Coffee retailer Tata Starbucks Pvt Ltd sees the out of home (OOH) coffee consumption volumes in India rising three times over the next decade on rising income levels and growing urbanisation.
“From around 1,153 million cups in 2023, the consumption is forecast to rise to 2,501 million cups in 2033,” said Sushant Dash, CEO, Tata Starbucks Pvt Ltd, addressing the planters community at the 130th annual meeting of the United Planters’ Association of South India (Upasi) in Coonoor on Wednesday.
Presently in India, tea is having 90 per cent penetration in home consumption, while coffee is at 12 per cent. “With rising urbanisation and rapid income increase, the demand for OOH coffee is set to grow in India,” Dash said. Besides income growth, the younger demographics will positively influence the coffee consumption frequency, he added.
The OOH coffee consumption, which grew at over 5 per cent between 2018 and 2023, is set to grow over 11 per cent during 2023-30 and over 9 per cent beyond 2030.
Starbucks, which opened its first outlet in India in October 2012, has now over 354 stores across 46 cities and has over 4,000 employees. The company was seeing better traction in smaller cities such as Siliguri, Guwahati and Raipur among others when compared to the larger metros, Dash said.
Further, the coffees sold by Tata Starbucks in India are all sourced within the country, Dash said. “Coffee penetration will grow from 16 per cent to 36 per cent in the next 10 years in India, to levels close to where China is today,” he added.
Commenting on the global trends in coffee, Dash said that the 18-24 age group contributed to 32.7 per cent of the speciality coffee consumption in 2022 and those in the age group of 25-39 accounted for 12.7 per cent. “There is increasing demand for certified coffee driven by the awareness and social concern. Also the surge in iced coffee is driven by climatic condition, lifestyle preference and innovation,” he said.
Starbucks sources about three per cent of the total arabicas produced globally from over 30 countries and over 4 lakh farmers. Starbucks doesn’t buy coffee unless it meets the criteria of quality, economic transparency, environmental leadership and social responsibility, he said.