Costa Coffee expects India to be among its top five markets in five years: Global CEO

Philippe Schaillee, Global CEO, Costa Coffee
| Photo Credit:
SIMON D JONES

UK-based Costa Coffee aims to make India among its top five markets in the next five years leveraging on high growth rates fuelled by consumers’ growing shift to premium coffee experiences. The cafe chain, which entered India 20 years ago through its franchisee partner Devyani International, expects this strong growth momentum to continue despite macro-economic headwinds.

In a select media roundtable, Philippe Schaillee, Global CEO, Costa Coffee said, “India is among the top 20 markets in the overall coffee space and is growing at twice the rate of the global category growth rate. For Costa Coffee, India is among the top 10 markets. We believe that with our current growth rates, India can be among the top five markets in the next five years. That’s the kind of aspiration we will pursue.”

200 outlets

Coca-Cola owned-premium specialty coffee brand now operates over 200 outlets in India which include stores in airports and highways besides shop-n-shops in cinemas. Schaillee said the company continues to be committed to qualitative expansion with plans to add 40-50 new outlets every year. The brand is also looking at stepping up its presence in the food delivery channel.

Despite the urban consumption slowdown, the company is not moderating its growth outlook in India. “Globally, coffee category is growing at 5-6 per cent but in India it is growing at 10-12 per cent. We have the benefit that we are in a category that is growing rapidly in maybe an overall economic environment slowing down. I think the whole F&B retail space did see a bit of slowdown in the second half of last year. But in the first quarter of this year it seems to have accelerated again, and we’ve seen it continue in April. So at this point, we’re rather bullish on the market than concerned,” Schaillee said.

Gen Z consumers

The cafe chain is betting big on Indian consumers’ gradual shift from tea to coffee and then to premium speciality coffee driven by aspirational Gen Z consumers who are being influenced by global trends. Schaille said the company is leveraging this by offering a global product portfolio with a strong focus on local relevance.

Meanwhile, coffee as a commodity has been witnessing steep levels of inflationary trends. Schaille said the company has had to hike prices across the globe to pass on the green coffee inflation impact either directly to consumers or to franchise partners.

On the impact of the US reciprocal tariff, he said: “On a global level, the impact of tariffs on coffee retail segment is not going to be that significant. There may be some impact on green coffee. We are not very exposed to the US market. When I think about the Indian market, most of our products are locally sourced so we are not necessarily seeing an impact from that.”

Published on April 30, 2025