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Blue Tokai: Homegrown coffee brand ‘brewing freshness’

Homegrown coffee brands are reinventing the beverage by showing the customers where their coffee comes from, roasting the beans with care, and making high-quality coffee more accessible

Blue Tokai: Homegrown coffee brand ‘brewing freshness’
While many start-ups that took flight at the brink of the pandemic failed to workout, coffee is what seemingly kept everyone going.For instance, Savorworks Roasters, a bean-to-bar and bean-to-cup concept café that started early this year only grew in size.

When Blue Tokai started as a small roastery in New Delhi in 2013, there were hardly any homegrown coffee brands offering the brew beyond what café chains such as Barista, Café Coffee Day, Starbucks, or Costa Coffee were selling. No doubt these outlets were extremely popular, but a section of the coffee-loving populace wanted more than just a cup of latte or cappuccino. Enter Blue Tokai. By showing its customers where their coffee came from, roasting the beans with care, and making high-quality coffee more accessible, the company fascinated them and has since gained a loyal fan base and growing.

“We closely work with over 40 Indian coffee growers across the country. We started online and in 2015, we decided to open our first cafe as an experience centre to give our customers a glimpse of the world of speciality coffee,” says Shivam Shahi, co-founder, and COO of Blue Tokai Coffee Roasters. Until then, he says, customers in India hadn’t seen a roastery or a cup of specialty coffee being brewed and that added to the instant popularity of Blue Tokai.

Since then, there has been no looking back.Currently, Blue Tokai has three roasteries and over 50 physical outlets. “In the next 2-3 years, we plan to expand our offline presence to 120-150 cafes and enter newer cities.We are also ready to mark our offline presence in Japan and enter newer markets in the coming years. With ready-to-drink and easy-to-brew offerings, we entered the FMCG segment in the second half of 2021 and in the coming months, we will build this segment further,” adds Shahi.

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Blue Tokai was one of the earliest entrants offering locally sourced and speciality coffee in India, a space that has now seen several other indigenous brands taking off and finding a strong consumer base, some even competing with international chains. These brands are cashing in on the popularity of the bean-to-cup movement and aiming to offer some of the finest and freshest beans directly from the estates.

According to a report titled ‘India Coffee Market: Industry Analysis and Forecast (2021-2027) by Source, Type, Process, and Region’ by market research firm Stellar Market Research, globally, the coffee market has grown steadily by 2.5 to 3% year-on-year, but the growth rate is much faster in India with a 10.15% year-on-year. The report suggests that the consumption and popularity grew during Covid, with the closure of cafes and hotels.

“We have witnessed the customer base for speciality coffee grow manifold over the years, giving scope to more players to experiment and grow. We feel that there’s space for everyone to flourish and create a differentiator for themselves,” says Shahi of Blue Tokai. The brand’s post-lockdown offline recovery witnessed almost 2x growth, with an increasing number of customers willing to experiment. Hence, 21 new physical outlets were opened in FY22 to cater to the demand, taking the companys’ overall count to over 50.

Similarly, social entrepreneur Manoj Kumar turned the GI-tagged coffee from the Araku Valley in Andhra Pradesh into a brand, Araku Coffee, in 2021.The iron-rich soil of the valley along with its high-altitude weather of warm days and cool nights makes the area ideal for the crop. India’s growing coffee business led them to choose the market for their first store, the company adds.

Fig at Malcha, a recently-opened café in the national capital, is another testimony to the fact that farm-to-cup coffee culture is picking up and brands are leveraging the opportunity.

Manish Yadav, founder of Fig, shares, “We aspire to stimulate a sophisticated and social coffee culture in the capital. Every cup of coffee at Fig can be traced back to the farmer. Our goal is to brew outstanding coffee while supporting livelihoods, practicing sustainable agriculture, and making the value of Indian coffees recognised.”

B2B coffee brands that have been sourcing their own coffee too are thriving in the competitive market. Rahul Aggarwal, founder of Coffeeza, which caters to at-home coffee consumption, says that compared to FY 20-21, they grew by 130% in FY 21-22. The brand, too, works with speciality coffee plantations in the country to source coffee beans.

While many start-ups that took flight at the brink of the pandemic failed to workout, coffee is what seemingly kept everyone going.For instance, Savorworks Roasters, a bean-to-bar and bean-to-cup concept café that started early this year only grew in size.

“Pandemic has been a boon to us. We actually started during the beginning of pandemic and delivering coffees door to door during pandemic helped us gain some loyal followers. We are witnessing great growth year on year as we are doubling our revenues every year and have been a profitable venture. We plan to open more retail outlets very soon in near future and also expand our coffee and chocolate business through collaborations,” say Baninder Singh and Paweena Withyasathien, co-founders Savorworks Roasters, who source their coffee from Yercaud in Tamil Nadu and Chikmagalur in Karnataka.

The famous Indian filter coffee is also going places, thanks to Bhava Coffee, which sources coffee from farmers and Baarbara estate in Chikmagalur. “We observed that no matter how many different types of brewing methods come up the demand for Indian filter coffee always exists. That is why we at Bhava Coffee have developed a blend that caters to different coffee tastes based on the requirement of a coffee lover,” says Bharat Balakrishna, founder of the brand.

As for Roastery Coffee House, their brand reached a wider consumer base during the lockdown. Nishant Sinha, founder of Roastery Coffee House that has cafes in five Indian cities like Hyderabad, Kolkata, Noida, and are building more, says, “With cafés closed, patrons had no choice but to brew coffee at home. This is when they read about our coffees. We sell at least three times more coffee than pre-pandemic period. Indian coffee is delicious, it has signature characteristics, yet as Indians, we are only starting to embrace our coffee. We source India’s best beans from farms down south in Chikmagalur, and even Koraput hills of Odisha.” Sinha says that they plan to make coffee available everywhere in India, much like a good cup of tea.

Storm in a coffee cup

The flourishing coffee market in India has undoubtedly created a safe space for Indian brands to bring local homegrown coffee into mainstream. But on the other hand, the question remains: does this make the coffee space competitive in India for international brands?

In August this year, Canadian multinational fast food restaurant chain Tim Hortons officially entered the Indian market with its first two locations in Gurugram and Saket. It made sure to incorporate Indian snacks in its menu. Tim Hortons India CEO Navin Gurnaney reportedly said that they plan to launch 120 stores in the first three years and 20 stores by August 2023. Another coffee major Pret A Manger entered the Indian market with Reliance Brands (RBL) as its strategic partner this year in July.

International coffee chains have existed in the country with a major dominance and enjoy popularity. However, to cater to an evolving audience, menus are being localised to suit the Indian palette and newer services being launched like home deliveries of coffee. However, as the tea drinking nation smells the coffee, business for international brands has been good too.

Tata Starbucks recently launched filter coffee, masala chai and cardamom chai in select cities like Bengaluru, Gurugram, Indore and Bhopal. From fresh sandwiches to vegan food, salads and vegetarian and non-vegetarian protein boxes, the brand has introduced an array of new offerings.

Sushant Dash, CEO of Tata Starbucks, says, “We have done extremely well ever since the lockdown was lifted. In fact, we marked our highest expansion in India in FY 21-22 by opening 50 plus stores. Dine in, take away and delivery have rebounded and grown significantly. Our delivery numbers have remained high even after the lockdown. Today, delivery accounts for 13-14%, pre-covid, while it was 4-5% two years ago. We witnessed a 76% growth in revenue for 2021-22 with a sale of 636 crore which was led by higher realisation from existing stores and the new stores we added during the financial year.” Dash says that this is a sign of increased potential and growth in the industry and a sign of a healthy and flourishing market.

Rajat Agrawal, CEO of Barista, says, “Our recent launch of Chai Latte has been appreciated by our guests and gives them one more reason to engage with us.” Agrawal adds that business has recovered at a rapid pace, and they are trending above our pre-covid sales. “During the last two years we have opened 85 new stores and further strengthened our base with 326 operating outlets as on date. We are targeting to like double digit growth as we hit the peak seasons. Café chain market is growing at a healthy CAGR, and the market is maturing. We have grown well over the past few years and see a positive momentum to the future with a strong pipeline of stores,” he says.

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First published on: 09-10-2022 at 02:45:00 am