Costa Coffee's India Sales Rise 30%, Profit Increases 28.4% Amid Store Expansion

Costa Coffee India's FY25 sales surge 30.76% to ₹198.5 crore, while profit rises 28.4% to ₹149.7 crore. The growth is driven by store expansion and a growing preference for premium coffee among millennials and Gen Z. However, gross margin declines marginally to 75.4% due to inflation in coffee beans and other input materials. India is seen as a high-potential market for Costa Coffee, with the potential to enter the top five global markets in five years.

Title: Costa Coffee India's FY25 Sales Surge 30.76% to ₹198.5 Crore, Profit Rises 28.4% to ₹149.7 Crore

British coffee chain brand Costa Coffee's India revenue from operations surged 30.76% to ₹198.5 crore in FY25, and its profit rose 28.4% to ₹149.7 crore. The growth was primarily driven by store expansion, with the number of outlets increasing from 179 to 220 in FY25 [1].

The company's gross margin declined marginally to 75.4% from 76.8% in FY24, largely due to inflation in coffee beans and other input materials [1]. This decline in gross margin was accompanied by a reduction in the brand contribution margin from 17% to 16.1%, and a decrease in average daily sales (ADS) per store from ₹33,000 to ₹27,000 [1].

Costa Coffee, now owned by beverage major Coca-Cola, is operated in India through its franchise partner Devynai International Ltd (DIL), a leading QSR (Quick Service Restaurant) chain operator [1]. The brand aims to be among Costa's top five global markets, with India showing strong potential for growth.

The coffee space in India is growing at 10 to 12%, double the rate of global markets, driven by a growing preference for premium coffee among millennials and Gen Z [1]. This trend is reflected in Costa Coffee's aggressive expansion in India, targeting 40-50 new outlets annually despite global economic uncertainties [1].

In the Indian cafe market, Costa Coffee competes with international chains such as Starbucks, Tim Horton, McCafe, and Dunkin', as well as local chains like Cafe Coffee Day, Blue Tokai, Third Wave Coffee, and Barista [1].

References
[1] https://www.business-standard.com/companies/news/costa-coffee-india-fy25-sales-jump-30-per-cent-gross-margin-declines-marginally-125071300221_1.html