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“Indian coffee market to reach over $4.2 bn by 2025”

Tim Hortons, a coffee brand established in 1964 in Canada, will enter India as part of an exclusive agreement with AG Café, a joint venture entity owned by Apparel Group, a global fashion and lifestyle retail conglomerate, and Gateway Partners, an emerging markets’ alternative investment manager. Navin Gurnaney, India CEO, Tim Hortons.

How many stores are planned by this year end?
Our entry in India will represent the brand’s 4th country in the Asia Pacific region, which already has over 350 stores. Our India launch will build on another successful international expansion such as China, Saudi Arabia and the UK.

Tim Hortons will open multiple stores in New Delhi this year, targeting June-July, quickly followed by Punjab and other parts of the country. For this year, we are aiming to open about 20 stores and then accelerate year 2 onwards.

Are there any plans for master franchises or more partnerships in India?

We have the master franchise, and all stores would be company-owned company-operated. We don’t intend to franchise in India; however, what we are doing is talking to several groups of people about development partnerships.

What cities is the brand targeting?
India is one of the world’s fastest-growing markets for specialty coffee retail chains. We are aiming to open over 250 outlets over the next five years. This year, we are planning on launching multiple stores in New Delhi, followed by Punjab. After north, we will come to the west and then rest of the country.

Will the brand be introducing various formats of the outlets?
Our first few stores are going to be marquee stores, but we will soon open mid-size, neighbourhood stores too. We will scale to all formats of airport, highway, kiosk, and office formats as well.

What is the USP of the brand? What potential do you see in the Indian coffee segment?
As part of the company’s heritage, legacy and commitment to excellence we will be using only 100% premium Arabica beans for our coffee offerings. Along with a great tasting coffee, we will differentiate ourselves by providing ‘Fresh Food’ in the café setup which will set us apart.

The Indian coffee market is growing at a CAGR of 8-9% year on year and is expected to reach over $4.2 billion in size by 2025, with out-of-home consumption accounting for around 20 per cent of the market. Therefore, the market is huge and there is enough room for brands to introduce their experience to their consumers. At Tim Hortons we serve 100% premium arabica beans and freshly prepared food customised to one’s preference and with this we are sure to make a place for ourselves in the Indian market.

How do you see the business opportunities in India in the segment that you cater to and what challenges do you see? What are your thoughts about the competition within this sector?
Research has shown that in the last decade or so, there has been a significant shift of consumers from commodity to specialty or premium coffee globally and in India. Like I mentioned, the Indian coffee market is expected to reach over $4.2 billion in size by 2025, with out-of-home consumption accounting for around 20 per cent of the market.

Moreover, growing popularity of spending time at cafés and coffee consumption amid the young population in urban India has resulted in further growth of coffee chains in the market. Increasing disposable income has taken away the mental barrier of individuals on spending and eating out. Thus, higher spending on a cup of coffee has outpaced the deterrent of increasing cost amid coffee chains

With companies building sub-categories and brands within their own niche sub-segments, there is enough and more space for everyone to grow and give Indians an experience of the culture and heritage that their coffee is associated with.

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