“Coffee consumption outside the home tripled over the next decade as incomes rose”

Coffee retailer Tata Starbucks Pvt Ltd estimates that out-of-home (OOH) coffee consumption  in India will triple over the next decade due to rising income levels and urbanization.  “Consumption is forecast to grow from around 1.153 million cups in 2023 to 2.501 million cups in 2033” said Sushant Dash, CEO of Tata Starbucks Pvt Ltd, while addressing the planting community at the 130th annual meeting of the UK Planters Association. South India (Upasi)  Coonoor on Wednesday. 

 Currently, tea accounts for 90 percent of India’s domestic consumption, while coffee accounts for 12 percent. “With rapid urbanization and rising incomes, the demand for OOH coffee in India is expected to grow,” said Dash. Besides income growth, the frequency of coffee consumption is positively influenced by the younger population structure. OOH coffee consumption, which grew more than 5 percent from 2018-2023, will grow more than 11 percent from 2023-30 and more than 9 percent after 2030.

  Starbucks, which opened its first store in India in October 2012, now has more than 354 stores in 46 cities and employs more than 4,000 people. According to Dash, the company has seen better traction in smaller cities like Siliguri, Guwahati and Raipur  compared to major metros. Also, the coffees sold by Tata Starbucks in India are all sourced from the country, Dash said. “Coffee penetration in India will increase from 16% to 36% in the next 10 years, close to China’s current level”.  

Global trends 

  Commenting on  global coffee trends, Dash said that the share of 18-24-year-olds in the consumption of specialty coffee was 32.7 percent in 2022, and the share of the 25-39 age group was 12.7 percent. “The demand for certified coffee is increasing due to awareness and social concern. According to him, the rise of iced coffee is also influenced by climatic conditions, lifestyle preferences and innovations. Starbucks sources approximately three percent of the Arabica produced worldwide from more than 30 countries and more than 4 million farmers. Starbucks will not buy coffee unless it meets  criteria for quality, financial transparency, environmental management and social responsibility.

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