Coffee’s epicentre moves North as youth drive demand for premium blends

India’s coffee market is witnessing a fundamental shift, with North and West India emerging as the primary growth engines, driven by younger consumers, premiumisation and rapidly changing consumption habits, according to Raja Chakraborty, the chief marketing officer of Continental Coffee.

“Ten years ago, South India dominated coffee consumption. Today, that balance is shifting fast,” Chakraborty says. “If last year the category’s value contribution was roughly 60% South and 40% North, it is now close to 50:50, largely due to rising penetration and volume growth in non-South markets.”

For Continental Coffee, the revenue distributed between South India and non-South Indian markets currently is 65:35. The company’s strongest growth markets include North and West India, although Tamil Nadu, Karnataka, Telangana and Andhra Pradesh continue to post robust growth on a much larger base.

“Even in South India, where we already have a substantial base, growth remains extremely healthy. All our major states are delivering high double-digit expansion,” Chakraborty adds.

North vs South: Two very different coffee cultures

The Continental Coffee CMO explains that while coffee in South India continues to be a daily ritual largely consumed at home, growth in the region is now being driven by out-of-home consumption, with cities such as Hyderabad and Bengaluru witnessing an explosion of cafés and speciality coffee outlets.

In contrast, non-South markets, particularly North and West India, are seeing growth across both in-home and out-of-home consumption. According to Nielsen data cited by Chakraborty, the non-South markets are now driving both volume and value growth for the coffee category.

“In the North, coffee is highly aspirational. Young consumers are constantly seeking better products and more premium experiences, which is driving strong premiumisation in the category,” he says.

One of the biggest shifts in the North is the growing base of young consumers experimenting with coffee at home.

“There’s a rising cohort of consumers buying coffee machines, using roast-and-ground coffee and whole beans, and creating café-style drinks at home. It’s still a smaller base, but it’s expanding fast,” Chakraborty notes.

This experimentation is also reshaping cafés, with more customised and innovative menus. “Coffee is no longer just cappuccino and latte. There is massive innovation – cross-category collaborations, experimental drinks, and even beverages like espresso martinis and coffee blended with kombucha,” he adds.

Flavours, formats and Southeast Asian influence

The flavours of Indian coffee are also evolving rapidly. While hazelnut, vanilla and mocha remain popular, newer influences are entering the market.

“There is growing exposure to Southeast Asian flavours – coconut coffee, café soda, even indulgent blends like Luwak. Matcha, kombucha-infused coffee, and cold formats are all gaining ground,” the CMO said.

Coffee, he adds, is no longer restricted to being a hot beverage. “Cold coffee, ready-to-drink formats and even concentrated liquid coffee are expanding quickly. Consumers now have flexibility – they can drink it straight, mix it into an Americano, or create customised beverages at home.”

According to him, especially in the North, coffee is aspirational. Consumers are constantly seeking better products, superior experiences and more variety.

While younger consumers are driving the trend toward flavoured and milder coffees, Chakraborty cautions against generalisations.

“Some young consumers love strong, dark-roasted coffee, while others prefer smoother profiles. Black coffee consumption has also risen sharply, partly due to growing awareness around coffee’s health benefits,” he says.

The brand exports to more than 90 countries.

Marketing strategy: No celebrities, only content

Continental Coffee has chosen not to use celebrity endorsers.

“Coffee itself is the celebrity. The category is so aspirational that using celebrities would dilute the brand,” Chakraborty says.

Instead, the company follows a multi-layered influencer strategy. Premium brands like Percol work with high-end creators, while regional brands like Malgudi focus on micro-influencers for strong local connections in the South. In North India, the company collaborates extensively with food bloggers and UGC creators for its Continental Special range.

Continental Coffee is also strengthening its brand presence beyond retail through a growing slate of experiential initiatives. The company has begun actively participating in coffee raves, including India’s first Coffee Rave in collaboration with Zepto in Mumbai, along with coffee festivals, premium cultural and lifestyle events, and live coffee recipe experiences designed to immerse consumers in the brand. 

“Out-of-home is shaping in-home behaviour. Coffee is becoming a ritual for India’s new generation,” Chakraborty notes, underlining how experiential touchpoints are helping deepen long-term consumer engagement with the category.

Media investments also vary sharply by geography.

“In the South, 60–70% of our spend goes into television because TV penetration remains very high. In the North, West and East, we are 100% digital, spanning influencer marketing, performance marketing, e-commerce and quick commerce,” he says.

Quick commerce becomes the launchpad for premium

One of the biggest structural changes in the category is the role of quick commerce.

“Premium launches like our newly launched Percol perform significantly better in quick commerce than in general trade,” he explains.

The reason is clear: in non-South markets, coffee penetration is still only 25–35%, and consumption is concentrated among premium urban households – the same audience that heavily uses quick commerce.

“Our largest SKU remains the 200g pack, but sticks and sachets are now in double-digit contribution on quick commerce, a sharp jump from earlier,” Chakraborty reveals.

The brand is performing strongly across e-commerce, quick commerce and modern trade, with market shares ranging between 5% and 20% depending on the platform and region.

“In many South Indian markets, we are among the top three brands. In non-South markets, we are growing fast and strengthening our position by the day,” he says.

The road ahead

Chakraborty believes India is entering a long growth cycle for coffee. “Globally, coffee markets may have stagnated. India is just getting started. The category is likely to grow at high double-digit rates for the next 10 years or more.” 

Rather than chasing specific rankings, Chakraborty says the company’s long-term goal is to embed itself deeply into consumers’ evolving relationship with coffee.

“Our aspiration is to participate in this expanding coffee culture in every possible way – through innovation, new experiences, and a strong in-home and out-of-home presence. As the category grows, so will we,” he says.