It is estimated that only under 15% of the Indian coffee consumption was under the away-from-home channels in 2019
By Jai Ganesh Ramnath
It is estimated that only under 15% of the Indian coffee consumption was under the away-from-home channels in 2019. The larger share of coffees consumed in India have always been in the home channel, with traditional retail stores playing a vital role in ensuring availability and, sometimes, delivery to households. The last few months have been challenging in the face of the pandemic. An interesting trend that we are witnessing is the growth happening in e-commerce sales as well as hyper-local deliveries. Brands are experiencing high double-digit growth, thanks to the increasing dependence and patronage of e-commerce portals such as Amazon and BigBasket.
The away-from-home channels, hotels, restaurants and cafés, have been severely impacted by the ongoing pandemic. The increased awareness and trials for the food and beverage market have now resulted in a latent demand from customers, many of whom are working from home. All major coffee brands have embarked upon online sessions to impart knowledge and train millennials on how to brew coffees at home with relative ease.
Promoting the coffee culture
We are seeing brands embarking on various experiments in a bid to shift to the ‘new reality’. The possible future, anticipated by recent trends, will be determined largely by the extent to which brands and customers are exposed to the changes caused by the pandemic. In India, many café brands are looking at home-delivery models, apart from promoting takeaways. When the country and its key cities finally reopen, all industry watchers will keenly observe the shifts in demand, from sit-ins to takeaway queues, with a lot of interest.
Many café-roasters have taken to e-commerce with a vengeance, not only to offset the B2B drop, but to gain the first-mover advantage amongst coffee lovers, who can now get a wide variety of choice on e-commerce. The added benefits of having a ready insight into the ‘who’ and ‘where from’ for every single sale, offers them a chance to build their brand, one consumer at a time.
Millennials in India have been at the forefront of the coffee culture, and are very enthusiastic to try alternative coffee brewing methods at home. A recent survey conducted earlier this year found that nearly 50% of the respondents opt for a cup of coffee as the first meal of the day, and 69% of Indian millennials relate to coffee as a companion.
As we can see above, often simple innovations that have been marketed well can help build trials. It is with deep consumer understanding that a brand can go a long way in capturing a country’s imagination.
The right blend
In addition to relevance, the importance of training the baristas (coffee brew masters, in Italian) in India’s fast-changing and growing café market is very essential to ensure knowledge and consistency. Many key players in the Indian market have built coffee training centres, where barista training programmes are offered free of cost, to build this essential need in the coffee ecosystem.
What’s interesting is the demand for online sessions from the training centres. We not only have baristas and new café owners signing up, but also many home corporate clients who are taking advantage of the work-from-home scenario to build connections within their teams.
The Indian coffee industry was seeing very high single digit growth, consistently, over the last few years; with the further rise in home consumption, the industry will get back to its growth trajectory next year.
The author is MD and country head, Lavazza India
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