Coffee Talk

Coffee at Five-Star Hotels in India has always been a rather expensive affair. I have seen ridiculous prices of some USD 10 per cup of coffee. But then, we happen to be at the hotel, and the meeting needs to happen for a purpose, so why bother ? There is not much of an alternative, and even it it were there, one needs to drive out in most cases.

How about coffee shops ? In Singapore, a decent cup of coffee would cost less than USD 1.50 in most places. In the western-style coffee shops, the price could be higher, somewhere in the region of USD 2 to 3. In India, coffee prices have been raising, and the typical pricing has now crossed USD 1.50 ! With the VAT (Value Added Tax) of 12.5%, you get to pay some USD 4 for one small-sized latte and one regular-sized capuccino ! Obviously, coffee shops are able to get this kind of price realisation from a rather purely domestic market in a suburb of Mumbai – it is quite surprising. I did not see open laptops and intense business discussions at the coffee shop, so there were not many people who were looking for a place to sit down and sell insurance for example !

So, this tells me only one story and gives me only one message – India is indeed becoming upscale, and there are many, many people who can afford expensive coffees (may be they are all mostly dating where expenses do not matter !), and have the affinity towards a western-style time killer. In percentage terms, it could be a very miniscule figure of shoppers and coffee drinkers, but in the target market focused upon by these coffee shops, they indeed seem to be having a captive market full of such spenders, who do not have to hark back to those days of scarcity where you drink coffee only at home or at places which provide coffee at USD 0.25, these people are younger and are crossing the chasm of incomes which differentiated their parents from the current income levels. Well, it feels good as I have seen the coffee shops full of such people in Singapore and Hong Kong, as well as in Malaysia, and it does feel good that India has arrived with a lot more numbers to tackle – which is always a good problem to face.

Ofcourse, there are folks who just move away after looking at the prices, they will always be there in any of these markets. Upper middle class people do not really care, as they tend to go after specific tastes which could be expensive or cheap depending on their preferences. I have also seen fathers lecturing their sons at these coffee shops (never the daughters, don’t know why ?!). I have also seen wives who sit and ask their hubbies to get some “coffee” – they are invariably middle-aged.

What I hate in these coffee shops is that they call out their name – “Mr Vijay, Mr Vijay” – as though we were waiting in the Court Room waiting to be called by the bailey – and almost everyone in the shop hears the name. I take some time to react as mostly we are in some intense conversation. Our names are collected while ordering, and even if there is absolutely no crowd, the shop takes some 10 minutes to get the coffee ready and then calls out the names !

Well, I haven’t remarked on the quality of the coffees – in general, the quality is good – I believe that they should cater to local tastes rather than purely adapting the western models of coffee. Very few such upmarket shops provide the “Mysore Coffee”, or the “South Indian Coffee”.

Enjoy your Indian latte friends,


Vijay Srinivasan
28th March 2010


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