India’s coffee story is quietly but decisively being rewritten. Long overshadowed by tea, coffee has moved from being an urban indulgence to a daily ritual for millions. According to the Coffee Board of India, domestic coffee consumption has more than doubled over the past decade, rising from around 84,000 tonnes in 2012 to over 180,000 tonnes in 2024, even as India remains the world’s seventh-largest producer and a major exporter. The market value of India’s coffee sector is now estimated at over Rs 50,000 crore, with organised cafés, ready-to-drink formats and premium retail driving incremental growth.
As the industry looks to 2026, a clear shift is underway: coffee is no longer just about caffeine. It is about lifestyle, identity, wellness, sustainability and experience. From café chains and digital-first brands to legacy growers and global exporters, leaders across the value chain agree that the next phase of growth will be more intentional, more premium and more complex.
From routine to personal expression
Rajat Luthra, CEO of Third Wave Coffee, believes consumer behaviour in 2026 will be fundamentally more deliberate. He says Indian coffee culture is moving away from habit-led consumption towards choices that reflect personal taste, lifestyle and values. Premiumisation, in his view, will continue, but its meaning has evolved. Consumers now define premium through craftsmanship, provenance and authenticity rather than price alone. Origin-led coffees, distinctive flavour profiles and transparent sourcing are becoming central to purchase decisions.
At the same time, functional coffee is gaining momentum. Luthra notes rising interest in protein-enriched beverages, cleaner ingredient lists and formats that combine energy with everyday nourishment. Iced and blended beverages, amplified by digital discovery and visual appeal, continue to hold cultural relevance, particularly among younger consumers.
To respond, Third Wave Coffee is accelerating insight-led innovation and storytelling, supported by its automated in-house roastery, which has expanded capacity eightfold. Luthra says this allows the brand to experiment rapidly across formats without diluting craft. Ethical sourcing, consistent roasting and regionally relevant menus, he adds, are no longer differentiators but baseline expectations, with long-term relevance coming from emotional connection rather than visibility alone.
Gen Z, Instagram and the café as a social stage
If premium coffee is becoming more intentional, it is also becoming more social. Akshay Kedia, Founder of Nothing Before Coffee, points to Gen Z and young professionals as the driving force behind coffee’s cultural acceleration. Coffee, he says, is no longer limited to work breaks; it has become central to hanging out, exploring cafés and sharing visually striking drinks online.
Nothing Before Coffee is responding with frequent limited-edition launches tied to occasions, designed to create excitement and FOMO. Kedia explains that digital engagement is equally critical, with app-based ordering, loyalty coins, referral rewards and pop-up notifications designed to keep the experience playful and interactive.
In-store, cafés are being repositioned as community hubs. Influencer meet-ups, creative workshops, run-and-rave mornings and culture-led events are turning coffee spaces into social destinations. With plans to open over 20 new stores by March 2026, the brand is betting that experience-led physical expansion, combined with digital convenience, will define relevance for the next generation of consumers.
Coffee as lifestyle, not indulgence
Ryana Kuruvilla, Head of People and Culture at Kelachandra Coffee, sees 2026 as the year coffee consumption decisively shifts from habit to lifestyle. Consumers, she says, will buy less but better, prioritising premium, traceable coffees and functional benefits, while treating sustainability as a baseline rather than an add-on.
She points to the rapid rise of functional coffee, infused with adaptogens, proteins and wellness ingredients, particularly in ready-to-drink formats suited to busy urban lives. For brands, Kuruvilla argues, the response must be holistic: elevate product quality, invest in clean-label innovation and communicate value through credible storytelling instead of discount-driven marketing.
On distribution, she expects the next 12 to 18 months to be defined by omnichannel acceleration. While offline will remain dominant, growth will increasingly come from modern retail, quick commerce and on-trade experiences. Ten-minute delivery platforms, she notes, will drive discovery and impulse purchases for RTD and premium instant coffee, while cafés will remain crucial for experimentation and specialty adoption.
Omnichannel becomes non-negotiable
This convergence of channels is echoed by Rajat Agrawal, CEO of Barista Coffee. He believes coffee consumption in 2026 will be more experiential and aligned with wellness, sustainability and personal identity. Functional variants, customisable beverages and ethically sourced beans will gain traction, especially among younger consumers.
Agrawal says distribution is moving towards a balanced ecosystem where cafés, modern trade, e-commerce and quick commerce coexist as complementary engines. Physical cafés will continue to build aspiration and engagement, while digital platforms deliver reach and frequency. He identifies home-consumption formats—capsules, brewing equipment, premium instant and RTD coffee—as the fastest-growing segments over the next 12 to 18 months.
Brands that build strong omnichannel supply chains and tailor portfolios to different consumption moments, he argues, will unlock sustainable growth rather than short-lived spikes.
Convenience, education and experience converge
Shruti Ajmera Reddy, CEO of BeWild by Beforest, frames the coming shift around three forces: convenience, education and experience. While premiumisation continues, she notes that convenience-led formats such as RTD coffee and easy-to-brew solutions are expanding access to better coffee. At the same time, workshops, tastings and community-led appreciation groups are deepening consumer understanding of origin, processing and sustainability.
Consumers, she says, are no longer just buying coffee; they are participating in a culture. Brands must therefore balance accessibility with education, grounding sustainability claims in real farm-level practices. Citing IMARC Group data, she notes that India’s RTD coffee market is projected to grow at over 10 per cent CAGR through 2028, driven by urban lifestyles.
Digitally, she expects discovery to remain dominant, particularly for premium and specialty brands, while offline spaces evolve into experiential touchpoints for storytelling and trust-building. The future, she believes, lies in hybrid models blending D2C scale with curated physical presence.
The value chain challenge: climate, cost and credibility
While consumption trends are encouraging, the coffee value chain faces structural challenges. Luthra points to climate volatility, rising input costs and global price fluctuations as growing risks to long-term supply stability. Erratic rainfall and rising temperatures are already affecting yields across key growing regions in Karnataka, Kerala and Tamil Nadu.
Third Wave Coffee, he says, has been able to navigate rising prices through scale-driven efficiencies, absorbing cost pressures without passing them on to consumers. However, he stresses that industry-wide collaboration, transparency and shared learning will be essential to build resilience.
Agrawal similarly highlights the opportunity to elevate Indian coffee globally through quality differentiation and value-added processing, while warning that climate change and price swings must be proactively managed through technology, water-efficient farming and risk-sharing models.
Samantha Kochhar, Managing Director of Blossom Kochhar Group and Founder of The Tea Room, adds that sustainability and functionality are no longer niche preferences. Consumers increasingly expect ethically sourced coffee, clean labels and low-acid or wellness-aligned blends. While value-conscious, they are willing to pay more when the premium is justified through quality and transparency.
She believes India’s opportunity lies in expanding domestic consumption while strengthening specialty exports, but stresses that farmer education, fair pricing and technology-enabled traceability will be critical to ensure inclusivity and resilience from farm to cup.
Brewing towards 2026
Taken together, these perspectives point to a sector in transition. India’s coffee industry is moving beyond volume-driven growth towards a more nuanced model built on quality, experience and trust. Cafés are becoming cultural hubs, digital platforms are shaping discovery, and at-home formats are embedding coffee into daily life.
Yet the success of this transformation will depend on how effectively brands align consumer aspirations with farm-level realities. Climate resilience, ethical sourcing and credible storytelling will determine which players earn long-term loyalty.
As 2026 approaches, India’s coffee moment appears less about chasing trends and more about building a sustainable, premium ecosystem—one that serves not just a growing market, but a more discerning one. |
