Costa Coffee aims to place India in its global top 5 markets in five years
K N Mishra
02/May/2025

What’s covered under the Article:
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Costa Coffee's CEO envisions India becoming a top 5 global market in the next five years due to high coffee demand and expanding urban presence.
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India is currently in Costa Coffee's top 10, with over 200 outlets in 58 cities and plans to grow by 50 new stores annually through retail and hospitality.
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The brand sees success in airports, office campuses, and malls, and is banking on Gen Z's preference for specialty coffee to drive future growth.
Costa Coffee, the UK-based global coffeehouse chain owned by Coca-Cola, has ambitious plans for India’s rapidly evolving coffee market. According to its Global Chief Executive Officer Mr. Philippe Schaillee, India could become one of Costa Coffee’s top five global markets within five years, a significant leap from its current position in the top ten.
This projection is grounded in India’s double-digit growth in premium coffee consumption and increasing urbanization that is reshaping beverage habits. As more consumers transition from traditional tea to premium and specialty coffee, international players like Costa Coffee see immense opportunities for expansion. “The Indian consumer is starting to shift from tea to coffee and is increasingly moving towards premium coffee,” said Mr. Schaillee during the company's 20th anniversary celebrations in India.
Costa Coffee currently has a robust presence in India with over 200 stores across 58 cities, and it continues to add 50 new outlets annually. This growth is enabled through its franchise partnership with Devyani International, one of India’s leading quick-service restaurant (QSR) operators. Mr. Schaillee praised the collaboration, calling Devyani International a “role model in Costa’s global franchise portfolio”.
He emphasized that the company is relying heavily on both retail and hospitality segments to sustain and accelerate its momentum. Costa Coffee has particularly seen strong traction in high-footfall areas such as airports, large office campuses, premium healthcare campuses, and shopping malls. These venues, he explained, have a higher density of specialty coffee consumers who appreciate quality, convenience, and branding.
Mr. Schaillee pointed to Generation Z as a key demographic in Costa Coffee’s India growth strategy. This generation views specialty coffee as a status symbol or "badge value," which makes it essential for the brand to maintain aesthetic, experiential, and quality standards. This sentiment aligns well with Costa’s premium positioning, making India an ideal market to nurture and develop long-term customer loyalty.
Importantly, Mr. Schaillee clarified that the company is not seeking inorganic growth opportunities, such as acquiring other coffee brands. Instead, the strategy will remain organic, focused on store expansion, enhancing customer experience, and adapting to local preferences. He also downplayed the impact of global tariff issues, stating that Costa Coffee’s India operations are largely localized, with most products sourced domestically, ensuring cost efficiency and supply chain resilience.
The rapid rise in coffee culture in India—driven by urban millennials, Gen Z, professionals, and students—has created fertile ground for Costa Coffee’s expansion. India’s middle class and urban population are becoming more adventurous with their taste in beverages, seeking artisanal experiences and globally recognized brands. This trend is clearly evident in tier-1 and tier-2 cities, where cafés have become community spaces for work, meetings, and social interaction.
Costa Coffee's focus on high-quality ingredients, consistent brewing standards, and a premium in-store experience differentiates it in a competitive market that includes established players like Starbucks, Café Coffee Day, Third Wave Coffee, and Blue Tokai. Mr. Schaillee acknowledged this competition, but viewed it positively: “Competition raises awareness of specialty coffee and improves overall consumer standards.”
The brand’s presence in non-traditional venues such as hospitals and educational institutions further underlines its innovative approach to market penetration. These segments are less saturated and offer unique opportunities to connect with new consumers in settings where convenience and quality are highly valued.
Costa Coffee's India strategy is clearly aligned with broader macro trends in food and beverage consumption. With more Indians dining out, working remotely from cafés, and experimenting with flavors and formats, the company’s continued focus on premiumization, customer engagement, and operational excellence will be critical for long-term success.
Looking ahead, Costa Coffee is likely to deepen its presence in tier-2 and tier-3 cities, where aspirational consumers are increasingly seeking global brands. This regional expansion, coupled with a sharp focus on experience-driven consumption, could cement India’s position as a cornerstone market for the company’s global ambitions.
In conclusion, India’s journey from a tea-loving nation to an emerging coffee powerhouse presents a golden opportunity for Costa Coffee. With a strong partner, clear vision, and a scalable model, Costa is well-placed to transform India into one of its top five global markets by 2030. The next few years will be pivotal, not just for Costa Coffee, but for India’s premium coffee ecosystem as a whole.
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