Despite facing growing competition from new players and international chains, Barista, the coffee house chain, is pushing forward with its expansion plans, according to CEO Rajat Agarwal. The company is now looking to expand beyond metro cities to drive growth. As more and more coffee giants like Tim Hortons and Tata Starbucks, as well as local coffee startups like Blue Tokai, Sleepy Owl, and Rage Coffee, are investing heavily in India’s burgeoning coffee culture, Barista remains committed to staying ahead of the competition.
The CEO of Barista has acknowledged that new players in the coffee industry have a significant amount of catching up to do. This is because Barista, which is the second-largest integrated coffee house in India with a presence in more than 100 cities, is experiencing rapid growth.
The indigenous coffee chain, which recently launched its 350th store in India in Udaipur (Rajasthan), aims to further expand its reach by opening 500 stores within the next two years.
“Now that we are already 350th, we are much above or far in terms of our number of stores presence. We have already outgrown some of the newer brands which have just come in. There is a large level of catch up which has to be done. We are also growing at a certain rapid pace with about 60-70 outlets per year,” said Agrawal.
Barista, which was founded in 2000 and was one of the first brands to introduce the Italian coffee experience to India, has been operating successfully in metro cities for over 20 years. However, the company is now seeking growth opportunities beyond these areas.
In the last two to three years, Barista has observed a significant amount of “new growth” in non-metro areas.
“The way the infrastructure is getting developed in the country and the way people are travelling, now, even non-metros people are very educated about what they are consuming and a branded product is always an aspirational value so again there is a certain cheque size which you can command even in a non-metro city which about 10 years back was something alien to you,” Agrawal explained.
According to him, there is a significant difference between the average consumption of coffee in India compared to Western countries. He also mentioned that India’s coffee culture has only recently begun to take shape in the last six to seven years, which provides ample growth opportunities for all players in the market.
Agrawal informed that the average coffee consumption of an Indian is only around “100 grams” per year, while a person in Western countries consumes an average of “12 kg” per year.
“You see the catch up which India has to do to be even closer to some of the international market dynamics, that’s where we see the huge potential for all of us to grow and the industry to evolve in the near future,” he added.