For Third Wave Coffee, the next leg of growth may hinge less on coffee and more on what accompanies it. The company on Wednesday said it is sharpening its focus on desserts as a distinct consumption occasion, launching a new in-store format, Third Rush, even as it prepares to expand its store network and push for profitability over the next year.
The dessert-first format has gone live across four Bengaluru cafes, including its Koramangala outlet, and will be scaled across the chain’s wider network of 220 cafes spread across 14-15 cities. The move is positioned as a lever to increase same-store transactions and extend store usage beyond peak coffee hours.
‘Desert is longer just an add-on food’
“Dessert is no longer just an add-on to food. It is a separate occasion — it’s very mood-driven,” Rajat Luthra, CEO of Third Wave Coffee, told Fe.
“People are now willing to travel only for desserts. Not many dessert places in India can offer a proper dining experience. They are either smaller stores with very limited seating. Here, you can bring in your friends in the evening, probably late night, and have desserts along with your family and friends.”
The menu has been developed over roughly a year through focus group discussions and internal testing. It includes six variants of Tres Leches, layered cakes, dessert stacks, tarts, pies, cheesecakes and warm baked options. Pricing has been kept competitive to drive higher throughput per store.
Third Rush to operate within existing cafe footprints
Unlike standalone dessert chains, Third Rush will operate within existing cafe footprints. This allows the company to avoid incremental rental and utility costs while leveraging its current infrastructure and supply chain. “Our fixed cost for this is already covered. It’s enjoying the same space, the same utility cost,” Luthra said, adding that the format follows the same centralised-plus-vendor production model used for the company’s food menu.
The push on desserts comes alongside a broader expansion plan. The company expects to add 100 stores in FY27, taking its total to around 320. About 70% of these will be in existing markets, with the balance in new cities. Kolkata is next on the roadmap with a targeted launch on May 15, while the chain has recently entered Ahmedabad and Agra and is evaluating Jaipur and other tier-2 markets.
Same store transaction growth
On operating metrics, Luthra said same-store transaction growth stood at 7-8% last year and has opened at similar or higher levels in April. The company expects the dessert format to add to this trajectory by increasing evening and late-night footfalls.
At the unit level, about 90% of stores are profitable, with new outlets typically reaching single-digit store-level profitability within five to six months and scaling to high double-digit margins within a year. Luthra said the company is targeting break-even at the consolidated level by mid-FY27.
According to Tracxn data, revenue rose 15% year-on-year to Rs 285.2 crore in FY25 from Rs 249 crore in FY24. Net losses narrowed 38% to Rs 94.4 crore from Rs 152.4 crore, indicating improving unit economics as the chain scales and experiments with new consumption-led formats.