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“We aim to reach 150 stores by March 2025”
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Monday, 13 January, 2025, 08 : 00 AM [IST]
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 Indian cafés aptly blend traditional and contemporary elements, making them the ideal hotspots for leisure or business meet-ups over great tasting food & beverages. Millennials and Gen Z are at the forefront of this shift, seeking premium coffee experiences that combine quality with creativity and connection, said Ayush Bathwal, co-founder, Third Wave Coffee, in an interaction with Nandita Vijayasimha. Excerpts:
Share some insights on the overall café scenario in India.
The café landscape in India is rapidly evolving, with urban consumers increasingly viewing cafés as social hubs rather than just coffee stops. Over the past decade, the number of coffee cafés has grown to more than 2,600, driven by changing lifestyles, rising incomes, and exposure to global trends. Moreover, cafés today are emerging as engaging community hubs, with a growing inclination towards artisanal brews and specialty offerings. Millennials and Gen Z are at the forefront of this shift, seeking premium coffee experiences that combine quality with creativity and connection.
Where does India stand in cafe business compared to other parts of the world?
India is an emerging player in the global café scene and our café culture has carved a unique identity by offering customers curated experiences marked by specialty brews and offerings. Coffee is no longer just a beverage but a means of engagement over great taste and conversations.
As the transitional shift towards coffee consumption continues, India’s cafe segment is poised for significant growth over the next few years. Indian cafés aptly blend traditional and contemporary elements, making them the ideal hotspots for leisure or business meet-ups over great tasting food & beverages. The surge of international coffee chains as well as homegrown specialty brands has further helped standardise quality and expand the cafe market. With unique experiences, artisanal coffee and local flavours being offered, the trend of a growing cafe culture in India is reflective of a growing appreciation for quality and specialty products.
What are the key emerging trends in the sector?
The food and beverage sector, particularly in quick-service restaurants (QSRs), is undergoing significant transformation as evolving consumer preferences reshape the landscape. Within this context, the coffee ecosystem is playing a crucial role in driving trends that influence both consumer expectations and industry growth.
Sustainability will remain a key focus for the coffee industry through 2025. Although considerable progress has been made in adopting sustainable practices, brands are expected to increase focus on sustainability across all stages - growing and sourcing to roasting and packaging. With climate change presenting a serious challenge to coffee production, the emphasis will increasingly be on integrating sustainable practices throughout the entire process.
Immersive café experiences will continue to grow as a prominent trend, with cafés evolving into destinations that provide more than just coffee, but a full sensory experience. Whether it’s through interactive brewing stations, live barista shows, or themed atmospheres that match specific coffee offerings, customers will seek out spaces that offer an experiential opportunity.
Additionally, innovative flavours and food pairings are gaining traction. We embrace these trends with our specialty brews and limited-edition products that resonate with seasonal spirit. This year, we delighted customers with seasonal innovations like Pistachio Latte, Choco Malt Frappe, Gulab Jamun Croissant, Tiramisu Latte, and Mocha Toffee Nut Frappe. These limited-edition offerings reflect our commitment to crafting unique experiences, giving customers more reasons to visit our cafés.
The cafe culture is competitive, what is the strategy adopted for customer engagement at your premises?
We are committed to delivering an experience that goes beyond coffee. Over the years, we have upheld our unwavering dedication to blending comfort and creativity across our cafes. Each of our cafes is specially designed to create a warm and welcoming feel for our customers. Beyond offering exceptional coffee, we emphasise on driving meaningful connections; whether through local collaborations, cultural events, or coffee appreciation workshops, our cafés serve as platforms for effective community-building. Moreover, our cafés reflect a blend of local influences and contemporary aesthetics, making them ideal spaces for socialising, working, or simply spending time with yourself over a good book & your favourite brew. These immersive experiences will continue to foster cafe environments that inspire, educate, and connect, making the act of visiting a café much more engaging and memorable.
Which are the fastest-growing offerings in your range?
Innovating on flavours and formats is a core focus area for us. Our offerings across food and beverages are thoughtfully crafted to appeal to a wide range of taste palettes - from our single-origin coffees, refreshing cold brews to delicious handcrafted sandwiches, wraps, and shareable bites. Our menu is constantly evolving to combine traditional flavours with contemporary twists, while leveraging seasonal celebrations & festive vibes. With favourites like Cappuccino, Classic Cold Coffee, Mocha Choco Chip continuing to be our bestsellers, other popular favourites are Pistachio Latte, Choco Malt Frappe, Croissants as well as our seasonal specials as Gulab Jamun Croissant, Tiramisu Latte, Mocha Toffee Nut Frappe, amongst others. Right from artisanal blends to exclusive food flavours, each product adds to the warm, fuzzy feeling that surrounds every conversation or outing with your loved ones.
And, our customers now have the opportunity to enjoy their favourite brews, and then flaunt it too. Our brand merchandise offering is witnessing increased interest; be it the traditional Brass Dabra Set, aesthetically-designed Acrylic and Metallic Sippers or our Tote bags - there’s something for every coffee-lover.
What are some of the challenges that the sector is facing? How are you navigating through these challenges?
The coffee sector is posed with challenges that affect production and pricing, primarily due to climate change and rising costs. Unpredictable weather patterns and rising temperatures are affecting global coffee yields, adding pressure on the quality and availability of beans. Concurrently, driven by supply disruptions in popular coffee varieties, global coffee prices are also surging.
We are addressing these challenges by implementing smart strategies to keep delivering high-quality coffee to our customers. With our extension brand expansion we are able to reap the benefits of economies of scale, we've been able to protect our customers from rising prices. While global coffee prices are climbing, we're hopeful that these pricing pressures would ease soon.
How receptive are PEs and VCs to this sector? Any key trends / insights to highlight? India's café culture is flourishing, driven by millennials and Gen Z who increasingly view coffee shops as social and work hubs rather than just beverage stops. With over 50% of young adults spending more time outside home and discretionary spending on dining and leisure growing, cafés are becoming integral to modern urban lifestyles. Coffee shops cater to this demand by offering artisanal brews, immersive experiences, and innovative food pairings that align with global trends. Additionally, the rising popularity of at-home brewing solutions is expanding the reach of café brands beyond physical locations. This growth, coupled with scalable business models and consumer preference for premium experiences, positions coffee shops as a strong investment opportunity in India's evolving F&B sector.
What are your expansion plans?
The coffee community in India is booming, and we're committed to being wherever our customers are. We continue to strengthen our presence across the country, strategically selecting convenient locations to engage with our expanding customer base. With the recent opening of our Mysore store, we now have more than 120 stores across the country and aim to reach 150 stores by March 2025. Our next growth phase will focus on both existing and new cities, targeting metro areas as well as emerging Tier 2 and Tier 3 markets. We are also enhancing our roastery operations to meet the rising demand for specialty coffee while ensuring consistency in quality. Additionally, we will continue tapping into the growing demand for at-home coffee consumption, that brings the joy of high-quality coffee beyond the café. This shift has transformed coffee brewing from a simple routine into a cherished ritual which is deeply personal and meaningful. Our products like the Easy Coffee Bags and Cold Brew Bags, paired with home-brewing favourites like French Presses, enable customers to bring the Third Wave experience into their own homes.
Any further insights you would like to share for your company?
We are dedicated to providing an amazing coffee experience to more and more customers, making high-quality, specialty coffee accessible, both at our cafes and on the go. Driven by innovation, love for community building, and backed by strong tech, we are geared to cater to evolving customer preferences and building lasting relationships along the way.
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