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Costa Coffee's India FY25 sales jump 30%, gross margin declines marginally
The growth was driven by store expansion, as the number of outlets increased from 179 to 220 in FY25, according to the latest annual report of Devynai International Ltd (DIL).
Its revenue from operations was ₹151.8 crore, and profit stood at 116.6 crore for the financial year ended March 31, 2024.
Costa Coffee's gross margin declined marginally to 75.4 per cent from 76.8 per cent in FY24, primarily because of inflation in coffee beans and other input materials.
"The brand contribution margin came down from 17 per cent to 16.1 per cent, with average daily sales (ADS) per store declining from ₹33,000 to ₹27,000, translating into a reduction of same store aales growth (SSSG) from 8.7 per cent to 4.1 per cent during this period," said DIL.
Costa Coffee is operated in India through its franchise partner DIL, a leading QSR (Quick Service Restaurant) chain operator.
Earlier this year, in April, Costa Coffee's Global CEO Philippe Schaillee, who was on a visit here, told PTI that India is going to be among the top five global markets for the British coffee chain brand.
The coffee brand, now owned by beverage major Coca-Cola, is currently among the top ten global markets.
"Costa Coffee is aggressively expanding in India, targeting 40-50 new outlets annually despite global economic uncertainties. DIL sees India as a high-potential market, driven by a growing preference for premium coffee among millennials and Gen Z," said DIL.
This trend is manifest in the fact that the coffee space in the country is growing at 10 to 12 per cent, double the rate of global markets.
"India, which is among Costa's top 10 markets globally, has the potential to get into the top five markets in five years, and Costa Coffee is just the sweetly aromatic spot to seize this strong opportunity," the report said.
According to DIL, India, which is largely a 'chai' (tea) loving nation, is becoming a country of a growing populace of coffee lovers, with a massive cultural shift in its drinking habits over the years.
Coffee is now the first love of many Gen Z Indians influenced strongly by Western culture, which is often a part of their work ethos.
"At Costa Coffee, this has actuated a strong focus on expanding the brand's presence in high footfall locations, such as airports and multiplexes," said DIL.
In the Indian cafe market, Costa Coffee competes with international chains such as Starbucks, Tim Horton, McCafe, and Dunkin'.
Besides, local chains like Cafe Coffee Day, Blue Tokai, Third Wave Coffee and Barista are also amplifying their play in the fast-growing cafe market in India.
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