India priority market for Costa Coffee: Global CEO Philippe Schaillee

India is among the top 10 priority markets for British coffee chain brand Costa Coffee, where it would add around 40-50 speciality coffee stores every year.

Costa Coffee, which entered India in 2005, is a subsidiary of the Coca Cola company. It operates in the country through its franchise partner Devyani International.

“We have a partner, which is committed to growth. Our plan is to open 40-50 new stores every year. If we see opportunities to do more, we will do it,” said Philippe Schaillee, global chief executive officer, Costa Coffee  at a media roundtable on Friday.

The brand opened its 150th store in India in New Delhi on Thursday.

It also announced its partnership with multiplex chain PVR-INOX. It is also banking on its partnership with the ICC Men’s World Cup to capture a bigger piece of the pie.

“The India market stands out for its potential and has become one of the top 20 markets globally. It is one of the fastest growing markets, with a compounded annual growth rate (CAGR) of 11 per cent as compared to a global market CAGR of 5 per cent,” Schaillee said.

The starting base for the acceleration of growth in the Indian coffee market has been led by the younger generation, which is increasingly shifting to specialty coffee.

“This shift is driven by the younger generation’s exposure to specialty coffee stores alongside rising disposable incomes. These stores have become hubs of exploration and experimentation,” he said.

“The population in India that is gravitating towards specialty coffee is somewhere around 20-25 million people, but every day new people are making that step with rising disposable incomes,” he added.

With its significantly smaller consumption per capita rates, the Indian market provides immense headroom for growth to brands like Costa, he explained.

“In tea drinking countries like India, the consumption per capita is limited to 20-30 cups a year as compared to the global average of 200 cups a year. India is poised to emerge among the top 10 or 15 coffee consumption markets over the next decade,” he noted.

While the brand is looking to consolidate its position in the market, it currently has no plans to expand beyond larger cities. “We want to be very disciplined in our growth. We aim to strengthen our presence across the country, with a heavy focus on major cities,” he added.

The brand sources 100 per cent of its coffee from Chikmagalur and Coorg regions in Karnataka.