The rapid expansion of Asia’s coffee market has prompted different companies to try their luck to catch the locals’ taste. China, a traditionally tea-drinking country, has seen an increase in coffee consumption as two giants, Luckin Coffee and America’s Starbucks, compete for local coffee drinkers. The companies were actively planning to dominate the Indian market in 2019, although Luckin’s financial scandal in 2020 impacted those plans.
Now, however, another Western giant has set its sights on India, which has a burgeoning coffee industry.
Tim Hortons, a popular Canadian fast-food chain, has recently announced it aims to open over 300 outlets in India within five years. According to the news site, Orillia Matters “Tim Hortons is following the coffee trail of the Goliaths of the international coffee markets like U.S.-owned Starbucks and Dunkin Donuts, and Costa Coffee from the UK, which is already in India.”
India could be an attractive market. For example, the Canadian coffee industry is worth $6.2 billion, with retail sales of coffee being 3.8 billion in 2021, according to a report from the market researcher, Euromonitor. In India, the market for coffee chains (including tea as well) is forecast to cross the value of $7.38 billion by 2023.
The company planned to enter the Indian market earlier but has postponed the entry process due to the Covid-19 pandemic. Business Today reports that the Oakville based multinational fast food restaurant chain “roped the former boss of Starbucks India Navin Gurnaney and plans to own and operate the India outlets to expand its business rapidly and keep control over operations.”
In spite of Gurnaney’s insights, the company might have difficulties winning over locals, as their tastes are quite different from other markets. India, for example, frequently adds chicory to coffee in order to keep costs down.
India already boasts coffee places favoured by intellectuals and politicians given that they share tradition with their customers. These locations may also have a financial advantage in owning their stores and not having to pay rent as Tim Hortons will have to.
Tim Hortons will also have to adapt to unfamiliar coffee-drinking cultures. Journalist C.K. Meena said, “Tim Hortons’ products will be viewed as more high-end or expensive in India and thus, not in direct competition with the country’s coffee and tea vendors”. No doubt it is not Tim Horton’s intention to compete with Indian local vendors selling coffee, who may use the cheapest beans or add chicory to reduce the costs.