| India

India’s Barista to invest $12m in outlet expansion

The Haryana-based coffee chain is seeking to open 150 new stores over the next
18-months as competition in India’s branded coffee shop market intensifies

Barista is seeking to expand its footprint beyond India’s largest metro cities | Photo credit: Barista

Indian coffee chain Barista will invest Rs 100 Cr ($12.1m) to fund its drive of reaching 500 stores across the country by 2025.  

Having initially announced its growth target in April 2023, CEO Rajat Agrawal told local media that investment will be required to fund expansion and that he expects Barista to reach 400 stores by the end of 2023. 

“We opened 150 outlets over the last three years. With the size growth we have seen, 500 stores is a realistic number. There are two models that we primarily work around, one is going through our network that is the company-owned stores and the second is where we look at opening franchised stores. There will be nearly 400 plus outlets in the next five to six months and in the next year and a half will open 100 more outlets. We are aligned with the targets,” he said. 

Barista is seeking to expand its footprint beyond India’s largest cities and said demand from smaller urban centres ‘has been encouraging’. The new investment will enable the coffee chain to open city highway stores and enter several tier 2 cities, which have populations between 50,000 and 100,000. 

Keen to leverage increasing coffee consumption and rising disposable income among India’s younger consumers, several domestic and international operators have outlined expansion plans in recent months. 

In January 2023, Blue Tokai Coffee Roasters raised $30m in Series B funding which it will use to open 200 new stores over the next three years. I

In May 2023 Nothing Before Coffee outlined plans to rapidly scale its café network and open more than 50 new outlets within the next 12 months. 

Additionally, Café Coffee Day’s most recent full-year results indicate it is on the path to recovery following successive years of rising debt and store closures. 

The market leader now operates 469 stores across India, 26 fewer than the previous year, but said coffee shop revenues reached Rs 869 crore ($105m) in the 12 months ended 31 March 2023, compared to Rs 149 crore ($19.3m) in 2022. 

International chains are also vying for a share of the vast Indian branded coffee shop market, with Tata-owned Starbucks also rapidly expanding its presence outside of metro cities. Tata Starbucks reached 333 stores across 41 Indian cities in its fiscal year ended March 2023, adding 71 net new stores over the period. 

Meanwhile, UK-based Costa Coffee has forecast India being 'a significant growth story’ for its global business following its strong full-year sales. The coffee chain, operated by Devyani International in India, currently operates 115 stores across the country and is expected to continue its focus on airport, highway and healthcare sites. 

Fairly recent debutants Tim Hortons and Pret A Manger also have ambitious growth plans within the Indian market. 

Canada's Tim Hortons currently operates 17 stores across the country and plans to reach 120 stores across India by 2026, while coffee and food-to-go chain Pret A Manger is seeking to open 100 outlets across India within five years following its market entry in April 2023

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