Market Intelligence Report: Honey & Dough
Cafe Industry in Asia Pacific
The coffee shop industry in Asia Pacific is becoming more competitive, pushing both global and local brands to rethink how they operate. Big names like Starbucks need to keep innovating and expanding into new sales channels to stay relevant, as customers are increasingly drawn to newer, more exciting brands. At the same time, fast-growing local chains like Luckin Coffee and Cotti Coffee must ensure their expansion is sustainable, keeping an eye on operational costs, choosing the right locations, and avoiding market saturation to prevent sales from overlapping between their own outlets.
One of the biggest success factors in this evolving market is strategic partnerships. By teaming up with non-coffee retailers, food service providers, and local businesses, coffee brands can reach more customers, control costs, and build a stronger presence. Economic challenges like inflation and rising ingredient costs make these partnerships even more important, helping brands reduce expenses while staying competitive.
Technology and digitalization are also playing a huge role in shaping the future of coffee shops. More businesses are adopting automated coffee vending, AI-driven personalized menus, and digital payment options like palm-scan technology to make things easier for customers and build loyalty. At the same time, coffee brands are collaborating with lifestyle spaces like pet cafés, art galleries, and fashion stores, creating unique experiences that go beyond just grabbing a coffee.
As the industry changes, so do customer expectations. People are looking for more than just affordable and good-quality coffee—they care about sustainability, local sourcing, and brands that offer memorable experiences. Coffee brands are now embracing technology, forming smart partnerships, and adapting to these evolving preferences. Consumers want eco-friendly practices, ethically sourced ingredients, and brands that connect with them on a deeper level. To stay ahead, coffee businesses must keep innovating, create great customer experiences, and use technology wisely. Those that adapt quickly will build a strong, lasting presence in the market, while others risk being left behind.
Overview of the Foodservice Industry in India
The Indian foodservice industry is undergoing rapid transformation, driven by shifting consumer preferences, digital adoption, and increased competition. The rise of food delivery services has been a major trend, with third-party delivery platforms such as Zomato and Swiggy leading the charge. Consumers are increasingly opting for online food ordering over dining out, prioritizing convenience, speed, and better discounts through membership programs and exclusive deals. Despite this shift, eat-in remains dominant for cafés and bars, as these spaces offer a unique experience that delivery services cannot replicate.
Inflation has also influenced consumer spending, leading to a cost-conscious approach in dining choices. Many customers have turned to value-driven offers, benefiting brands that provide discounted meals, limited-time offers, and bundled deals. Meanwhile, rising ingredient costs have forced foodservice brands to adjust pricing strategies, impacting consumer footfall at premium outlets while benefiting budget-friendly food chains.
India’s café industry is witnessing robust growth, driven by changing lifestyles, urbanization, and rising disposable incomes. The broader consumer foodservice market was valued at approximately USD 52 billion in 2023 and is projected to grow at a CAGR of 6.37%, reaching USD 71 billion by 2028.
Within this, the café segment has shown consistent expansion—from USD 1.5 billion in 2023 to a projected USD 2.4 billion by 2028, growing at a CAGR of 10.7%. This upward trend is driven by the increasing presence of premium coffee chains in Tier-2 and Tier-3 cities, growing coffee consumption among younger urban audiences, and rising demand for differentiated café experiences in terms of ambience, food options, and convenience. Together with the growing influence of digital ordering and delivery platforms, cafés and bars are becoming key pillars in the modern Indian foodservice landscape.