Coffee in India

Euromonitor International
December 2020
COFFEE IN INDIA Passport i

LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2020 IMPACT ............................................................................................................................... 1
Desire for comfort and indulgence during COVID-19 lockdown increases upmarket trend ...... 1
Premiumisation trend results in growth of artisanal products and flavoured coffee launches ... 1
Foodservices hit by double-whammy of lockdown and coffee price increases ......................... 1
RECOVERY AND OPPORTUNITIES .......................................................................................... 2
Continued working from home to underpin growth of fresh and flavoured coffees ................... 2
Demand for convenience and quality to influence coffee performance in post-pandemic India 2
E-commerce and subscription services set to grow in line with convenience and
premiumisation trends............................................................................................................... 2
CATEGORY DATA ....................................................................................................................... 2
Table 1 Retail Sales of Coffee by Category: Volume 2015-2020 .............................. 2
Table 2 Retail Sales of Coffee by Category: Value 2015-2020 ................................. 3
Table 3 Retail Sales of Coffee by Category: % Volume Growth 2015-2020 ............. 3
Table 4 Retail Sales of Coffee by Category: % Value Growth 2015-2020 ................ 4
Table 5 NBO Company Shares of Coffee: % Retail Value 2016-2020 ...................... 4
Table 6 LBN Brand Shares of Coffee: % Retail Value 2017-2020 ............................ 5
Table 7 Forecast Retail Sales of Coffee by Category: Volume 2020-2025 ............... 5
Table 8 Forecast Retail Sales of Coffee by Category: Value 2020-2025 .................. 5
Table 9 Forecast Retail Sales of Coffee by Category: % Volume Growth 2020-
2025 ............................................................................................................. 6
Table 10 Forecast Retail Sales of Coffee by Category: % Value Growth 2020-
2025 ............................................................................................................. 6

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COFFEE IN INDIA
KEY DATA FINDINGS
▪ COVID-19 leads to increased interest in more upmarket coffee products in 2020
▪ In 2020 coffee sees retail value growth of 11% and retail volume growth of 7% to reach
INR57.7 billion and 75,800 tonnes respectively
▪ Coffee sees foodservice volume growth of -25% in 2020 to stand at 9,200 tonnes
▪ Hindustan Unilever Ltd consolidates leading position with value share gain to 36% in 2020
▪ Coffee set to see retail value and volume CAGRs of 10% and 7% respectively over forecast
period

2020 IMPACT

Desire for comfort and indulgence during COVID-19 lockdown increases

upmarket trend
Coffee’s retail sales improved over the course of 2020. This was due to stockpiling during the
lockdown and increased in-home consumption. The growth in retail sales offset the considerable
decline suffered by the foodservice industry as establishments were forced to close. During
lockdown, many consumers started buying equipment to brew their coffee at home, buoyed by
greater in-home consumption. There was also an increase in the number of consumers buying
products such as grinders, servers, pots, coffee filters and espresso machines. This contributed
to greater sales of fresh coffee in India despite COVID-19, as consumers sought comfort and
indulgence as they were forced to remain at home.

Premiumisation trend results in growth of artisanal products and

flavoured coffee launches
The shift towards more upmarket coffee products seen in 2020 as a result of COVID-19
continued the trend seen in previous years. Premiumisation towards the end of the review
period was driven by increased consumer interest in artisanal and gourmet coffees. There was
also growth in demand for sustainable products, as well as growing interest in monthly
subscription services supplying more upmarket coffee products. As well an expanding range of
premium coffees, companies were increasingly targeting the millennial consumer segment with
flavoured coffees, also aimed at meeting demand for indulgence. To this end, players
introduced indulgence-orientated coffees such as Sussegado Coffee, Hetal’s Homemade and
Nutrus. Hetal’s Homemade, for example, includes several flavoured instant coffee products,
including Tiramisu, Chocolate Rum, Ferrero Rondnoir, and Chocolate Mint.

Foodservices hit by double-whammy of lockdown and coffee price

increases
Low coffee production in 2020 due to pest attacks, changes in climate and a shortage of
labourers due to lockdown resulted in increased coffee prices. Furthermore, foodservice outlets
were reeling under the pressure of lockdown restrictions and consumers’ reluctance to venture
out. Under such circumstances, players needed to avoid price hikes to minimise the risk of
losing what little business they might have. However, absorbing increased coffee costs would
impact the bottom line, making the situation very difficult. The outlets that procure coffee directly

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from growers or have their own plantations (such as Café Coffee Day) should fare better than
others, but the combination of factors resulted in 2020 being a very difficult year for foodservice
players offering coffee, whilst benefitting retail sales to some degree.

RECOVERY AND OPPORTUNITIES

Continued working from home to underpin growth of fresh and flavoured

coffees
Retail sales of both fresh and instant coffee will see further growth as many consumers
continue to work from home. Many employees are set to work from home until at least March
2021, which will maintain the trend towards more upmarket products offering a sense of
indulgence seen towards the end of the review period. Players are likely to introduce a
continued variety of new flavours, and target more affluent millennials as the country’s economy
recovers. There is also likely to be an uptick in demand for coffee brewing equipment, with
concomitant growth of fresh coffee.

Demand for convenience and quality to influence coffee performance in

post-pandemic India
There are nearly 320 million millennials in India in 2020. This group offers huge potential for
increased sales of artisanal coffee in post-pandemic India. Millennials enjoy trying new flavours
and home-brewing premium fresh coffee as opposed to the cheaper, more convenient
alternative of instant coffee. This has resulted in the emergence of numerous companies selling
coffee to consumers who appreciate the subtleties of more upmarket products. Those seeking a
combination of both more premium positioning and convenience are more likely to purchase
fresh ground coffee pods, with this category expected to see the strongest performance within
coffee over the forecast period, albeit from a low base. Less affluent consumers seeking
convenience will continue to prefer instant coffee.

E-commerce and subscription services set to grow in line with

convenience and premiumisation trends
Although it remained small, the e-commerce channel saw strong growth in sales in 2020 as a
result of COVID-19. E-commerce saw increased purchases as consumers sought to avoid
bricks and mortar outlets, coupled with the growth of subscription services. New models for e-
commerce and retail sales will continue to impact coffee growth in India over the forecast period,
as consumers seek both convenience and more upmarket products. Something Brewing
launched an e-commerce marketplace offering a variety of coffee equipment in addition to
domestic and international coffee brands. The site also offers information on brewing
techniques. It aims to ride the wave of increased at-home consumption and growing interest in
more premium products. It also seeks to replicate the sense of community consumers
experience in visits to coffee houses. Meanwhile, Café Coffee Day has launched a new retail
format: Coffee Day Essentials. This aims to provide value by extending essential products
including confectionary and beverages. This will help to not only increase footfall in its outlets,
but also reduce the number of trips consumers have to make when buying essentials.

CATEGORY DATA
Table 1 Retail Sales of Coffee by Category: Volume 2015-2020

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Tonnes
2015 2016 2017 2018 2019 2020

Fresh Coffee 36,885.5 38,290.8 39,611.9 41,041.9 42,527.6 44,457.5

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 36,885.5 38,290.8 39,611.9 41,041.9 42,527.6 44,457.5
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 36,885.5 38,290.8 39,611.9 41,041.9 42,527.6 44,457.5
Ground Coffee
Instant Coffee 18,838.3 20,777.4 23,021.4 25,484.7 28,135.1 31,300.0
- Instant Standard Coffee 18,838.3 20,777.4 23,021.4 25,484.7 28,135.1 31,300.0
-- Regular Instant 18,838.1 20,777.3 23,021.2 25,484.5 28,134.8 31,299.7
Standard Coffee
-- Decaffeinated 0.2 0.2 0.2 0.2 0.2 0.3
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 55,723.8 59,068.3 62,633.3 66,526.5 70,662.7 75,757.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Retail Sales of Coffee by Category: Value 2015-2020

INR million
2015 2016 2017 2018 2019 2020

Fresh Coffee 13,205.9 14,305.2 15,167.5 16,300.0 17,331.4 18,676.0

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 13,205.9 14,305.2 15,167.5 16,300.0 17,331.4 18,676.0
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 13,205.9 14,305.2 15,167.5 16,300.0 17,331.4 18,676.0
Ground Coffee
Instant Coffee 23,416.5 25,019.6 27,722.2 31,174.3 34,632.0 38,991.5
- Instant Standard Coffee 23,416.5 25,019.6 27,722.2 31,174.3 34,632.0 38,991.5
-- Regular Instant 23,415.8 25,018.8 27,721.4 31,173.3 34,630.9 38,990.3
Standard Coffee
-- Decaffeinated 0.7 0.8 0.9 1.0 1.1 1.2
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 36,622.4 39,324.8 42,889.7 47,474.2 51,963.4 57,667.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Retail Sales of Coffee by Category: % Volume Growth 2015-2020

% volume growth
2019/20 2015-20 CAGR 2015/20 Total

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Fresh Coffee 4.5 3.8 20.5

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 4.5 3.8 20.5
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 4.5 3.8 20.5
Instant Coffee 11.2 10.7 66.2
- Instant Standard Coffee 11.2 10.7 66.2
-- Regular Instant Standard Coffee 11.2 10.7 66.2
-- Decaffeinated Instant Standard Coffee 10.6 10.3 63.3
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 7.2 6.3 36.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Retail Sales of Coffee by Category: % Value Growth 2015-2020

% current value growth

2019/20 2015-20 CAGR 2015/20 Total

Fresh Coffee 7.8 7.2 41.4

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 7.8 7.2 41.4
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 7.8 7.2 41.4
Instant Coffee 12.6 10.7 66.5
- Instant Standard Coffee 12.6 10.7 66.5
-- Regular Instant Standard Coffee 12.6 10.7 66.5
-- Decaffeinated Instant Standard Coffee 13.6 12.7 82.0
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 11.0 9.5 57.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 NBO Company Shares of Coffee: % Retail Value 2016-2020

% retail value rsp

Company 2016 2017 2018 2019 2020

Hindustan Unilever Ltd 32.0 34.0 34.6 34.7 35.6

Nestlé India Ltd 37.3 33.9 34.5 35.0 35.5
Narasu's Coffee Co 5.6 5.1 5.0 4.9 4.9
Amalgamated Bean Coffee 1.2 1.1 1.1 1.1 1.0
Trading Co Ltd
Tata Coffee Ltd 0.9 1.1 1.0 1.0 1.0
Cothas Coffee Co 0.8 0.7 0.7 0.6 0.6
Others 22.1 24.1 23.2 22.6 21.4
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

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Table 6 LBN Brand Shares of Coffee: % Retail Value 2017-2020

% retail value rsp

Brand (GBO) Company (NBO) 2017 2018 2019 2020

Bru (Unilever Group) Hindustan Unilever Ltd 34.0 34.6 34.7 35.6
Nescafé (Nestlé SA) Nestlé India Ltd 33.9 34.5 35.0 35.5
Narasu's Coffee Narasu's Coffee Co 3.9 3.8 3.7 3.6
Narasu's Narasu's Coffee Co 1.2 1.2 1.3 1.3
Coffee Day Amalgamated Bean Coffee 1.1 1.1 1.1 1.0
Trading Co Ltd
Mr Bean (Tata Tata Coffee Ltd - - - 1.0
Consumer Products
Ltd)
Cothas Coffee Cothas Coffee Co 0.7 0.7 0.6 0.6
Mr Bean (Tata Tata Coffee Ltd 1.1 1.0 1.0 -
Global Beverages Ltd)
Others Others 24.1 23.2 22.6 21.4
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Forecast Retail Sales of Coffee by Category: Volume 2020-2025

Tonnes
2020 2021 2022 2023 2024 2025

Fresh Coffee 44,457.5 46,164.6 47,948.1 49,747.5 51,622.6 53,527.5

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 44,457.5 46,164.6 47,948.1 49,747.5 51,622.6 53,527.5
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 44,457.5 46,164.6 47,948.1 49,747.5 51,622.6 53,527.5
Ground Coffee
Instant Coffee 31,300.0 34,570.1 38,203.9 42,168.1 46,414.5 51,153.4
- Instant Standard Coffee 31,300.0 34,570.1 38,203.9 42,168.1 46,414.5 51,153.4
-- Regular Instant 31,299.7 34,569.8 38,203.6 42,167.7 46,414.1 51,153.0
Standard Coffee
-- Decaffeinated 0.3 0.3 0.3 0.4 0.4 0.4
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 75,757.4 80,734.7 86,152.0 91,915.6 98,037.1 104,680.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 8 Forecast Retail Sales of Coffee by Category: Value 2020-2025

INR million
2020 2021 2022 2023 2024 2025

Fresh Coffee 18,676.0 19,129.1 19,597.6 20,054.2 20,508.8 20,965.8

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 18,676.0 19,129.1 19,597.6 20,054.2 20,508.8 20,965.8

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-- Fresh Ground Coffee - - - - - -

Pods
-- Standard Fresh 18,676.0 19,129.1 19,597.6 20,054.2 20,508.8 20,965.8
Ground Coffee
Instant Coffee 38,991.5 41,775.0 44,746.2 47,882.7 51,150.5 54,676.1
- Instant Standard Coffee 38,991.5 41,775.0 44,746.2 47,882.7 51,150.5 54,676.1
-- Regular Instant 38,990.3 41,773.7 44,744.7 47,881.1 51,148.8 54,674.3
Standard Coffee
-- Decaffeinated 1.2 1.3 1.5 1.6 1.7 1.8
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 57,667.5 60,904.1 64,343.8 67,936.9 71,659.3 75,641.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Retail Sales of Coffee by Category: % Volume Growth 2020-2025

% volume growth
2020/21 2020-25 CAGR 2020/25 Total

Fresh Coffee 3.8 3.8 20.4

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 3.8 3.8 20.4
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 3.8 3.8 20.4
Instant Coffee 10.4 10.3 63.4
- Instant Standard Coffee 10.4 10.3 63.4
-- Regular Instant Standard Coffee 10.4 10.3 63.4
-- Decaffeinated Instant Standard Coffee 9.6 9.5 57.4
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.6 6.7 38.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Retail Sales of Coffee by Category: % Value Growth 2020-2025

% constant value growth

2020/2021 2020-25 CAGR 2020/25 Total

Fresh Coffee 2.4 2.3 12.3

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 2.4 2.3 12.3
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 2.4 2.3 12.3
Instant Coffee 7.1 7.0 40.2
- Instant Standard Coffee 7.1 7.0 40.2
-- Regular Instant Standard Coffee 7.1 7.0 40.2
-- Decaffeinated Instant Standard Coffee 7.9 7.9 46.3
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -

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Coffee 5.6 5.6 31.2

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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