Young India to drive coffee business

Techie Arun Govind meets his girlfriend Radhika Jha five days a week, mostly over a cup of coffee. "Cafes make an ideal meeting place for youngsters who want to chat and be together," says Govind. Coffee promoters have been waiting for Radhikas and Aruns, both in their 20s, and people like them. For, cafes are increasingly becoming more than places to sip coffee. A lot many things in life and work happen over a cup these days. Amitabh Chakraborthy, who works with an MNC consulting firm, says, "The final interview for my current job was held in a coffee shop in Bangalore." A battery of global retail experts feel that "young things" mostly tech and BPO workers will drive growth of coffee consumption in India. They see it climbing from the current 69 gms per person a year. In comparison, the per capita consumption is a staggering 15 kgs in countries like Norway, Sweden, and Denmark. India has around 11 lakh software engineers and BPO executives; the average age being 27. Also, disposable income of the middle class has been growing at 20.9% since 2003. The high middle income population is growing at over 10% per annum, says a KSA Technopark study. "All these factors make India a prime destination for domestic and global retailers looking at cash rich, time poor, young, affluent, working men and women and other coffee lovers," says Barry Chi Tak Yuen, founder, Coffee & Tea Academy, Hong Kong. With India's middle class aspiring to be in sync with global culture, coffee retailers are looking at expanding their market share by offering a "total experience" which would include right coffee, food, WiFi-enabled environment, jukeboxes and live music. According to a recent study conducted by Harish Bijoor Consults, by December 2008 the country would have 1,135 organised cafes, growing at 63% per annum in terms of number of outlets. India has eight big cities, 53 towns with a one-million population and 3,410 urban agglomerations of below one-million population. It has potential to accommodate 5,000 coffee retail outlets. Colman Cuff, director (trading & operations), Starbucks Coffee Company, said, "With a large base of young working population, India will emerge as the fastest-growing coffee retail market." Starbucks is expected to enter India by December. Coffee Board has taken steps to boost coffee consumption by 50% by 2012. "We are pushing the consumption to make it part of India's consumer culture thereby giving the beverage a lifestyle status," says GV Krishna Rau, its chairman.

Courtesy: EconomicTimes
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