Costa Coffee, the renowned British coffee chain now under the Coca-Cola umbrella, has identified India as a key “priority” market for expansion. The global CEO, Philippe Schaillee, disclosed that Costa Coffee intends to continuously augment its presence in India by introducing around 50 specialty coffee outlets each year. This strategic move is driven by the belief that India offers substantial growth potential, attributed to factors such as a growing youth demographic favouring coffee over tea and an increase in disposable income.
As part of its expansion strategy, Costa Coffee aims to extend its footprint beyond major cities, exploring opportunities in travel hubs such as airports, train stations, and office campuses with tailored offerings.
Additionally, Costa Coffee, having recently inaugurated its 150th store in India, is committed to enhancing same-store sales.
Schaillee, discussing the brand’s growth trajectory in the Indian market, expressed satisfaction with the pace of store openings and emphasized the commitment of their growth-oriented partner.
“We are looking at 40–50 stores per year,” he stated. However, he also underscored the brand’s flexibility, asserting that if circumstances demand store closures due to crises, they will act swiftly.
Costa Coffee in India operates through its franchise partner, Devyani International Ltd. (DIL), which has recently celebrated the opening of its 150th store. Notably, DIL is promoted by RJ Corp. Ltd., a prominent entity also involved in Varun Beverages Ltd. (VBL), PepsiCo’s bottling partner.
According to DIL’s latest annual report, as of March 31, 2023, the company operated 112 stores and concluded the fiscal year with revenues from operations of Rs. 101.8 crore. The average daily sales (ADS) for Costa coffee stores in India stood at Rs. 35,000 per store for FY23.
In line with its business expansion plans, DIL has recently formed a strategic agreement with leading multiplex operator PVR Inox to offer Costa Coffee’s handcrafted hot and cold beverages at select premium cinema screens.
Schaillee highlighted that India ranks among the top 20 coffee markets globally, experiencing a transition from tea to coffee consumption, particularly among the younger generation. In major metropolitan areas of traditionally tea-drinking countries, coffee consumption per capita has reached levels comparable to the US and German averages, marking a significant shift over the past decade.