COFFEE IN INDIA

Euromonitor International
March 2018
COFFEE IN INDIA Passport I

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Prospects ..................................................................................................................................... 1
Coffee To Benefit From the Introduction of the Goods and Services Tax ................................. 1
Growth of Gourmet and Fresh Ground Coffee .......................................................................... 1
New Flavours Being Offered ..................................................................................................... 2
Competitive Landscape ................................................................................................................ 2
Category Witnesses the Entry of New Players With Nationwide Distribution ............................ 2
Start-ups Look To Disrupt the Category With New Unique Flavours ........................................ 2
Category Data .............................................................................................................................. 2
Table 1 Retail Sales of Coffee by Category: Volume 2012-2017 .............................. 2
Table 2 Retail Sales of Coffee by Category: Value 2012-2017 ................................. 3
Table 3 Retail Sales of Coffee by Category: % Volume Growth 2012-2017 ............. 3
Table 4 Retail Sales of Coffee by Category: % Value Growth 2012-2017 ................ 4
Table 5 NBO Company Shares of Coffee: % Retail Value 2013-2017 ...................... 4
Table 6 LBN Brand Shares of Coffee: % Retail Value 2014-2017 ............................ 4
Table 7 Forecast Retail Sales of Coffee by Category: Volume 2017-2022 ............... 5
Table 8 Forecast Retail Sales of Coffee by Category: Value 2017-2022 .................. 5
Table 9 Forecast Retail Sales of Coffee by Category: % Volume Growth 2017-
2022 ............................................................................................................. 6
Table 10 Forecast Retail Sales of Coffee by Category: % Value Growth 2017-
2022 ............................................................................................................. 6

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COFFEE IN INDIA Passport 1

COFFEE IN INDIA
HEADLINES
 In 2017 coffee records retail current value growth of 9% and volume growth of 6% to reach
sales of INR42.9 billion and 62,656 tonnes
 Category benefiting from the emergence of innovative products such as 3-in-1 coffee and a
growing coffee culture
 Foodservice volume sales rise by 9%
 Hindustan Unilever and Nestlé India together continue to account for a 50% share of volume
sales
 Over the forecast period coffee will post retail CAGRs of 7% in volume terms and 5% at
constant 2017 prices to reach sales of INR55.3 billion and 85,904 tonnes in 2022

PROSPECTS

Coffee To Benefit From the Introduction of the Goods and Services Tax
Coffee is one of the key products benefiting from the introduction of a Goods and Services
Tax (GST) in India. The tax levied on coffee now ranges between 0% and 18% based on the
level of processing. Prior to the GST, coffee in India attracted a tax rate of 26%. The new tax
structure is expected to boost sales. GST will also lead to a reduction in transportation costs for
coffee. Unprocessed coffee beans have been exempt from GST, thus helping companies to
procure coffee beans at a lower price. With fmcg companies passing the benefits of the GST on
to the end consumer, coffee is expected to become more affordable, with manufacturers
including Hindustan Unilever, Nestlé and Amalgamated Bean Coffee Trading having reduced
the prices of their coffee sold in retail outlets.
Coffee is thus expected to achieve wider penetration in third-tier cities and rural areas over
the forecast period. Furthermore, existing coffee drinkers are predicted to increase their
consumption due to the beverage’s greater affordability.

Growth of Gourmet and Fresh Ground Coffee

Over 2016/2017, India witnessed the growth of gourmet and fresh ground coffee, with
demand being driven by millennials in urban areas looking to experience different types of
coffee flavours. Various companies have introduced gourmet coffees, including Ekgaon, Just
Organik, Nutrus, Flying Squirrel, Halli Berri, The Indian Bean, Blue Tokai Coffee, Black Baza
Coffee, Seven Bean Coffee Co, Marc’s Coffee, Craft and ITC. These gourmet offerings give
consumers the opportunity to experience unique blends at home. Rising disposable incomes
and changing preferences, with consumers looking to experiment with new products, are some
of the factors supporting the growth of gourmet coffee. Furthermore, companies such as Just
Organik and Ekgaon have positioned themselves as providers of coffee supporting mental
wellbeing. Consumers’ hectic lifestyles and the rising number of stress-related health issues are
encouraging consumers to try products which claim to support both physical and mental health
and wellbeing.
Over the next few years more companies are expected to introduce gourmet coffees, with
these helping to drive growth of the wider category.

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COFFEE IN INDIA Passport 2

New Flavours Being Offered

Over 2016/2017, the category witnessed the introduction of new flavours from various
companies so as to cater for the increasing demands of millennials in particular. Most
companies extended their range of flavours by adding ingredients which are perceived as
healthy, for example offering ginger-based coffee, organic green coffee and cinnamon coffee.
Unique flavours, coupled with health benefits, are helping these products to gain wider
acceptance among consumers. Manufacturers such as Sussegado Coffee, Hetals Homemade
and Nutrus also introduced more indulgent coffee tastes, for example featuring rum, tequila, and
whisky.
Over the forecast period demand for these unique flavours is expected to increase as
consumers become more aware of them and manufacturers expand their distribution networks.

COMPETITIVE LANDSCAPE

Category Witnesses the Entry of New Players With Nationwide

Distribution
In 2017, coffee in India continued to be led by Hindustan Unilever and Nestlé India. However,
with the entry of Tata Global Beverages and ITC, the competitive landscape may well change.
Both Tata Global Beverages and ITC benefit from an extensive distribution network across
India. Apart from launching fresh ground coffee, both companies are also focusing on
introducing gourmet coffees so as to differentiate themselves.
Tata Global Beverages and ITC are expected to pose an increasing challenge to Hindustan
Unilever and Nestlé India over the forecast period as they expand their coffee distribution. They
are also likely to invest heavily in marketing and advertising to increase consumer awareness of
their brands.

Start-ups Look To Disrupt the Category With New Unique Flavours

Consumers in India are very open to trying new types of coffee. Niche products such as green
coffee are growing in popularity as consumers value their purported health benefits and unique
aromas. Coffee starts-ups are focusing on niche categories, offering new products to cater for
the needs and demands of millennials. Over 15 start-ups are currently operating in India,
offering fresh ground gourmet coffee. Demand for these products is expected to pick up as more
consumers become aware of them. These start-ups have already been successful in capturing
share in the premium coffee segment and are expected to gain further ground over the next few
years.

CATEGORY DATA
Table 1 Retail Sales of Coffee by Category: Volume 2012-2017

Tonnes
2012 2013 2014 2015 2016 2017

Fresh Coffee 32,874.5 34,181.2 35,439.2 36,885.5 38,290.8 39,592.7

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 32,874.5 34,181.2 35,439.2 36,885.5 38,290.8 39,592.7
-- Fresh Ground Coffee - - - - - -
Pods

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-- Standard Fresh 32,874.5 34,181.2 35,439.2 36,885.5 38,290.8 39,592.7

Ground Coffee
Instant Coffee 13,396.4 15,182.1 17,125.0 18,838.3 20,777.4 23,062.9
- Instant Standard Coffee 13,396.4 15,182.1 17,125.0 18,838.3 20,777.4 23,062.9
-- Regular Instant 13,396.3 15,182.0 17,124.9 18,838.1 20,777.3 23,062.7
Standard Coffee
-- Decaffeinated 0.1 0.1 0.2 0.2 0.2 0.2
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 46,270.9 49,363.3 52,564.2 55,723.8 59,068.3 62,655.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Retail Sales of Coffee by Category: Value 2012-2017

INR million
2012 2013 2014 2015 2016 2017

Fresh Coffee 9,859.2 10,939.0 12,071.0 13,205.9 14,305.2 15,160.1

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 9,859.2 10,939.0 12,071.0 13,205.9 14,305.2 15,160.1
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 9,859.2 10,939.0 12,071.0 13,205.9 14,305.2 15,160.1
Ground Coffee
Instant Coffee 14,351.9 17,348.8 20,803.4 23,416.5 25,019.6 27,772.3
- Instant Standard Coffee 14,351.9 17,348.8 20,803.4 23,416.5 25,019.6 27,772.3
-- Regular Instant 14,351.5 17,348.2 20,802.8 23,415.8 25,018.8 27,771.4
Standard Coffee
-- Decaffeinated 0.4 0.5 0.6 0.7 0.8 0.9
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 24,211.1 28,287.7 32,874.4 36,622.4 39,324.8 42,932.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Retail Sales of Coffee by Category: % Volume Growth 2012-2017

% volume growth
2016/17 2012-17 CAGR 2012/17 Total

Fresh Coffee 3.4 3.8 20.4

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 3.4 3.8 20.4
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 3.4 3.8 20.4
Instant Coffee 11.0 11.5 72.2
- Instant Standard Coffee 11.0 11.5 72.2
-- Regular Instant Standard Coffee 11.0 11.5 72.2

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COFFEE IN INDIA Passport 4

-- Decaffeinated Instant Standard Coffee 10.4 12.2 78.0

- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.1 6.3 35.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Retail Sales of Coffee by Category: % Value Growth 2012-2017

% current value growth

2016/17 2012-17 CAGR 2012/17 Total

Fresh Coffee 6.0 9.0 53.8

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 6.0 9.0 53.8
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 6.0 9.0 53.8
Instant Coffee 11.0 14.1 93.5
- Instant Standard Coffee 11.0 14.1 93.5
-- Regular Instant Standard Coffee 11.0 14.1 93.5
-- Decaffeinated Instant Standard Coffee 11.6 15.6 106.8
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 9.2 12.1 77.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 NBO Company Shares of Coffee: % Retail Value 2013-2017

% retail value rsp

Company 2013 2014 2015 2016 2017

Hindustan Unilever Ltd 30.7 31.2 30.6 32.0 34.0

Nestlé India Ltd 36.8 36.8 37.4 37.3 33.8
Narasu's Coffee Co 5.2 5.1 5.5 5.6 5.1
Amalgamated Bean Coffee 1.7 1.2 1.1 1.2 1.1
Trading Co Ltd
Tata Coffee Ltd 1.1 1.0 0.9 0.9 1.1
Cothas Coffee Co 0.8 0.8 0.9 0.8 0.7
Others 23.6 23.9 23.7 22.1 24.2
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 LBN Brand Shares of Coffee: % Retail Value 2014-2017

% retail value rsp

Brand (GBO) Company (NBO) 2014 2015 2016 2017

Bru (Unilever Group) Hindustan Unilever Ltd 31.2 30.6 32.0 34.0
Nescafé (Nestlé SA) Nestlé India Ltd 36.8 37.4 37.3 33.8
Narasu's Coffee Narasu's Coffee Co 3.5 3.9 4.1 3.9
Narasu's Narasu's Coffee Co 1.6 1.5 1.6 1.2

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COFFEE IN INDIA Passport 5

Coffee Day Amalgamated Bean Coffee 1.2 1.1 1.2 1.1

Trading Co Ltd
Mr Bean (Tata Tata Coffee Ltd 1.0 0.9 0.9 1.1
Global Beverages Ltd)
Cothas Coffee Cothas Coffee Co 0.8 0.9 0.8 0.7
Mr Bean (Tata Tea Tata Coffee Ltd - - - -
Ltd)
Others Others 23.9 23.7 22.1 24.2
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Forecast Retail Sales of Coffee by Category: Volume 2017-2022

Tonnes
2017 2018 2019 2020 2021 2022

Fresh Coffee 39,592.7 40,982.1 42,456.2 44,008.1 45,652.4 47,386.0

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 39,592.7 40,982.1 42,456.2 44,008.1 45,652.4 47,386.0
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 39,592.7 40,982.1 42,456.2 44,008.1 45,652.4 47,386.0
Ground Coffee
Instant Coffee 23,062.9 25,510.3 28,241.7 31,292.0 34,695.4 38,518.4
- Instant Standard Coffee 23,062.9 25,510.3 28,241.7 31,292.0 34,695.4 38,518.4
-- Regular Instant 23,062.7 25,510.1 28,241.4 31,291.7 34,695.1 38,518.1
Standard Coffee
-- Decaffeinated 0.2 0.2 0.2 0.3 0.3 0.3
Instant Standard Coffee
- Instant Coffee Mixes - - - - - -
-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 62,655.6 66,492.4 70,697.9 75,300.1 80,347.7 85,904.4
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 8 Forecast Retail Sales of Coffee by Category: Value 2017-2022

INR million
2017 2018 2019 2020 2021 2022

Fresh Coffee 15,160.1 15,501.1 15,843.7 16,166.5 16,437.5 16,466.8

- Fresh Coffee Beans - - - - - -
- Fresh Ground Coffee 15,160.1 15,501.1 15,843.7 16,166.5 16,437.5 16,466.8
-- Fresh Ground Coffee - - - - - -
Pods
-- Standard Fresh 15,160.1 15,501.1 15,843.7 16,166.5 16,437.5 16,466.8
Ground Coffee
Instant Coffee 27,772.3 29,719.5 31,832.5 34,131.7 36,598.3 38,846.7
- Instant Standard Coffee 27,772.3 29,719.5 31,832.5 34,131.7 36,598.3 38,846.7
-- Regular Instant 27,771.4 29,718.6 31,831.5 34,130.6 36,597.1 38,845.5
Standard Coffee
-- Decaffeinated 0.9 0.9 1.0 1.1 1.2 1.2
Instant Standard Coffee

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- Instant Coffee Mixes - - - - - -

-- Regular Instant - - - - - -
Coffee Mixes
-- Decaffeinated - - - - - -
Instant Coffee Mixes
Coffee 42,932.4 45,220.6 47,676.1 50,298.2 53,035.7 55,313.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Retail Sales of Coffee by Category: % Volume Growth 2017-2022

% volume growth
2017/18 2017-22 CAGR 2017/22 Total

Fresh Coffee 3.5 3.7 19.7

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 3.5 3.7 19.7
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 3.5 3.7 19.7
Instant Coffee 10.6 10.8 67.0
- Instant Standard Coffee 10.6 10.8 67.0
-- Regular Instant Standard Coffee 10.6 10.8 67.0
-- Decaffeinated Instant Standard Coffee 10.2 9.3 56.3
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 6.1 6.5 37.1
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Retail Sales of Coffee by Category: % Value Growth 2017-2022

% constant value growth

2017/2018 2017-22 CAGR 2017/22 Total

Fresh Coffee 2.2 1.7 8.6

- Fresh Coffee Beans - - -
- Fresh Ground Coffee 2.2 1.7 8.6
-- Fresh Ground Coffee Pods - - -
-- Standard Fresh Ground Coffee 2.2 1.7 8.6
Instant Coffee 7.0 6.9 39.9
- Instant Standard Coffee 7.0 6.9 39.9
-- Regular Instant Standard Coffee 7.0 6.9 39.9
-- Decaffeinated Instant Standard Coffee 7.7 7.4 42.6
- Instant Coffee Mixes - - -
-- Regular Instant Coffee Mixes - - -
-- Decaffeinated Instant Coffee Mixes - - -
Coffee 5.3 5.2 28.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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