Market Trends of india cafes & bars Industry
India's tea chains: A new trend for millennials that offers diverse options at lower prices
- Cafes and bars outlets held a major share of the market at 22.52% in 2022. India has more than 800 bars and clubs that provide alcohol. The younger generation has more disposable income, which has ultimately increased demand for India's pub and bar cultures. The majority of customers prefer to visit businesses that serve food and alcohol. People are drawn to the ambiance of cafes and bars, which makes it easier for customers to socialize.
- Specialty tea and coffee stalls are popular in India, with the informal sector accounting for the vast majority of them. As an alternative to the ubiquitous tea stall, branded tea chains have sprouted across Indian cities. Millennials are especially attracted to companies that offer more diverse options at lower prices than coffee chains. For instance, a cup of masala chai costs USD 0.85 at Chaayos, one of India's largest tea chain companies, while the cheapest coffee at Starbucks costs USD 1.95. Tea chains also have a larger food menu, which will likely appeal to younger adults who prefer to eat out more than older people. Targeting millennials is not surprising since almost one-third of the country’s population is in the age group, thereby promoting such establishments.
- Over 70% of consumers in India were focused on improving their overall health and immunity through dietary changes in 2021, boosting the demand for juice and smoothie bars to offer a healthy menu. The popular juice/smoothie/dessert bars in India include Jus Booster Juice, Drunken Monkey, Smoothie Factory, and The Thick Shake Factory. These bars offer a range of fresh juices, smoothies, and desserts made from natural fruits and cater to the growing demand for healthy food and beverage options.
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India's coffee market: growing demand for filter coffee and popular local dishes
- The average order value for cafes and bars is low. However, the number of orders registered per day has an impact on the growth of the market value for this segment in India. India has traditionally been a tea-drinking country, but coffee consumption has recently increased. Urban consumption accounts for approximately 73% of total volumes, and the remaining 27% account for rural consumption, particularly in South India. Tamil Nadu accounts for 60% of South Indian consumption, while Karnataka, Andhra Pradesh, and Kerala account for 25%, 10%, and 5%, respectively. Instant coffee is more popular in the North, East, and West zones than filter coffee. Occasional drinkers account for 52% of total consumption in these regions. However, in the South Zone, filter coffee consumption outnumbers instant coffee consumption.
- Since the COVID-19 outbreak in 2019, people have switched to tea as a wellness superfood. India consumed 89.24% of its total tea production during the fiscal year 2020-2021. India's consumption increased from 1,116 million kg in the previous fiscal year to 1,145 million kg in 2020-2021, reporting an increase of 2.6%. About 443 million Indian millennials spend more than USD 50 monthly on their health and wellness products, thereby promoting the growth of immunity-boosting tea containing several ayurvedic ingredients like Turmeric, Ashwagandha, Moringa, and Tulsi. This gives an upper edge to budding start-ups and even established companies that spark new trends in this segment. India’s average per capita consumption of hard liquor is the highest in the world at 13.5 liters of pure alcohol compared to 1.1 liters of pure alcohol from beer. However, the cost of alcohol in bars and pubs is driving people to consume at home, acting as a major restraint for the market.
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