For generations, filter coffee has been a staple in Indian households, particularly in the southern states. Brewed with care, served in steel tumblers, and enjoyed with warm conversations, filter coffee represents more than just a beverage—it’s a tradition. It’s South India’s best-kept tradition. Its experience differs utterly from what Starbucks (or any other Coffee Chain) offers.
And by entering the Indian market, all coffee chains, including Starbucks, are directly competing with a household product, Filter Coffee. They are directly in competition with the World’s Second-Best Coffee, which is priced at an extremely low rate. This competition warrants a closer analysis, especially between India’s most popular Coffee Chain – Starbucks & India’s best coffee – Filter Coffee.
These are the reasons why Starbucks can NEVER beat Filter Coffee.
Revenue Earned & Number of Cups sold :
On average, a single Starbucks outlet in India sells about 100-150 coffees per day (average cost of coffee is Rs. 250- 300), a stark contrast to places like Udupi or Anand Adyar Bhavan or other small coffee stalls, where a single outlet serves approximately 1,100 cups daily (Ranging between Rs. 15-20).
This essentially means Starbucks earns a revenue of at least Rs. 25000 – Rs. 45000 per day, Rs. 7,50,000/- – Rs. 13,50,000 per month and Rs. 90,00,000 – 1,62,00,000 (1 Crore 62 lakhs) per year. Local Filter coffee joints earn Rs. 16,500 – Rs. 22,000 per day, Rs. 4,95,000 – Rs. 6,60,000/- per month and Rs. 59,40,000/- – Rs. 79,20,000/- per year. These figures only get massive when factored in ALL the stores nationwide.
True, there is a massive difference in the revenues earned. And it indicates that consumers prefer Starbucks over Filter coffee. However, one can’t ignore the glaring difference in the footcount.
Assuming that one person purchases one coffee, the maximum number of people that enter Starbucks is 150 a day, whereas the maximum number of people that prefer filter coffee at a single stall is 1100. There’s a difference of 950 people.
This discrepancy isn’t just about footfall—it reflects consumer preferences deeply rooted in India’s cultural and economic landscape. For a price-sensitive market like India, this disparity outweighs the premium experience Starbucks offers.
Coming to costs, especially operating costs, Starbucks is usually found at high-end malls, posh localities and other commercial areas where the rent is excessive & it uses imported ingredients to match its international standards – a situation that is not the case for Filter Coffee providers. This, along with the foot count that prefers Starbucks – makes it almost impossible to crack into the market where Filter Coffee dominates.
The Third-Space Argument:
Starbucks, the global coffee giant, has long been synonymous with the “third space” concept — a welcoming, cosy environment beyond home and work. This “third place” ethos is more than just a branding strategy; it’s an experience crafted with great care. From the warm lighting and inviting ambience to the free Wi-Fi and hospitable baristas, Starbucks creates a haven where productivity meets leisure, offering people an extension of their living rooms to relax, work, or connect over coffee.
Whilst this works in western countries – where people are actively looking for a third space, in a diverse and culturally rich country like India where coffee preferences, economic sensibilities, and lifestyle choices significantly differ, the viability of the “third space” concept comes into question.
Indians have a deeply ingrained love for coffee, particularly the aromatic and frothy filter coffee in the southern regions. Served in small steel tumblers, this rich, flavor-packed brew has been a staple in Indian households for generations. It’s affordable, authentic, and carries a cultural identity that no global coffee chain can replicate.
This very nature of the Indian Market excludes the majority of people for Starbucks, except the Gen Z & Millennials who are earning enough to afford a Rs. 250-Rs. 300 coffee on a regular basis and understand the idea of ‘Thirdspace”. Whatmore, to make things more complicated for Starbucks, other “thirdspace” providers like Third Wave Coffee, Pret A Manger, etc. are also competing for the exact Gen Z & Millennials who are earning enough and understand the idea of ‘Thirdspace”.
This leaves everyone who is not a well-enough income-earning young Gen Z & Millennial with an affordable, delicious and internationally recognised coffee – Filter coffee. With the provision of a third space, Starbucks ended up isolating its customer base.
Taste, Habit & Price.
Let’s come to the reasons that people often relate to: Taste, Habit & Price.
Taste:
The reason for the unparalleled taste of Filter Coffee, for many, resides in its intricate brewing process. An average cup of coffee may be prepared within two minutes; however, to create the traditional decoction, it needs approximately ten to fifteen minutes, much longer than that of other brewing methods. This ten to fifteen minutes allows the decoction to develop a more profound flavor, aroma, body, and aftertaste within the blend. It also contains a higher level of caffeine content, providing an extra kick in the coffee.
Noticeably, the aroma and texture of the decoction is much more different than in other blends. Filter-Coffee Powder uses a medium roast of Arabica beans, Robusta with a little bit of chicory. Chicory adds a little bit of sweetness and texture to the coffee, which is known to be preferred by filter-coffee drinkers. The coffee grounds are thoroughly roasted and ground which gives the coffee powder. Further, this coffee is enjoyed at a piping-hot temperature, which adds to its signature taste.
Coming to Starbucks- the taste is a reflection of its high-quality ingredients and new combinations. Starbucks is known to serve high-quality coffee along with different flavours and toppings. Its menu has a wide array of combinations that are added to the coffee.Be it summer or winter, spring or fall- they have signature drinks for all. Because of the vast number of items in their menu, everybody has a drink they like.
But this is again a Westernized concept that is still marking its way in India. Indians, especially South Indians, are used to drinking filtered coffee and its taste. They aren’t used to mixing chocolate or caramel in their coffee or adding whipped cream on top of their coffee, and hence are not as open to switching their mode of caffeine consumption to Starbucks.
Habit:
The mention of the term ‘Filter-Coffee’ elicits a profound sense of nostalgia among the majority of South Indians, as it is inherently linked to the aroma of this beverage wafting through the air, every morning. It is customarily prepared; whenever one pays a visit to a south Indian family’s house, fresh filter coffee is invariably brewed as a gesture of hospitality. Moreover, cherished memories of taking a ‘coffee break’ during a road trip are also brought to mind. Most South Indians begin the consumption of filter coffee by observing their parents and relatives indulging in it, and it is indisputable that they are instinctively inclined to partake in this tradition as well.
This subsequently evolves into a customary practice as filter coffee is predominantly the sole variety of coffee brewed within one’s home. Savouring a freshly brewed cup of filter coffee from a traditional steel tumbler early in the morning transcends into a cherished ritual for many. This customary behaviour is then passed down to generations. Few have even asserted that despite transitioning to alternative methods of coffee preparation, they invariably return to the consumption of filter coffee, as it is profoundly ingrained in their cultural identity.
Price (most obvious point of all):
Here’s some context:
This means, for a Nation like India, Starbucks, by its very nature, is a luxury. Although these are not the target audience/consumers for Starbucks, they do constitute a massive market that Starbucks could never capitalise with the prices as they charge.
What more, in the southern part of the country, filter coffee stalls are easily available in each nook and corner. Be it in ‘dakshinis’ or other breakfast joints, filter coffee is readily available and just for Rs. 20. Unless Starbucks changes its entire strategy, there exists absolutely no way in which it can penetrate the south Indian Filter Coffee Market.
And Starbucks knows that.
In 2014, Starbucks was launched in Chennai. People expressed their mixed opinions about the launch on social media. Some expressed their excitement prevailing from the hype of ‘Starbucks’ while others expressed how it is a failed experiment to bring Starbucks to Chennai- the heart of Filter Coffee. People feel that Starbucks could never replace the authentic taste of their good-old filter coffee at the prices it charges.
The nail in the coffin came when it introduced its own version of Filter Coffee at a whopping Rs. 290.
A Sip of Debate: Can Starbucks Topple Filter Coffee?
Starbucks announced last year that it plans to expand and operate over 1,000 stores in the Indian Market by 2028. It has already made its path to tier two cities, with plans to widen its reach there and introduce stores in tier 3 cities like Siliguri and Kohlapur in India. This aggressive marketing style is introduced as a gamble. Tata is placing heavy bets on the GenZ and Millennial population as they interact with the cafe model the most, and their high disposable income creates a lucrative market for them. But the question arises whether this would be the most brilliant move in the backdrop of an already saturated market.
In a land where filter coffee reigns supreme, Starbucks’ journey to win Indian hearts is far from over. The battle is not just about selling coffee—it’s about understanding a deeply rooted culture, respecting tradition, and adapting to the evolving preferences of a diverse and price-sensitive population. While Starbucks has its loyal patrons, the legacy of filter coffee continues to brew strong, fueled by nostalgia, affordability, and a growing sense of pride in all things local.
The short answer to the question – Can Starbucks Topple Filter Coffee? – is No. But one can’t deny due credit to Starbucks for its efforts to stay relevant in the Indian Coffee Market.
Also read: 3 Reasons why Sugarcane juice is NOT commercialised.
