The specialty coffee wave sweeping small-town India

“It’s not just about brewing a good cup of coffee but connecting with customers on a deeper level.”

It was this one thought that made Harmanpreet Singh leave his family bakery to open a specialty coffee shop in the northern Indian city of Jalandhar.

It was an unexpected decision – coffee has always been popular in southern states, traditionally served strong and frothy in a steel tumbler. But it’s still not the first choice of beverage in the vast swathes of north India, where drinking tea is an intrinsic part of the culture.

For Mr Singh, the journey began in 2021 during the Covid-19 pandemic when he saw a growing demand for specialty coffee, particularly among the city’s youth and the overseas residents who returned to the country at that time.

Recognising this shift, he moved to the southern city of Bengaluru to learn brewing techniques. “I studied everything – from the way coffee is served to the role things like decor, cutlery, music and even packaging played in the overall experience,” he said.

Three months later, Mr Singh put his learnings to test and opened Buland Café in Jalandhar.

Today, the cafe has 40 outlets across the city and has become a favourite spot for the city’s youth, who come here to relax or work over piping cups of coffee.

The beans, roasted in various blends, are sourced from the famed coffee estates of Karnataka. Mr Singh says he personally trained his staff on how to brew the perfect cuppa and take care of the coffee machine.

“It’s a thriving scene,” he says.

Mr Singh is among a crop of young entrepreneurs that are benefitting from a wave of specialty coffee consumption in small north Indian towns and cities.

India has had a vibrant cafe culture for years – but it has been largely restricted to big cities where homegrown specialty and international coffee chains dominate the market.

However, post-Covid, several tier-two cities are also seeing a boom in demand for such spaces as people embrace practices like remote working and look for new places to meet their friends and families.

Cafe owners say more Indians are now willing to pay more for coffee that’s roasted in smaller batches and customised as per their preferences.

“Clients have become more knowledgeable about the roasts and are interested in the origins of their coffee,” says Bharat Singhal, the founder of Billi Hu roasteries.

In fact, more than 44% of the Indian population now drinks coffee, a 2023 report by CRISIL, a marketing analytical company, shows.

While a lot of it comes from home consumption, the growing demand for specialty coffee in small cities plays a big part, says Bhavi Patel, a coffee consultant and dairy technologist.

Roastery owners say the growth is also evident in numbers. “Subscription based orders have surged by 50% in one year,” says Sharang Sharma, the founder of Bloom Coffee Roasters. “Customers have moved from French presses to pour-over or espresso machines, adopting more sophisticated brewing methods.”

While India is often associated with tea, it also has a long coffee-drinking history.

The culture took shape in the 1900s when Indian Coffee Houses emerged as a hangout spot for the intellectual and elite class. Housed in colonial-styled buildings, these cafes served English breakfasts with steaming hot coffee and offered a space to discuss politics and mobilise support during pivotal periods in history.

A shift occurred in the 1990s when economic reforms opened India to the world, allowing entrepreneurs to open private coffee shops frequented by young peeople, who saw it as a hip experience.

Café Coffee Day (CCD), which opened in 1996, quickly became one of India’s most popular and widespread coffee chains. At its peak, CCD boasted over 1,700 outlets, serving as a popular gathering spot for students and young adults. But mounting debt, management issues and the untimely death of its founder led to a closure of most of its outlets across India.

In 2012, the arrival of international giant Starbucks spurred the rise of homegrown specialty coffee brands like Blue Tokai Roasters, Third Wave Coffee and Subko Coffee.

Mr Singhal says that while big cities like Delhi, Jaipur, Mumbai, and Bengaluru still dominate the scene, smaller cities are quickly catching up.

However, it’s not just changing palettes that’s driving consumption. “Often it’s social media,” Mr Singh says. “People want good coffee but they also want to be in a space that’s trendy and which they can post online.”

Nishant Sinha from Lucknow city is among those who understood the trend early on.

His Roastery Coffee House offers trendy ambience, free wi-fi and cosy seating options along with an array of coffee roasts. While the beans are sourced from coffee estates in the south, the food is distinctively north Indian.

Others like Jatin Khurana in the northern city of Ludhiana are experimenting with flavours.

At his Urban Buhkkad cafe, Mr Khurana serves the “Shadi Wali Coffee [the wedding coffee]” – a wedding favourite in the 1990s, which became famous for its blend of instant coffee, milk, sugar, and a sprinkle of chocolate powder.

But instead of coffee powder, Mr Khurana uses freshly grounded beans, available in different roasts and varieties, to enhance its flavours. “The idea is to capture the essence of the beverage that many Indians grew up drinking,” he says.

It’s an exciting time to be in the business – but growth comes with its own set of challenges.

“Demand is growing, but a smaller coffee shop owners tend to cut corners, whether it’s by opting for substandard machines, serving weaker coffee shots, or hiring inexperienced baristas,” Mr Singhal says.

And running the business is not always profitable given the high price of coffee and the infrastructural costs involved in running such spaces.

When Neha Das and Nishant Ashish opened The Eden’s café in Ranchi in 2021, they wanted to create a safe and relaxed space for young students to get together in the city.

Today, their hazelnut coffee and cold brews have become a favourite of many.

“It took some time but longevity requires more than profit,” Ms Das says.

“It’s about dedication, crafting local flavours, and understanding customers, even if it means working with slim profit margins for the long haul.”