Cafe chains in India are experiencing faster growth compared to quick-service restaurants (QSR) as young, ambitious consumers increasingly prefer to socialize and spend time in cafes, even with higher menu prices.
Major chains like Tata Starbucks, Costa Coffee, and Barista have identified India as a key growth market, showing double-digit growth. Additionally, new global players such as Pret a Manger and Tim Hortons, along with specialty coffee chains like Blue Tokai, Third Wave, and Slay, are capitalizing on the thriving coffee culture.
Tim Hortons, in its first year of operations in India, has witnessed strong demand and aims to establish 120 stores by 2026. Tata Starbucks, which surpassed ₹1,000 crores in sales during the 2022–23 fiscal year, views India as a core growth market and has expanded rapidly, opening 71 new stores and reaching a total of 333 stores.
Cafe chains are attracting younger audiences by positioning themselves as social gathering places or workspaces outside the home. This trend has also benefited packaged coffee players. Nestle, for instance, sees India as one of its fastest-growing coffee markets globally, offering opportunities for growth in both in-home and out-of-home consumption.
Cafe chains have also attracted investor interest, with companies like Blue Tokai Coffee Roasters and Third Wave Coffee Roasters securing significant funding. On the other hand, the QSR industry, with a much larger estimated market size, is experiencing slower growth due to increased competitive pressure.
Many QSR chains have reported flat or declining same-store sales growth in recent quarters. The coffee cafe franchise market in India, valued at around ₹5,000 crore, is projected to grow at a rate of 8–9% per year, according to Statista Research. In contrast, the QSR industry is facing challenges in maintaining growth momentum within a market estimated at $16.72 billion (approximately ₹1.38 lakh crore) in 2023, as indicated by market research firm Research and Markets.