The Future of Indian Coffee

The Future of Indian Coffee

With a centuries-old history of being a coffee producer, India plays a crucial role in the production and export of coffee worldwide.

We previously explored what the beginnings of this journey looked like and how various experts came together to boost the progress of India’s coffee culture. It is also essential to understand where we are headed. 

As per reports, our coffee market was valued at $478 million in the year 2022. It is expected to grow at a CAGR of 9.87% by 2032.

What is driving this growth? And how can we further capitalise on it to increase India’s coffee influence on the world?

Segments of the Coffee Market

The coffee market is segmented based on product type (instant, whole beans, etc.), target demographic, distribution channel, and so on. 

Research conducted by the Custom Market Insights reveals that the whole bean segment dominates the market in India, closely followed by instant coffee. This marks a keen interest in fresh coffee and the willingness to splurge extra on specialised coffee products that are batch-roasted and not mass-manufactured. 

There has been a 4.66% increase in coffee consumption between 2020 and 2022. This increase will definitely see a bigger spurt of growth with the establishment of modern, innovative coffee businesses. As the purchasing power of Indians and their interest in coffee increases, the beverage becomes a part of their everyday life.

indian coffee exports

Considering the cafe culture in India, the market size of Indian cafes and bars is slated to rise to $26.17 billion by the year 2029. Stats published by the Hindu Business Line also claimed that the out-of-home consumption of coffee which grew by 5% between 2018-2023 is expected to grow by 11% by 2030. In a way, this is due to the increasing hybrid/ remote work opportunities that find the youth of India working from coffee shops in their cities. 

Innovations, Coffee Exports & World Ranking

Let’s take a look at how innovations and coffee exports are bound to shape the future of our coffee industry. 

Of all the coffee produced in India, over 70% is exported to different parts of the world with as many as 50 countries purchasing Indian coffee. Italy, Germany, and Belgium are the top importers of the coffee produced in the country.

While India doesn’t rank in the top 10 for global coffee exports yet, its coffee exports were worth $760 million in 2022, a whopping 21.3% increase from the previous year. As the value of our coffee and coffee-related products continues to increase, the value of our exports is expected to multiply in the coming years.

That said, as of 2023, India is the 8th largest coffee producer in the world, producing nearly 5 million 60 kg bags in a year.

Coming to the innovations in the coffee industry, many of you are probably already familiar with the monsooning process invented in India. It is a unique way of processing coffee beans by exposing them to monsoon winds. The whole beans commonly referred to as Monsoon Malabar are in high demand, not just in India but the world over.

In 2022, a collaboration between manufacturing company Carysil and actress Vaani Kapoor resulted in the promotion of a unique built-in coffee machine. What’s interesting about it is the pre-aroma system that enables your coffee, regardless of blend, to be as aromatic as possible.

innovations in coffee industry

With sustainability as a core focus for many new-age coffee brands in India, even innovation in packaging is crucial. Eco-friendly packaging, reducing plastic use, and reusable containers are some elements that retailers and coffee shops employ.

Scope for Growth

Once upon a time, coffee was just a morning pick-me-up; a beverage that made the hustle in the lives of the common man more manageable. 

It is in recent years, courtesy of the evolution of our coffee culture, that more Indians are becoming increasingly involved in educating themselves about coffee, developing an interest in fair trade, sustainable, and specialty coffees, and choosing to buy high-quality products. And so, suffice it to say that the fourth-wave coffee movement has taken root in India.

As the demand for these premium coffees increases, coffee farmers and manufacturers in India stand to gain more from the shift in preferences. This will naturally impact the nature of new businesses entering into the market. Coffee farmers can also price their harvest at higher rates, thereby improving their own craft and standard of living.

It was revealed in a survey by Packaged Facts that 43% of millennials and 37% of GenZ in India seek coffee-flavoured products. This means coffee brands in India can now expand their business and introduce new product lines such as energy bars, sweet treats, coffee-flavoured protein powders, and more!

Even the ready-to-drink market poses a lot of opportunities in terms of creating a range of canned coffee products.

It wouldn’t be far-fetched to say that the future of Indian coffee looks stable. Even the government provides support in the form of subsidies to coffee farmers as a way of increasing production and motivating them to improve the quality of Indian coffee.

We source our coffee from the best coffee farms in South India, and they are amongst the top 5 coffee that come out of the country. 

Experience the magic of South Indian specialty filter coffee with Malgudi Days.

Leave a comment: