Indians Consumed $1.5 bn Worth Coffee Outside Home in 2024

Chennai: Indians spent $1.5 billion to consume coffee outside their homes in 2024. As the affluent are increasingly acquiring the taste of the brew, premium coffee consumption is growing faster and is estimated to grow the out-of-home coffee market to $3.2 billion by 2028.

The out-of-home market, which was valued at $1.2 billion in 2023, grew to $1.5 billion in 2024 and in the next four years is expected to be valued at $2.6-3.2 billion, growing at a CAGR of 15-20 per cent, according to the study by RedSeer Consulting.

Coffee becoming a lifestyle and experiential product among urban consumers, the out-of-home coffee market is on an exciting growth trajectory, evolving into a dynamic, multi-segment beverage industry.

Currently, the mass market for coffee accounts for 50 per cent of consumption. Mass market coffee priced below Rs 100 comprises primarily local, unbranded players and roadside stalls. This segment caters to budget-conscious consumers. While sizable, it has limited scope for differentiation or experiential growth.

The mid-segment priced between Rs 100 and Rs 200 accounts for 4 per cent of the market. Positioned between affordability and premium quality, this segment is gaining traction. It bridges the gap for coffee enthusiasts seeking specialty options at accessible prices, making it ripe for innovation and new entrants.

The premium segment of coffee priced above Rs 200 currently has 46 per cent share of the market. This segment targets coffee connoisseurs and emphasizes artisanal brews and experiential aspects. Though niche, it demonstrates strong potential due to consumers’ willingness to pay for quality and customization.

However, by 2028, the mass segment is expected to see its share shrinking to 30-35 per cent. On the other hand, mid-segment will have a bigger share of 8-10 per cent and premium segment will see the fastest growth to grab 55-60 per cent share of the market.

Rising Demand for Specialty Coffee like Americano and Cappuccino over instant and filter coffee, on-the-go consumption by busy urban professionals, awareness about the health benefits of coffee and brands raising the bar with in-house roasteries and artisanal brewing techniques are driving the market.

High Street cafes, mall outlets, tech park kiosks, university cafes and airport kiosks see the maximum coffee consumption.