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India’s Cafes & Bars Market: A Booming Industry

The Indian cafes and bars market is poised for significant growth, with market size estimates of USD 17.54 billion in 2024 and a projection to reach USD 26.17 billion by 2029, reflecting a compound annual growth rate (CAGR) of 8.33% during the forecast period (2024-2029) according to Mordor Intelligence Report. This growth is driven by evolving consumer behaviors, changing lifestyles, and the increasing popularity of cafes and bars as social and functional spaces.

Rise of Coworking Cafes

The trend of remote work and freelancing has spurred the growth of coworking cafes. These establishments offer a blend of comfortable workspaces with food and beverage services, catering to the needs of modern professionals. In 2020, the flexible workspace leasing sector in India saw a remarkable increase, accounting for over 5.4 million square feet of space—a 43% rise from 2019. This shift has propelled cafes to become the fastest-growing segment within the market, with an anticipated CAGR of 17.06% during the forecast period.

The ambiance of cafes has become a crucial factor in attracting customers. Many cafes now feature unique and quirky themes, along with live music and entertainment, to enhance the customer experience. This focus on creating inviting and enjoyable environments is a key driver of the sector’s rapid growth.

Health-Conscious Offerings in Bars and Pubs

In the bars and pubs sub-segment, there is a noticeable trend towards healthier drinking options. With increasing awareness of health and wellness among Indian consumers, many establishments are offering low-calorie drinks, mocktails, and non-alcoholic cocktails. As of 2020, over 40% of consumers in India expressed a preference for low-calorie and low or no-alcohol drinks. This includes a demand for low-calorie alcohol, gluten-free beers, and low-calorie beers, reflecting a broader shift towards health-conscious consumption.

Specialty Coffee and Tea Shops

India’s long-standing tea and coffee culture is evolving with the rise of specialty outlets offering premium and unique blends. The emphasis on high-quality coffee, ethical sourcing, and sustainable practices has resonated with consumers, driving growth in this segment. Specialist coffee and tea shops are expected to register a CAGR of 6.95% by value during the forecast period.

Cafes and bars held a significant share of the market at 22.52% in 2022. India’s pub and bar culture is expanding, supported by the younger generation’s higher disposable income. The social aspect of cafes and bars, coupled with their appealing ambiance, makes them popular destinations for socializing. Additionally, the informal sector, particularly specialty tea and coffee stalls, remains a dominant force, with branded tea chains like Chaayos offering diverse options at competitive prices.

Health and Immunity Trends

The COVID-19 pandemic has heightened awareness of health and immunity, boosting demand for juice and smoothie bars offering healthy menus. Popular chains such as Jus Booster Juice, Drunken Monkey, and The Thick Shake Factory cater to this trend with fresh, natural products. Moreover, the consumption of immunity-boosting teas, incorporating Ayurvedic ingredients like Turmeric, Ashwagandha, Moringa, and Tulsi, has seen a rise, driven by the health-conscious millennial demographic.

Despite the promising growth, the average order value for cafes and bars remains relatively low. However, the high volume of daily orders contributes to market value growth. While India has traditionally been a tea-drinking nation, coffee consumption is increasing, particularly in urban areas. The COVID-19 pandemic also led to a surge in tea consumption, with India consuming 89.24% of its total tea production during the fiscal year 2020-2021.

India’s high per capita consumption of hard liquor poses both an opportunity and a challenge. While bars and pubs face competition from at-home consumption due to the high cost of alcohol, they continue to attract customers seeking a social environment.

The Indian cafes and bars market is on a robust growth trajectory, driven by changing consumer preferences, the rise of remote work, and increasing health consciousness. The market’s evolution reflects broader societal trends, offering ample opportunities for innovation and expansion. As cafes and bars continue to adapt to consumer demands, they are set to play an increasingly important role in India’s social and economic landscape.



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