The small-format coffee chain said its ambitious expansion will be driven by growing demand for pre-ordering and on-the-go coffee consumption across India
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abCoffee Founder and CEO Abhijeet Anand | Photo credit: abCoffee
Mumbai-based specialty coffee chain abCoffee has outlined an ambitious goal of operating 10,000 stores across India within the next 10 years.
The small-format business currently operates 44 stores across Mumbai, Delhi, Gurugram and Noida and is seeking to reach 150 sites by the end of 2024.
In an interview with IMAGES Group, abCoffee Founder and CEO Abhijeet Anand said increasing coffee consumption across India and rising demand for on-the-go coffee experiences in the F&B industry would create opportunities for the brand to accelerate outlet expansion.
Anand also said that abCoffee’s smaller store footprint, often with limited or no seating, enables the business to save on real estate costs – currently the largest expense for Indian out-of-home businesses – and pass on savings to consumers via its affordable specialty coffee menu.
The coffee chain retails regular americanos for Rs 87 ($1.04) and cappuccinos for Rs 97 ($1.16), with larger cup sizes costing Rs 107 ($1.28) and Rs 127 ($1.52) respectively.
In comparison, premium international chain Starbucks retails small americanos and cappuccinos at Rs 278.25 ($3.33) and Rs 299.25 ($3.58) while Haryana-based Barista prices the beverages from Rs 170 ($2.04) and Rs 195 ($2.33)
Founded in 2022, abCoffee sources its coffee from farms in Chikmagalur, Karnataka. The business raised $2m in seed funding in October 2023 to accelerate outlet expansion before raising a further $3.4m in March 2024 to strengthen its supply chain and digital infrastructure to support the further roll-out of its quick-service, on-the-go concept.
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abCoffee’s significant focus on value could give the start-up a competitive edge in India’s branded coffee shop market, where many major operators have faced reduced footfall as consumer tighten their belts amid the cost of living.
Premium-focused Tata Starbucks said ‘soft’ demand last year led to ‘subdued’ like-for-like sales growth and widening losses of Rs 81 ($971,000) in the 12 months ending 31 March 2024. Costa Coffee operator Devyani International Limited (DIL) also reported a net profit decline in its most recent quarter following a ‘tough consumption year’.
Food prices have outpaced the rate of inflation in India since June 2023. Food inflation in the country rose by more than 8.3% in each of the first four months of the year, culminating in an 8.7% increase in April 2024.