Cafe Coffee Day – Will you Date?

Expecting debt issue to resolve in a few months with improving business and favourable political dispensation in the state. Waiting for AGM too for more clarity. Negen captial covers in newsletter last week why coffee is a great business
Welcome to the high-caffeine, high-reward world of coffee business – where the smell of success is often confused with freshly ground beans.
Coffee has captured the imagination of the world and now it is India’s turn, where the old generation love their Tea, but the younger GenZ firmly prefer their coffee.
So, what makes the business of Coffee so Lucrative?
1- The Gross Margins!
It takes barely 5 rupees to create a cup of Coffee and it gets marked up to 250-300 rupees.(Thats the Game, Set & Match – in a nutshell).
And the beauty of it is that, people are very much ready to pay 250-300 bucks for Coffee.‘Tea’ has a specific problem as a business prospect, that the sasti ‘Tapri wali Chai’ tastes WAY BETTER than any fancy cafe Chai.
2- Coffee is addictive.
Coffee drinkers tend to be regular customers, buying a cup of Coffee daily or multiple times in a day.(Case in point – We have put a XTC Coffee Machine from Dwija Foods in our office and I see that our people LOVE to drink this Coffee, regularly, sometimes 3-4 cups a day).
3- Coffee is scalable
Coffee is one product where people have many options, Espresso, Cappuccino, Americano, Fraps, Artisinal Coffees, Flavoured etc – all of which cost nothing to make and sell for very high prices.So, you got great margins, addicted customers and a great number of SKUs… all one needs to do is keep expanding and keep opening more such stores.
The Indian Angle
Coffee consumption in India is WAY BELOW the Global average, and this number is increasing consistently.On average, the per capital annual coffee consumption in India is extremely low at 100 grams.The Global average was 2 Kgs in comparison, in 2019.
Basically, India’s Coffee consumption trend is staring at multiple decades of growth ahead as it catches up to the Global average, as the GenZ rises.

Ps- Did you know that the Philippines consumes a staggering 3.6 Kgs of Coffee, the highest in Asia.(Despite having such high consumption, the Philippines demand is growing 14% annually).Vietnam is second at a consumption of 1.8 kgs.As mentioned above, India is at a paltry 100 grams, its ridiculous to be honest