India Coffee Market Forecast & Opportunities 2022/2023

According to a new report by Market Research Future, the Indian coffee market is expected to grow at a compound annual rate of 6.5% between 2017 and 2022. The report cites factors such as the growing popularity of premium coffee, the rise of specialty coffee shops, and the increasing disposable incomes of consumers as key drivers of market growth.

With over half a billion people, India is the second-most populous country globally and has a rapidly growing economy. The country’s coffee culture is also on the rise, with more and more people enjoying cups of joe daily. The growing popularity of premium coffee is one of the main drivers of market growth, as consumers are increasingly willing to pay for higher-quality beans and better brewing methods.

Another factor driving the market growth is the rise of specialty coffee shops in India. These establishments are often frequented by young, urban consumers who are willing to spend more on their coffee than the average consumer. In addition, the increasing disposable incomes of consumers are also helping to drive market growth, as they have more money to spend on luxuries like premium coffee.

So far, western-style coffee chains have had limited success in India due to cultural preferences for tea.

Market size and share

The global coffee market is forecast to reach a value of USD 48.5 billion by 2022/2023, growing at a CAGR of 5.4% during the forecast period (2018-2023). The Asia-Pacific region is expected to be the fastest-growing market, with a CAGR of 6.0%. India is one of the key coffee markets in the Asia-Pacific region and is expected to grow at a CAGR of 6.8% during the forecast period.

See also  How to Find the Best Location for Your Coffee Shop

The Indian coffee market is driven by the increasing number of the working population, rising disposable incomes, and changing lifestyle patterns. The premiumization trend is also playing a major role in driving the growth of the Indian coffee market. In terms of value, roasted coffee beans held the largest market share in 2017 and are expected to retain their dominance over the forecast period. Whole bean coffee is expected to be the fastest-growing product type, with a CAGR of 7.6% during the forecast period.

The organized retail sector is the most important distribution channel for coffee in India and accounted for 62.3% in 2017. supermarkets & hypermarkets are expected to be the fastest-growing distribution

Coffee Production in India

India’s coffee production is forecast to grow in the coming years, reaching 5.6 million bags by 2021/22. This growth will be driven by an expansion in planted areas as well as yield improvements.

Planted area is expected to reach 400,000 hectares by 2021/22, up from 380,000 hectares in 2016/17. Yields are also expected to improve, reaching an average of 1,400 kilograms per hectare by 2021/22, up from 1,200 kilograms per hectare in 2016/17.

The majority of India’s coffee production is concentrated in the southern states of Karnataka, Kerala, and Tamil Nadu. These states are home to favourable growing conditions, including a suitable climate and soils. In addition, they have access to labor and infrastructure.

Karnataka is the largest coffee-producing state in India, accounting for around 46% of total production in 2016/17. Kerala and Tamil Nadu are the second-and third-largest producers, respectively, accounting for around 19% and 16% of total production.

Coffee Imports in India

The majority of coffee consumed in India is imported, with Brazil, Ethiopia, and Vietnam being the main suppliers. In 2017/18, India imported around 1.6 million 60-kilogram bags of coffee beans, worth an estimated US$847 million.

See also  How To Raise Funding To Launch A Cafe In India

With the increasing demand for coffee in India, imports are expected to continue to grow in the coming years. However, the Indian government has recently introduced a number of import duties and taxes on coffee beans in an effort to support local growers. These measures are likely to lead to a slight slowdown in the growth of imports in short to medium term.

Coffee Export in India

The export of coffee from India has been growing at a steady pace in recent years. In FY 2017, India exported around Rs 1,200 crore worth of coffee, which was an increase of Rs 200 crore from the previous year. The major destinations for Indian coffee exports are Vietnam, Germany, Italy, Belgium, and the United Arab Emirates.

The growth of the coffee industry in India is likely to have a positive impact on exports as well. With more people getting introduced to café culture and specialty coffees, there is a growing demand for high-quality Indian coffee abroad. This presents a great opportunity for Indian coffee companies to expand their footprint in the global market.

Annual Coffee Consumption in India

Coffee consumption in India is expected to grow at a compound annual rate of 5.5% between 2018 and 2023, according to Euromonitor International. This growth will be driven by continued economic development and a growing middle class with more disposable income.

Euromonitor forecasts that premiumization will also play a role in driving growth as more consumers trade up to premium coffee brands and products. Soluble/instant coffee is expected to remain the most popular type of coffee consumed in India, followed by filter/drip coffee.