The specialty coffee wave sweeping small-town India

“It’s not just about brewing a great cup of coffee, it’s about connecting on a deeper level with your customers.”

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

It was an unexpected decision—coffee has always been popular in the southern states, where thick, frothy coffee is traditionally served in steel glasses. But tea is still not the beverage of choice in vast areas of northern 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 growing demand for specialty coffee, especially among the city’s youth and overseas residents returning to the country at the time.

Recognizing this shift, he moved to the southern city of Bangalore to learn brewing techniques. “I looked at everything – from how the coffee is served to the décor, cutlery, music and even the role packaging plays in the overall experience,” he says.

Three months later, Mr. Singh put his learnings into practice and opened Buland Cafe in Jalandhar.

Today, the cafe has 40 branches across the city and has become a favorite hangout for the city’s young people, who come here to relax or work over a cup of coffee.

The beans are roasted in various blends and sourced from the famous coffee estates of Karnataka. Mr. Singer said he personally trains his staff on how to brew the perfect cup of coffee and how to care for the machines.

“It’s a thriving scene,” he said.

Mr. Singh is one of a group of young entrepreneurs benefiting from a wave of specialty coffee consumption in small towns and cities in northern India.

India has had a vibrant cafe culture for years, but it has been largely confined to big cities, with local specialty coffees and international coffee chains dominating the market.

However, post-COVID-19, some second-tier cities have also seen a surge in demand for such spaces as people embrace practices such as remote working and look for new places to meet friends and family.

Cafe owners say more Indians are now willing to pay more for coffee roasted in small batches and customized to their preferences.

“Customers are more knowledgeable about roasting and interested in the origins of coffee,” says Bharat Singhal, founder of Billi Hu Roastery.

In fact, a 2023 report by marketing analytics firm CRISIL revealed that more than 44% of India’s population now drinks coffee.

Bhavi Patel, a coffee consultant and dairy technologist, said growing demand for specialty coffee in smaller cities plays a major role, although a large portion of this comes from household consumption.

The bakery owner said the increase in quantity was also significant. “Subscription-based orders have surged 50% in one year,” said Sharang Sharma, founder of Bloom Coffee Roasters. “Customers have moved from French presses to pour over or espresso machines for more sophisticated brewing methods.”

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

This culture formed in the 1900s, when Indian coffeehouses became a gathering place for intellectuals and elites. Housed in colonial-style buildings, these cafes served English breakfasts and steaming cups of coffee and provided a space to discuss politics and mobilize support during key 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 people who considered it a trendy experience.

Café Coffee Day (CCD) opened in 1996 and soon became one of the most popular and widely distributed coffee chains in India. At its peak, CCD had more than 1,700 stores and was a popular gathering place for students and young people. But mounting debt, management problems and the untimely death of its founder led to the closure of most of its stores across India.

In 2012, the arrival of international giant Starbucks led to the rise of local specialty coffee brands. Blue Donghai BakeryThird Wave Coffee and Subko Coffee.

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

However, it’s not just color palette changes that are driving consumption. “Usually it’s social media,” Mr. Singer said. “People want good coffee, but they also want to be in a stylish space that they can publish online.”

Nishant Sinha from Lucknow is one of those who understood this trend early on.

His Roastery Café features a stylish atmosphere, free Wi-Fi, comfortable seating options and a range of coffee roasts. While the coffee beans come from coffee estates in the south, the food has a unique North Indian flavour.

Other restaurants, such as Jatin Khurana in the northern city of Ludhiana, are experimenting with flavors.

At his Urban Buhkad cafe, Mr. Khurana serves “Shadi Wali Coffee” [the wedding coffee]” – a 1990s wedding favorite known for its mix of instant coffee, milk, sugar and chocolate powder.

But instead of ground coffee, Mr. Khurana uses freshly ground coffee beans (which come in different roast levels and varieties) to enhance their flavor. “The idea was to capture the essence of the drink that many Indians grew up drinking,” he said.

It’s an exciting time for the industry, but growth comes with its own set of challenges.

“Demand is growing, but smaller coffee shop owners tend to cut corners, whether that’s choosing substandard machines, serving weaker coffee or hiring inexperienced baristas,” Mr Singhal said.

Considering the high price of coffee and the infrastructure costs involved in running such a space, running a business isn’t always profitable.

When Neha Das and Nishant Ashish opened The Eden Cafe in Ranchi in 2021, they wanted to create a safe and relaxing space for young students to gather in the city.

Today, their hazelnut coffee and cold brew coffee have become favorites for many.

“It took some time, but longevity requires more than just profits,” Ms. Das said.

“It’s about dedication, creating local flavor and understanding your customers, even if that means slim profit margins in the long term.”