McDonald's India (W&S) to Open 45-50 Stores Every Year Until 2027; Plans to Invest INR 1400 Crore Akshay noted that coffee now accounts for 12 per cent of McDonald's overall sales. He predicts this figure will rise to 18 per cent over the next few years.

Coffee isn't just a drink anymore; it's a culture, a statement, and for many, a way of life. McCafé, McDonald's in-house café brand, has been brewing its way into India's coffee-drinking habits since 2013. In an interview, Akshay Jatia, executive director of Westlife Foodworld, shared insights into the rise of McCafé in India, the changing coffee culture and McDonald's vision for the future. As the nation's coffee consumption continues to grow, McCafé has positioned itself at the forefront of this evolution. When asked what prompted McCafé's entry into the coffee space, Akshay's response was grounded in foresight.

"The journey started back in 2013, and it was based on the fact that India is moving towards a very strong coffee-drinking culture. We've seen that play out, specifically as Gen Z and Millennials have used coffee as an occasion to meet, to indulge in social settings after school, after college, after work," said Akshay.

He emphasized that this trend was a long-term bet that has worked out favourably. Coffee, which once played second fiddle to tea in India, is fast becoming the beverage of choice for the younger generation, especially in urban areas. Akshay revealed that 69 per cent of Indian Millennials see coffee as a "companion-driven occasion," further cementing McCafé's positioning as a place to connect.

Brewing a Strong Growth Trajectory

Reflecting on McCafé's growth over the past decade, Akshay noted that coffee now accounts for 12 per cent of McDonald's overall sales. He predicts this figure will rise to 18 per cent over the next few years. Yet, the broader market potential is enormous.

"On average, people around the world drink 200 cups of coffee per year, but in India, it's just around 30 cups," Akshay explained. "There's huge room for growth," he added. The double-digit growth of coffee consumption in India, fueled by younger generations, offers a tantalizing glimpse into the future.

Akshay declared that consistency and quality were the reason for McCafé's standout success in a market flooded with coffee shops. "Our promise to customers is convenience at a very high quality, consistently delivered. We do that better than most, which is why we're the market leader. In terms of McCafé, our offering is premium, aspirational, and uses high-quality coffee beans sourced from the plantations of Chikkamagaluru."

McCafé coffee is Rainforest Alliance-certified, which adds a layer of sustainability to their value proposition—something increasingly important to modern consumers. As Akshay pointed out, "Customers find it to be a great occasion and come back repeatedly as they do to McDonald's for the multiple occasions we stand for."

Expansion Plans

As for expansion, McCafé is on a steady path to growth. Currently, McCafé operates in around 92 per cent of McDonald's stores, with plans to expand that to 100 per cent over the next few years. McDonald's India (W&S) aims to open 45 to 50 new stores every year until 2027, with a total investment of around INR 1400 crore over the next few years.

Akshay stated, "In terms of our five-year vision, which is Vision 2027, we are anticipating an investment of roughly around 1400 crore over the next three to four years to set up these McCafés."

With so much potential for growth, McCafé is also playing an essential role in educating Indian consumers about coffee. Akshay believes that the more people understand what good coffee is, the more they'll appreciate it. "Our first task is to educate people in terms of what a good cup of coffee tastes like, whether it's hot coffee or cold coffee," he explained. And that education is leading to shifts in consumer behavior. While some may prefer flavored coffees, others are starting to appreciate black coffee and the nuances of different brews.

"We've added two new coffee flavors—French Vanilla and Cinnamon Spice. These international flavors are part of our effort to educate people on what a good cup of coffee tastes like," said Akshay. He also highlighted McCafé's focus on offering wholesome and nutritious options, such as the recently launched millet bun, in partnership with CFTRI.

As India's coffee culture evolves, McCafé is perfectly poised to cater to a generation that views coffee as much more than a beverage—it's an experience. Whether it's catching up with friends, closing a deal, or going on a first date, McCafé is becoming the go-to spot for life's many moments.

Impact of Tier II & Tier III Cities

While coffee is often seen as an urban trend, Akshay pointed out that tier II and tier III cities have been crucial to McCafé's growth. Surprisingly, these smaller cities are where McDonald's and McCafé have witnessed some of the most aspirational consumer behavior.

"Customers in tier II and tier III cities are more aspirational than even those in tier I. McDonald's as a brand has gained great traction there because of our value-for-money approach, which combines a great price point, experience, and high-quality product." In these cities, McCafé serves as more than just a coffee outlet; it's a lifestyle brand that resonates with aspirations for a global experience at local prices.

Akshay also addressed a critical challenge; balancing the aspirational nature of McCafé with its value-for-money promise. For many brands, these two concepts can seem at odds, but McCafé has found the sweet spot.

"Value for money takes into account aspirationality because customers price that in when they look at the cost," Akshay said. In other words, for McCafé, being affordable doesn't mean compromising on the experience or quality—it means offering high-quality coffee at a price that's fair. "It's high quality at a great price. That's what McDonald's stands for, even beyond McCafé."