Millennial demand for clean label offers huge potential to Indian coffee industry: Bonafide Research

  1. For most millennials, choosing coffee is an emotional decision that goes beyond conference basic needs such as sparkle and affordability to include the social and environmental impact of how it was made.

 

  1. Coffee as a specific category has steadily gained share of total consumer spending on beverages over the last many years, but millennials are making caption in this industry. Consumers in this age group of 18 to 34 are known for wanting convenience, fresh and healthy options. Health-conscious millennials are gravitating toward healthier drink and combining exercise with hedonism when it comes to alcohol.

 

  1. According to recently published report of Bonafide Research “India Packaged Coffee & Cafe Chain Market Overview”, coffee shops & cafe market will grow at a CAGR of more than 20% over next five years. The coffee shops and cafes’ turn out to be the best locations to hangout for youngsters and are thus, preferred over other venues. These are largely frequented by the youth and it is becoming more common for young generation to spend time in cafes and restaurants with groups of friends. Whether the passion is fueled by the social aspect; the caffeine craving to make up for lack of sleep and too much time in studying, sports and late nights; the idealism of pop culture, or a thousand other possible influencing factors, millennials and teenagers are drinking more coffee every year and continually starting at a younger age.

 

  1. Millennial preference for specialty coffee extends to the workplace and in order to succeed in the coffee industry. The coffee industry has caught on to this trend, offering door-to-door delivery of a consumer’s favourite beans, or delivering a variety of new coffees each month based on their origin, type, or the consumer’s taste profile, and updating respectively. Disposable income of millennials is growing, but they aren’t spending it like their parents did on cars and clothes. Instead, they’re spending it on a better food and beverage experience such as coffee. The language millennial use and the attitude they have indicate that they are deeply connected to the coffee on an emotional level. For them coffee is not just a drink, it’s an experience. The convenience, versatility of flavour and format, and branded experience provided by coffee enable it to be positioned as a premium hot drink option among young generation, predominantly in tea- drinking market, and is expected to continue among the same generation in the future years too. One age group having a particularly meaningful impact on coffee industry is the millennials and, notwithstanding the fact they may have an eccentric view of what a ‘good for you’ product can be, they seem to know exactly what they want.

 

  1. Major companies operating in the packaged coffee & cafe chain market of India are Hindustan Unilever Limited, Nestle India Limited, TATA Coffee Limited, Carnation Hospitality Private Limited (Barista Cafe) and Coffee Day Global Limited (Cafe Coffee Day).