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The Little Indian Coffee Chain That’s Beating the Global Giants

  •  3 min read
  •  3,488
  • Published 31 Oct 2024
The Little Indian Coffee Chain That’s Beating the Global Giants

Back in 2013, the Indian coffee scene was a lot simpler and frankly boring. Instant coffee was the norm, and while cafés like Café Coffee Day (CCD) had become popular, they catered to the masses with no real focus on quality.

Then, Blue Tokai, a homegrown brand with big ambitions joined the party and is leading the charge in redefining how Indians experience their coffee. In 2012, when co-founder Matt Chitharanjan and his partner Namrata Asthana moved to India from the US, they noticed a lack of places serving speciality coffee.

This observation sparked the idea of launching their coffee shop chain to fill the gap and this brand wanted to give coffee lovers an experience that was uniquely Indian and undeniably world-class at the same time.

  • Top-notch sourcing: Blue Tokai works with more than 80 coffee estates across India, selecting only the best beans for their brews.

  • Freshness is everything: Every bag is stamped with its roast date, ensuring you're getting the freshest coffee possible.

  • Tailored roasts: Whether you prefer light, medium, or dark, Blue Tokai’s roasts are customised to satisfy every kind of palate.

Blue Tokai entered the market quietly and now is challenging the behemoths, and doing it with finesse.

Versus Café Coffee Day (CCD): CCD may have pioneered café culture in India, but Blue Tokai is offering something entirely different. Where CCD caters to the masses, Blue Tokai focuses on delivering a premium coffee experience.

Versus Starbucks: Starbucks brought international coffee culture to India, but Blue Tokai offers a unique connection to the land that Starbucks simply can’t replicate.

Versus Nescafe: Let’s be real for a second here. Nescafe’s instant coffee can’t stand up to freshly roasted beans. Blue Tokai’s approach to coffee is the opposite of instant!

India’s ₹4,000 crore+ coffee market is growing rapidly and Blue Tokai happens to sit at the forefront of this shift. Their online platform delivers freshly roasted coffee to customers across India with just a few clicks.

They are also expanding offline, with over 100 cafés in major cities, offering an elevated coffee experience that competes with the biggest chains in the country.

Blue Tokai’s success is backed by impressive growth. In FY23, the brand’s revenue soared by 72%, hitting ₹127.45 crore, up from ₹74 crore in FY22.

And that’s just the beginning - Blue Tokai recently raised $35 million (₹294 crore) in funding from Belgium’s Verlinvest, a firm with deep pockets and global connections also backed by AB InBev, one of the world’s largest beverage companies.

Blue Tokai’s journey has been far from smooth sailing. As the brand scales up, maintaining the high quality that defines its coffee will be crucial. Additionally, speciality coffee is still a relatively new concept in India, so educating consumers remains a big task.

Then, of course, there’s the competition. Other artisanal coffee brands like 3rd Wave Coffee Roasters and Subko Coffee are also vying for attention, pushing Blue Tokai to keep innovating.

In a country where instant coffee and international chains once ruled, Blue Tokai emerged leading a local revolution and putting Indian coffee on the map.

So the next time you brew a cup of Blue Tokai, remember - it’s Proudly Indian and it’s changing the way we drink coffee, one cup at a time.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.

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