The Future for India’s Chai Café Industry Is Detailed in this analysis by the India Watch

This analysis introduces with the growing demand for India’s Chai Café industry as well as the need to understand the market properly to keep a pace with the demand. In the end we have also discussed How to conduct a tea cafe feasibility study in India.

The Chai or Tea Café sector in India is set for a momentous growth. The surge is backed by growing demand for sleek & trendy spaces, where people can comfortably hangout and enjoy their favourite tea with a host of light snacking options. As per The India Watch Food & Beverage Industry market research study, organized Chai or Tea café market in India is sized at around USD 104 million (~ 890 Crores) as of FY 24.

In the overall café, bakery and smoothie bar industry in India, which is sized at USD 697 million, it is still a small share. The market is dominated by Coffee based cafes, which account for around 53% market, revenue wise. In contrast, the chai based have a smaller market share pegged at around 15%.

However, what is remarkable is that how the segment has evolved over the past decade. Tea or Chai as it is called in India is one of the most favoured drink in the country. It is estimated that India consumes 21% of the global tea.

Till a decade back, chai was largely consumed in home or roadside stalls. The concept of social tea drinking in trendy cafes were non-existent. However, it started to change with organized players such as Chayyos and Chai Points emerging in the early 2010s. These VC-backed cafes introduced the concept of serving multiple tea flavours & blends in a creative presentation across modern outlets. In few years a time, a slew of other branded players entered the segment including Tea Post, Chai Sutta Bar, MBA Chaiwala, Chai Break, Chai King, etc. Increased use of technology, growing popularity of social media, and emergence of food delivery platforms further helped the segment expand seamlessly.

Traditionally Indians mostly consume milk-based chai alongside few other variants such as black tea, lemon tea, green tea, etc. However, thanks to these modern cafes, one can now chose from hundreds of blends including Kashmiri Kahwa, Moroccan tea, Oolong tea, Herbal tea, White tea, Darjeeling tea, and much more. Similarly, there are plenty of sumptuous snacking options including sandwiches, desi snacks, burgers, Chinese, Italian, etc. to choose from.

The Future Evolution of Chai Café in India

The Indian organized tea café industry will continue to evolve with local tea shops getting replaced by more swanky and cosy cafes. Also, the market study for tea cafe chain business is quite important to understand the trends and future prospects in detail.

• Tea cafes will continue to emerge as go-to place for social hang outs, family meeting, dating, casual get togethers, business networking, etc.

• Tea cafes are cost friendly compared to coffee cafes, which will further make it emerge as a viable option and capture larger market share in future.

• Gen Z will be instrumental in driving demand for the tea café segment in India. The growing influence of Gen Z will also translate into rise in demand for functional tea products such as green tea, turmeric tea, herbal tea, etc.

• Tea cafes will also evolve from just social hangout spaces to multipurpose venues. They will do so by adding new service(s) such as free WIFI, co-working spaces, reading sections, community events, etc.

• The concept of tea would not just be limited to a leisure drink. There will be increased focus on the therapeutic and restorative qualities of tea. Thus, before opening a café get the feasibility study for a cafe project done. There will be increased demand for speciality tea aimed at weight loss, stress management, anxiety reduction, etc.

How The India Watch can Help with Feasibility & Market Study?

The India Watch is a leading market research and business feasibility advisory. We cater to a wide range of clients including business enterprises, start-ups, investment houses, etc.

Besides, numerous other sectors, we deal extensively in the F&B space including restaurants, café, food e-commerce, cloud kitchen, pizzeria, etc.

We can assist discerning business owners & investors with tailor made feasibility studies. These feasibility report can help in gaining deeper insights about the market alongside fundraise & stakeholder interaction.

Know in detail How to conduct F&B feasibility study effectively and though each feasibility studies are customized as per the requirements of clients, it broadly includes the following:

• Market size of the industry, past trends & future projections

• Market share analysis: organized vs unorganized, franchise vs company owned, beverage sales vs food sales, weekend vs. weekday footfall trends, etc.

• Key competition, capacity, USP, growth plans, etc.

• Major investments, merger & acquisitions, fund raise, etc

• Major customer segments, needs & wants, market gaps, etc.

• Customer decision making journey mapping

• Potential assessment & market scanning

• Pricing benchmarking & strategy

• Go-to market strategy

• Sales and marketing strategy

• Policy & regulatory insights, subsidies, incentives, etc.

• Location analysis (if needed)

• Addressable market size estimation

• Financial projection and plan, ROI, ratio analysis, sensitivity analysis, etc.

• SWOT analysis

• Key success factors, growth enablers, risks & challenges

• Future growth roadmap based on the overall research

So, if you are an investor or a business owner planning to start a tea café (or any other related F&B business), feel free to connect with us for feasibility and market research services for F&B business requirements. Drop us a mail at info@theindiawatch.com.

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