India’s food & beverages sector is going through many evolutions. Today, even commonplace drinks like tea and coffee are assuming sleek contours in India’s food & beverages landscape. This trend is influenced by high disposable incomes and increasing global awareness among a small section of our consumers, whose numbers are anything but small.
According to a study by Custom Market Insights, a market research and advisory company with offices in Austin and Pune, India’s coffee market was valued at 478 million USD in 2022 and was expected to reach 1,227.47 million USD by 2032 at a CAGR of 9.87 per cent during the forecast period 2024-2033.
According to the market research study, a major key trend observed in the Indian coffee market was increasing demand for speciality coffee. The study pointed out that as consumers become more discerning about the quality and origin of coffee, speciality coffees are expected to create significant opportunities for Indian coffee manufacturers.
The study revealed that an increasing number of specialty coffee shops that focus on high-quality beans and various brewing methods are increasing overall coffee consumption in India.
The study also reveals that the Indian coffee industry has adopted various technological innovations that promise convenience without compromising quality. For example, many coffee vending machines can be controlled with phones and machines, just like a skilled barista. These technological innovations will make coffee even better, thereby boosting coffee consumption in India.
Making Specialty Coffee Accessible
In this scenario, the demand for speciality coffees is only expected to garner more market attention in India. Enter abCoffee, whose on-the-go speciality coffee outlets are located across Mumbai, Delhi and Gurugram. They claim to brew 100 per cent speciality coffee, thoughtfully roasted to suit the Indian palate. The website of abCoffee proclaims that abCoffee has a mission to democratise speciality coffee and is dedicated to bringing India’s best-grown coffees to the people at honest prices. Their professed aims include making specialty coffee more accessible and spur local coffee hubs nationwide. The chain’s signature grab-and-go format enables customers to have a cup of freshly brewed coffee quickly and easily.
“From meticulously sourcing top-quality beans to cultivating skilld baristas and delivering superior training, our commitment to excellence ensures that each cup is filled not just with coffee but with an unwavering dedication to delight our cherished customers,” notes the abCoffee’s website. They source their coffee beans from farms in Chikmagalur, Karnataka.
The chain was founded in 2022, by Abhijeet Anand, an IIT Dhanbad alumnus with over eight years of experience at Schlumberger, a leading oil and gas multinational. The Mumbai-based abCoffee was already operating 49 outlets by March 2024. abCoffee is being projected as India’s first tech-enabled grab-and-go specialty coffee chain.
Funding Matters
In the end of September 2023, abCoffee announced an investment of 2 million USD in seed funding led by Tanglin Venture Partners. The funds were to be used to further enhance abCoffee’s tech stack, expand its product range, and make its affordable specialty coffee more accessible across Mumbai and Delhi through its retail grab and go outlets.
“This investment will enable us to accelerate our growth and bring our unique coffee experience to more neighborhoods across India. In the coming 8-12 months, we keep the same momentum of growth; ensuring people are at heart of everything and bring the abCoffee’s specialty coffees to India’s new neighborhoods,” pointed out Abhijeet Anand on the occasion.
Now more recently, in March 2024, abCoffee generated 3.4 million USD (about Rs 28.1 crore) in a series A funding round. Nexus Venture Partners led the funding round, with additional support from existing investor Tanglin Venture Partners.
abCoffee envisaged to channelise the new capital from the latest round of funding to accelerate its supply chain and technology stack, with aim to increase the accessibility and speed of its affordable specialty coffee through its retail “grab-and-go” outlets. According to a press release, the funds raised will enable abCoffee to accelerate its supply chain and technology to bring on-demand coffee beverages at lower prices in quicker time. Economic Times reported that the latest funding round for abCoffee was expected to triple the valuation of the coffee chain to about $15 million in less than six months.
“We are thrilled to partner with Nexus Venture Partners and to receive continued support from Tanglin Ventures in our mission to make specialty coffee accessible and enjoyable for everyone in India. We continue to remain extremely capital efficient, leverage supply chain optimisation and continue to innovate new products for the masses,” said Abhijeet Anand, Founder & CEO of abCoffee, regarding its latest funding.
According to Tracxn, till now abCoffee has raised a total funding of 5.7 million USD in over three rounds. Its first funding was in December 2022.
The present-day coffee market environment in India portends to impressive growth for abCoffee.
