Young entrepreneurs are brewing a whole new experience in the coffee cup

From Foodhall and Le Marche to Modern Bazaar and Nature’s Basket, you are likely to find their ready-to-drink cold brew
The year was 2013. Café Coffee Day had just hit 1,500 outlets in India and the world was drinking 5,500 cups of Nescafé’s instant coffee every second. Except Ashish D’Abreo was brewing his coffee at home in Bengaluru with fresh roasts from his friend Tej Thammaiah’s estate in Coorg. Their taste had a mutual agreement. So the two blissfully unaware snobs opened a coffee company and named it after a rodent that frequently visited the estate. The announcement was soon followed by a call from a deeply distraught customer.

“The guy was livid,” recalls D’Abreo. The customer was convinced that the 300-rupee coffee that he had bought from Flying Squirrel was contaminated. “He kept complaining that it wouldn't dissolve in water,” says D’Abreo. A bit of laughter follows. “And I kept trying to explain to him that it was not instant coffee.” Both the company and its customers have come a long way since. “They (customers) now call to discuss coffee strengths,” he sighs.

The year is 2019. I would tell you that the situation is very different six years later if not for this one question I heard a 40-something gentleman ask a barista who was teaching us how to make a pour over at a brewing session in Delhi. “Does the coffee go to waste after?” asked the man. “It’s like the tea you throw after boiling it,” came the reply. I took a few quick sips to hide my reaction.

Sleepy Owl’s Cold Brew
But it’s not really a surprise. In absolute numbers, even the market doesn’t seem to have acquired a lot of new coffee drinkers. Figures from the International Coffee Organisation (ICO) show that while India is the world’s seventh largest exporter, our domestic consumption has only increased from 2.3 million 60-kg bags in 2017 to 2.35 million in 2018 — a little over 2 per cent. Our per capita consumption of coffee is still around 100 gm. It’s 12 kg for Finland at the top and 4 kg for the US. We don’t feature in ICO’s top 20 coffee drinking nations.

So why does the Bengaluru-based Café Coffee Day that has 1,758 stores in 247 cities want to take it to 2,500? And how does it plan to scale up from the 200 million cups of coffee it is already selling every year? They say Starbucks only enters a market when it’s ready. The joint venture with Tata that started in 2013 now operates over 135 stores. Costa Coffee has about 70 and Barista has more than 200 stores. Where’s the wiggle room for new brands?

Roasted coffee from Flying Squirrel
“There are many cafés serving coffee. The consumer will now have to distinguish the real ones from the rest,” says Manoj Kumar, CEO of Naandi Foundation and co-founder of the award-winning Araku Coffee, the brand that had a rendezvous with Paris before it turned to the Indian market. Its plantations, which started as a livelihood project for the tribal community in the Araku Valley in Andhra Pradesh, are now producing coffee that has some of the highest cupping scores in the world. Its first Indian café, after Paris, is in the works. Araku Coffee is backed by Mahindra Group chairman Anand Mahindra and Infosys Co-founder Kris Gopalakrishnan.

It’s the third wave of coffee in India. The American coinage means that coffee has passed from the stage of mass consumption at home to leading a café boom to becoming a gourmet delight. Western consumerism has a strong influence in India but while 63 per cent Americans drink coffee every day, in India it’s only one in every 12, according to the National Sample Survey Organisation.

The British aggressively promoted tea since the 1860s, but coffee has always been looked at as an export commodity. More than 70 per cent of the coffee produced in India today is exported. So when there’s a loss of production in countries like Brazil, the global demand for Indian coffee goes up and the domestic supply suffers. 

“The year doesn’t look very good for planters,” says Praveen Kumar, who has been sourcing coffee from planters across the country for over 20 years. Both Karnataka and Kerala lost a lot of crop to excessive rainfall last year. ICO estimates Indian exports to decline by 10.2 per cent in 2019, which also means a stretched domestic supply. So there are more than a few challenges for new players, especially for self-funded smaller brands.

“A lot of young businessmen have been visiting Karnataka of late, looking to expand their business,” says Kumar. He adds that if the newer brands weather the initial phases, the domestic coffee market could see a big change in the near future.

Many of these brands are led by coffee aficionados who are pushing the idea of “farm-to-cup” at their chic cafés. They are unfazed by the task at hand, which entails not just crafting good, fresh coffee but also educating customers on how to enjoy it.

“We are traditionally a milk drinking country,” says Krittivas Dalmia, the youngest of three siblings, all in their 30s, who founded Kaffa Cerrado. The Dalmias knew exactly what they were getting into when they opened their first café in Delhi’s Chanakya, followed by one in Select Citywalk mall. They have eight now including a large, stylish new space in a monotonous part of Delhi’s Okhla Industrial Area with a giant roaster behind a glass wall.

“The idea is to give people a taste of coffee from around the world, and educating them is a big part of it,” says Dalmia, who is also a certified roaster. The naturally sweet Ethiopian pour over he makes me reveals different notes at varying temperatures — and is delicious.

Krittivas Dalmia, co-founder, Kaffa Cerrado
Dalmia says the initiation starts with busting myths around black coffee: that it’s bitter, always acidic and has a lot of caffeine. “When people start to taste the difference between two kinds of black coffee, we’ll know we are getting somewhere,” he says. The new roastery-cum-café has fewer tables and a large space for tasting events. There's also a wide selection of coffee at competitive prices paired with a limited, all-vegetarian food menu.

Most of these brands have diversified their revenue streams to cover all grounds. They are selling coffee through their own cafés and websites, at retail stores, e-commerce platforms and partnering with restaurants, co-working spaces and so on. You can try Flying Squirrel at Toast and Tonic if not at their own café, both in Bengaluru, and Kaffa Cerrado at Mamagoto or Perch in Delhi.

Matt Chitharanjan and Namrata Asthana’s Blue Tokai, which they started from Delhi in 2013, has also made quite a name. Chef Manish Mehrotra’s recently-opened Comorin in Gurugram takes pride in telling customers about the specialty roast they get from Blue Tokai. The brand has 15 cafés across Delhi and around, Mumbai, Bengaluru, Goa and Jaipur along with online and offline presence across retail channels.

Siddhant Keshav at Devan’s at Lodhi; the Blue Tokai café
Chitharanjan says that fresh coffee is fairly simple and should be more approachable. “People think that making coffee at home is difficult and expensive. We want to change that,” he says. Most brands now sell their coffee blends along with attractive brewing equipment and also teach you how to use them effectively: a traditional drip filter, a mocha pot, chemex (think Don Draper's kitchen in Mad Men) or even an AeroPress. They also host grinding, roasting and brewing sessions. 

These brands are introducing a whole new dimension to coffee and trying to demystify it as the same time. In a larger scheme of things, it’s not an independent phenomenon. People did not just suddenly wake up to the smell of fresh coffee. The trend is part of the boom we are seeing in gourmet restaurants, sustainable cafés, microbreweries, the demand for wines and single malts, and even in the new-found love for gin. The well-heeled are now well-travelled, too. And they bring back a whole new culture with them. Good coffee is more fashionable today.

Looking at the trends, it’s unlikely that you will go through the summers without trying a cold brew. Sleepy Owl is a company with a single-minded aim to nudge people away from instant coffee, while keeping the convenience intact. From Foodhall and Le Marche to Modern Bazaar and Nature’s Basket, you are likely to find their ready-to-drink cold brew boxes with taps, or those DIY brew packs and kits, almost everywhere. 

Keshav Dev at Devan’s at Lodhi; the Blue Tokai café
“We want to move people to fresh coffee but not confuse them,” says Ajai Thandi, part of the trio of friends, all in their 20s, who founded Sleepy Owl in 2016. Like Blue Tokai, the venture capitalist-funded company has been expanding rapidly. And while it has stayed away from opening cafés, Sleepy Owl has made a strong retail network. Where the founders of self-funded Flying Squirrel and Kaffa Cerrado estimate a 20 per cent year-on-year growth, Chitharanjan and Thandi claim to have doubled their revenues last year. It’s a flying start for the new wave of coffee entrepreneurs.

But as we celebrate the new, let’s not forget the purists who have been roasting and selling fresh, affordable coffee much before these brands or even their founders were born. Keshav Dev, the second generation of roasters who have been running Devan’s since 1962 in Delhi, agrees there is new interest towards fresh coffee. “It’s still (restricted to) the cafés. Most new drinkers are reluctant to experiment with it at home,” says his son, Siddhant Keshav, whose café in the space adjoining the shop is more like a try-before-you-buy coffee-only bar where you will only find cookies for munchies.

It is a busy Tuesday evening at Devan’s at Lodhi. There is a French guy sipping a tall espresso and trying to learn Hindi from a book; a frequent customer whose mother has come along to try the café con affogato (a Spanish espresso with ice cream); and a first-time visitor who seems to have just realised that he has been having flavoured milk for cold coffee all along. If you know your flat white from a cappuccino, try it with their freshly roast monsooned Malabar or Lodhi blend. Discerning drinker or uninitiated, there’s a world of coffee out there.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel