For Goa based Rahul Aggarwal, his love for coffee piqued his interest in why it was so difficult to make a good cup of coffee at home. “I realised that when people go out to a café they want a nice cup of coffee. They say `give me a cappuccino,’ or ‘give me a latte,’ but at home they are still having instant coffee and wondering why they can’t have a good cup of coffee at home,” says Rahul Aggarwal, founder, Coffeeza. With the aim to change this perception and to enable coffee drinkers to have a good cup of coffee at home, he started Coffeeza in 2018. “To make a cappuccino espresso or a latte at home sounds like a lot of work and that is a gap we wanted to fill with Coffeeza,” he says. Eight years later, Aggarwal’s Coffeeza, which makes coffee machines, coffee pods and fresh coffee has turned profitable.
Aggarwal wants to create, build and own the at-home coffee space in India. Having made Coffeeza a profitable and scalable business in its six and a half years journey, Aggarwal is now looking to raise funds to scale up the business.
Aggarwal is a big coffee lover. While in college, when his friends would gather in his dorm room, he would often be the one making coffee for his friends. In fact, so much was his love for coffee back in college that his car registration was `Caffeine’. “At that time we just did it for fun. But in hindsight, it sort of manifested,” he says. That’s how the coffee journey started.
When Aggarwal returned to India after completing his MBA from Babson College in 2011, he wasn’t ready to take the plunge into entrepreneurship. He joined his family’s business selling B2B products such as patient ID wristbands or hospital wristbands to hospitals in the UK and Dubai. “Frankly, that work wasn’t very exciting for me. I was more interested in knowing what’s happening in the coffee space and visiting local cafés,” he says.
The realization that globally single serve coffee is one third of the coffee market was a huge wow! moment for Aggarwal. Also, single serve coffee has the benefit of convenience which other formats can’t offer. “For someone like me having fresh coffee is like having fresh food. But there is a hassle that goes into making a fresh cup of coffee at home. To make a cappuccino, espresso or a latte at home sounds like a lot of work and that is a gap we wanted to fill with Coffeeza” says Aggarwal. Coffeeza was launched in 2018 with their coffee machines and coffee pods (which are also compatible with Nespresso machines).
The Indian coffee market is buzzing with activity. With a large number of millennial and Gen Z population in India (age 12 years – 47 years) this segment of the population has experienced a paradigm shift in choosing coffee over other traditional drinks such as tea. It was mainly during the Covid-19 period that there was a significant decrease in the demand for coffee machines in the non-residential sectors as a result of the closure of several cafes and the transition to work-from-home. This led to an increased demand for coffee machines in the residential sector.
With the return-to-office scenario, and adoption of the western café culture, India is witnessing an increasing demand in coffee machines and similar infrastructure. According to a report by Markets and Data, the India Coffee Machine Market was valued at $165.45 million in financial year 2022 and is expected to be around $315.20 million by financial year 2030, growing at a CAGR of 8.39 per cent during the forecast period financial year 2023 – 2030. This growth is mainly due to the country’s expanding coffee culture and rising dual-family income. “Innovations, new product introductions, and escalating customer demand have contributed to the coffee industry’s evolution and thereby affecting the coffee machine market. Furthermore, technological improvements, growing working class population, increased knowledge of health advantages, and rising demand for smart kitchen appliances are anticipated to fuel the growth of the India coffee machine market,” reads the report.
Also gone are the days when Nespresso was the only player in the coffee machine space. There is growing competition from multiple players such as Miele, Philips, Hafele, Wonderchef, and Bajaj Electricals, to mention a few. Coffeeza has two machines – a portable one priced at Rs5,500 and a table-top one priced at Rs9,700. Coffeeza pods are available in over 15 flavours. They are as diverse as thandai, rose and turmeric.
Till now, growth at Coffeeza has come from internal accruals. “We are currently looking to raise funds,” says Aggarwal. According to Aggarwal, he saw the uptake in sales over the last two years. So how did Aggarwal get Coffeeza out there in this crowded space? According to Aggarwal, he wanted to capture the space and build his brand around it. “Our value proposition is we have our own different unique blends that we offer in the market. At pretty reasonable price points. And if people buy Nespresso they can still use our pods,” he says.
Coffeeza is mainly available in the metros and in tier 1 towns. However, the coffee culture is growing quickly in tier 2 towns, with cafes opening in towns such as Jaipur and Surat. Aggarwal stresses the fact that the company is promoting the at-home coffee culture.
Hotels are one of the company’s target customers. Hotels such as Shangri-La, Novotel in Goa and Kochi, JW Marriott in Goa, Claridges in Delhi are some of the hotels which house Coffeeza products.
Of course, the machines, pods and ground coffee are available on the company’s website as well as on online spaces like Amazon, Flipkart and Blinkit. According to Aggarwal, the Coffeeza ground coffee is listed among Amazon’s top five specialty ground coffee brands.
Having succeeded in making Coffeeza a scalable and profitable business, Aggarwal now wants to make Coffeeza a global brand. Plans are to scale up rapidly, and invest in marketing initiatives. While Coffeeza has some unique products, it is a competitive market out there. Aggarwal hopes to make it through the clutter.