Costa Coffee bets big on India’s evolving taste; targets top-five spot globally

British coffee chain Costa Coffee is betting big on India’s evolving consumer preferences, positioning the country as a future top-five market globally within the next five years, according to Global CEO Philippe Schaillee. Speaking to PTI, Schaillee said the Coca-Cola-owned brand is committed to a long-term strategy in India, where a rising cohort of millennials is increasingly willing to pay a premium for specialty coffee.

“We’re in this for the long game. It’s not about scaling fast—it’s about scaling right,” he said.

Currently, India is among Costa Coffee’s top-20 global markets. With over 200 outlets operated through its franchise partner Devyani International Ltd (DIL), the brand is expanding rapidly, opening 40 to 50 new stores annually. “If we maintain this momentum, India can be in our top-five markets within five years,” Schaillee added.

India’s growing premium coffee segment, estimated at fewer than 50 million consumers today, is expanding in double digits, creating fertile ground for brands like Costa Coffee to thrive. “That cohort is growing massively. That's why India is an important market for us,” he noted.

As Costa Coffee marks 20 years in India, the country has become the second market after the UK to adopt its new store design, featuring vibrant interiors, digital integration and flexible layouts. The company is diversifying its locations to include highway petrol stations, urban high streets and shopping malls, adapting to varied consumer behaviors.

Despite growing competition from global chains like Starbucks, McCafe, Tim Hortons and local players such as Blue Tokai, Third Wave Coffee and Café Coffee Day, Schaillee welcomed the rivalry. “We invite competition into the category. In tea-drinking countries, specialty coffee players actually accelerate the segment’s growth,” he told PTI.

According to DIL’s latest annual report, Costa Coffee’s revenue in India rose by 49% in FY24 to Rs 151.8 crore, driven by store expansion. The average daily sales per store stood at Rs 33,000, slightly down from Rs 35,000 the previous year. DIL is part of RJ Corp Ltd, which also promotes Varun Beverages Ltd, PepsiCo’s bottling partner in India.

With a clear focus on premiumisation and quality-led expansion, Costa Coffee aims to shape the next chapter of India’s café culture. “India is not just a volume market, it’s a value market,” Schaillee concluded.