyond these manufacturers, Nestlé is eyeing up the retail side of the market, with the launch of Nespresso late last year and flagship stores planned for Delhi and other key cities.
What’s driving this growth – and why is it so important for equipment brands?
India is the second largest producer of tea in the world – 1.1 million tonnes annually – but less than 30% is exported. It is also the eighth-largest producer of coffee – 360,000 tonnes annually – but more than 75% is exported. In summary, Indians drink 750 million tonnes of their own tea and just 90,000 tonnes of their own coffee.
Nevertheless, coffee consumption is on the rise; since 2018, it has grown by 30%. In the last 12-month period, Indians consumed 1.3 million 60-kilogram bags of green coffee, up from 0.87 million in 2021.
“A few clear trends are at play which points to strong, sustainable growth in India’s specialty coffee market,” says Abhinav Mathur, CEO of Kaapi Machines.
“As a coffee-producing country with multiple estates, many small roasteries have proliferated, especially during and since the pandemic. These businesses are creating awareness around good coffee and fresh brewing.”
Approximately 52% of Indians are under the age of 30 – that’s 700 million Millenials, Gen Zs, and Gen Alphas. Rapid globalisation and social media have made these age groups the most tech-savvy yet and the most likely to share their defining characteristics across borders or markets.
Coupled with a booming domestic middle class, young Indians are set to wield formidable spending power in years to come, prioritising vibrant, diversified lifestyles, experiential consumerism, and innovative, functional products. And already, despite tradition, 31% are more likely to drink coffee than tea.
“Gen Z consumers are increasingly working from home and preferring cafes as community spaces; coffee is an essential part of their daily routine, and they want to chart a different path than earlier generations,” says Abhinav.
Domestic coffee shop brands are already exhibiting the effect of shifting preferences. Blue Tokai, a chain touting Indian specialty-grade beans and a boutique-at-scale aesthetic, has grown from a single Gurgaon-based shop in 2013 to 130 outlets across India today, serviced by four commercial roasteries.
Third Wave Coffee has already opened 114 coffee shops since 2016 and plans to add up to 100 new outlets a year from 2025 onwards. Barista, one of India’s true coffee culture originators, has exceeded 400 outlets, and abCoffee Brews has secured funds for a 100-store expansion program.
Whether overseas or domestic, however, these brands are increasingly characterised by operational efficiency and enhanced via automation – just as successful coffee shop chains are elsewhere. As we’ve seen around the world, this means one thing above all else: A gap for innovation in equipment, especially for super-automatic machines capable of catering to this demand.
As the portfolios of both homegrown and multinational chains grow, demand for equipment will shift – and the market will change in kind.
Looking ahead: Is India the next China?
“The coffee equipment market has grown [by around] 45 to 50% since 2021,” Ahbinav states.
“The growth is due to the rapid expansion of domestic and international chains, alongside coffee vending businesses targeting offices and hotels. High-quality equipment is in demand – La Marzocco and Mahlkonig have scaled their presence in India nearly eightfold in recent years.”
The pace of growth that Abhinav and the rest of the coffee equipment market are witnessing is reminiscent for some of the Chinese coffee boom in the late 2010s.
Tea is as synonymous with China as it is with India; it is similarly culturally significant, rooted in centuries of habitual and ceremonial consumption, and remains the beverage of choice for older generations. And much like India, China boasts an enormous and rapidly growing middle class hungry for products and lifestyles inspired by globalisation, like coffee.
Last year, the president and CEO of Carimali, Umberto Doglioni Majer, took a trip to India to announce the launch of the Carimali GLOW: A mid-sized, fully automated coffee machine aimed at small to medium-sized cafés and coffee shops.
Discussing the launch, he suggested that India was following in the footsteps of neighbouring markets, and was set to transition from a predominantly tea-drinking culture to one more obsessed with coffee. In the years since, Abhinav reports that Carimali have set up local teams in the country.
Today, just 26 years after Starbucks opened its first outlet in China, it has opened more than 7,500 outlets. The country is far and away the largest coffee shop market in the world.
This dizzying upward trajectory was backed chiefly by multinational franchises acknowledging the market’s potential and domestic chains leveraging automation and technology to match quality and convenience.
Luckin Coffee, China’s industry leader, came to market in 2017 with a digitally-native business strategy that still relies on app-enabled mobile ordering, relentless menu innovation, and fully automatic Schaerer espresso equipment to service 16,000-plus locations.
India’s leading coffee companies are already following suit. For example, abCoffee promises customers a brew in less than 90 seconds via NFC touchpoints, prefers a QSR outlet approach, and has built a mobile ordering and payment tech stack that echoes Luckin’s.
Carimali’s move shows that more Italian manufacturers are taking note of India’s appetite for service-enhancing coffee equipment that integrates seamlessly with tech-forward operations.
“There is a clear perception of higher quality from European brands amongst Indian customers,” says Abhinav. “European equipment has been present locally for almost 20 years through local distributors, and there is a long legacy of trust between them.’
“The local partners have invested heavily in market activation, helping international brands develop their reputations, and we expect more to open local offices and demand to grow further.
“The government has also introduced a new regulation called BIS – a quality certificate that is mandatory for importing coffee equipment. Thus far, most international brands have applied by not yet been granted the certification; as such, distributors like Kaapi are collaborating with foreign manufacturers to set up joint ventures.”
Finally, he also adds that Chinese equipment manufacturers are the fastest-growing in India, explaining that both Kalerm and Dr. Coffee have grown “by more than 100%” in the last two years.”
Considering the rate at which young Indians are choosing coffee as both a social and functional beverage – it seems the future is clear: Automation is on the way. Just who will make their mark, however, remains to be seen.
Coffee Intelligence
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