India will be among the top-five global markets for Costa Coffee in five years, the retailer’s global CEO Philippe Schaillee said on Wednesday. Schaillee is in India to mark two decades of Costa Coffee’s presence in the country.
The UK-based retailer is adding about 50 stores a year in India, where franchise partner Devyani International operates its outlets. Costa Coffee has a network of 200 stores in India and counts India among its top 20 markets.
“Today there are less than 50 million consumers who are willing to pay a premium for coffee. However, that cohort is growing massively in double digits. That is why India is an important market for us,” Schaillee said, adding that the company would focus its attention on metros as part of its expansion strategy and millennial consumers willing spend more on out-of-home consumption.“We’re increasingly entering highway petrol stations, together with Devyani International.
We are also selectively opening flagship stores in high streets and in shopping malls to grow our business,” he said, adding, “We want to play a quality game and not quantity game.”Retail experts say that Costa Coffee, which is owned by Coca-Cola, is a unique example in the domestic market, since franchise partner Devyani International is part of RJ Corp, owned by billionaire bottler Ravi Jaipuria.
Jaipuria’s Varun Beverages is the largest franchise bottler for Coca-Cola’s rival PepsiCo outside the US, counting India, Nepal and other countries in South Asia and Africa as its key markets.Schaillee also said that the retailer would maintain the current run rate of about 40-50 stores annually in India despite growing competition in coffee retail. The UK-based retailer counts competitors such as Starbucks, Tim Hortons and McDonald’s McCafes among key global competitors. Local chains such as Blue Tokai, Third Wave Coffee, and Barista are also amplifying their presence in the category.