Speciality coffee chain Third Wave Coffee plans to expand its presence with 50 new stores in India.

The expansion will include current markets such as Bengaluru, Delhi-National Capital Region [NCR], Mumbai and Hyderabad, and will extend to new cities such as Chennai.

The plan was revealed by the company’s new CEO Rajat Luthra in an interview with the Economic Times.

Luthra has taken the helm following a top-level restructuring in March. He previously led KFC India operations for more than a decade.

He stated that the Bengaluru-based company is also scaling up its roastery capacity threefold.

The move aims to cater to a growing demand across offline retail channels, not just within Third Wave Coffee’s stores.

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“We will continue to be a coffee-first brand. We should add at least 50 stores by the end of the financial year – that’s the minimum we are looking at,” Luthra stated.

The expansion strategy comes amid a surge of venture capital investment in new-age coffee brands, intensifying competition within the sector. International players such as Canada’s Tim Hortons and the UK’s Pret a Manger have also entered the Indian market, joining established brands such as Starbucks and Costa Coffee. Sushant Goel, Third Wave Coffee’s co-founder, has highlighted the potential for multiple stores in current cities without the risk of cannibalisation [reduction in traffic due to proximity of another outlet of the same brand].

Third Wave Coffee aims to further solidify its presence in Bengaluru, its largest market, which already hosts 44 stores. It currently has a total of 107 stores.

The company’s growth trajectory includes not only expanding its store count but also enhancing its product offerings and updating menus.

“The roastery that we have is just enough to feed our own stores. The new capacity – with equipment in place and land deals signed up – will see construction start. Then, we will go all out selling our beans,” stated Luthra.

Goel revealed that 65% of Third Wave Coffee’s revenue is derived from beverages, with the remainder coming from food and merchandise.

Delivery services from platforms such as Swiggy and Zomato contribute to a quarter of the company’s sales.

 The coffee chain has seen a significant increase in operating revenue, more than doubling from 2023 to 2024. In the previous financial year, revenue grew more than fourfold to Rs1.44bn ($17.8m), alongside a loss of Rs540m. Audited financial read-outs for 2023 to 2024 have yet to be submitted to the Registrar of Companies.

The company’s most recent funding round in September 2023 saw an investment of $35m from private equity fund Creaegis, bringing the total raised to $66m.