The ₹97 Coffee Disruption: How abcoffee Cracked The Math | abCoffee | CNBC TV18

Added: 2026-06-03

[00:00:00]Okay, real talk. I need my morning cup of coffee, but I don't want to spend 300 bucks on one cup. [music] And I also don't have 20 minutes to stand in a queue. So, what did I do? I downloaded this app last night and I've pre-ordered an Americano.

[00:00:18]Single origin beans, 97 rupees only, and it says it'll be ready in 90 seconds.

[00:00:24]So, I'm going to go and check out if my order is ready or not.

[00:00:32]>> Can I come in and become the barista?

[00:00:34]Oh.

[00:00:41]Aishwarya, Americano regular. So, I can make it now, yeah?

[00:00:58]>> Oh, the coffee's already ready.

[00:01:05]Hm.

[00:01:07]It's actually quite nice. [music] I wonder who's actually made this.

[00:01:12]>> Cha IT.

[00:01:17]>> This is Abhijit Anand.

[00:01:20]Four years ago, he started Up Coffee with a simple idea.

[00:01:25]Great coffee shouldn't cost you a fortune or your entire morning. And just last week, he has raised 61 crore rupees from investors to [music] scale this model across India. Was this always the plan? A kiosk, uh you know, 97 rupees per coffee?

[00:01:42]>> India's moving away from a occasion-led cafe culture experience, that cafe culture, to a habit-based daily consumption uh culture. Up Coffee was built for that shift. So, when we started, we were very clear we're going to build smart format, small spaces, intelligently designed, tech-based, and high-grade coffee at prices that you can drink daily.

[00:02:03]>> Today, Ab Coffee operates 97 stores across Mumbai, Delhi NCR, and Bengaluru.

[00:02:09]Most are compact, grab-and-go formats designed for speed rather than long cafe sittings. [music] And according to the company, the model is already delivering results.

[00:02:19]>> 96 out of 97 are profitable. We break even in less than 2 months. If I solve for sofas and chandeliers, I end up charging you the cost built into the cup.

[00:02:28]>> Mhm.

[00:02:29]>> For which the brand is not It's not necessary to build into the cup, right?

[00:02:32]So, what we have done is we have stripped out every single cost that's not necessary to be put in the cup. And the customers pay up only for the great quality coffee and service that you get at the stores, and all the frills are removed.

[00:02:44]>> You know, Starbucks India has [music] lost 81 crore rupees in FY24. Blue Tokai has lost 54 crore rupees. Everyone is bleeding in, you know, this market trying to acquire customers.

[00:02:57]Your cappuccino starts at 97 rupees. How does that math work in your favor?

[00:03:02]>> Our rent-to-revenue ratio, just pure math, right, is 10 and 1/2%.

[00:03:06]>> Okay.

[00:03:06]>> Find me a coffee chain in the country whose rent-to-revenue ratio is less than 15%.

[00:03:11]>> Zero.

[00:03:12]>> This has been built in a fast-paced smart format. Where our direct cost that goes into the store, we try to cut it down such that it's beautiful, it's it's meant to serve the purpose that it does for quick pick-me-up, but it doesn't is not call center heavy.

[00:03:29]>> Walk me through a day in a kiosk.

[00:03:33]What does a good day look like in terms of your how many cups, what does the revenue look like, what does your margin look like?

[00:03:40]>> I'll take one location in Mumbai. It's in BKC, right? Morning starts at 7:30 a.m. in the morning, does around 450 coffees a day.

[00:03:48]It's a 5-day business. We do roughly on a monthly basis a revenue of around 10 to 14 lakhs.

[00:03:53]>> Right. And an EBITDA of around 25 odd percent.

[00:03:57]>> You know, while 97 rupees a cappuccino is the pitch, what is and what are the best selling products right now that is clocking you the most numbers and the growth?

[00:04:07]>> So, if I had to say SKUs, we have more than 500 SKUs that you can select from.

[00:04:12]The core items are only limited to 27, right? And these core items will include the best sellers and also different ranges. Our top seller in the country is signature cool coffee. Second best seller is cappuccino.

[00:04:23]Then vanilla oat milk matcha is a signature beverage from us. And then recently, it's protein Americano.

[00:04:28]>> You've just raised 61 crore rupees from investors. Help me understand where will the money get deployed, what's [music] in the pipeline, by the end of this year what all would we see coming up from Up Coffee's end?

[00:04:41]>> Everything that has worked, we're going to do that 1,000 times more. 54% of our offline orders happen through Up Coffee app.

[00:04:47]>> Mhm.

[00:04:48]>> 25% of the offline orders are subscription led, which means people hold a card before they even enter the store, right? To order. We are going to further double down on that.

[00:04:56]>> You have a subscription led model. Help me understand what is the kind of conversion rate that you see on that front?

[00:05:02]>> One out of every customer that walks into the store has a card.

[00:05:06]>> Okay.

[00:05:07]>> Customer who holds subscription cards order three times more than a customer who just walks in and orders.

[00:05:13]So, the average consumption rate on subscription is 16 to 17 coffees a month.

[00:05:19]>> Up Coffee currently clocks around 5 and 1/2 crore rupees in monthly GMV and is targeting 100 crore rupees in revenue this financial year. While 96 of its 97 stores are already profitable, the company says overall profitability is still a few dozen stores away. A milestone founder Abhijit Anand believes it can achieve within the year.

[00:05:42]The average Indian drinks 30 cups of coffee a year. The global average is 200. Now, that gap, 170 cups, is the single biggest opportunity in India's consumer market right now. And every brand that you can think of, from Starbucks to dozen homegrown startups, is fighting to fill it. Now, the real question isn't whether India will drink more coffee, it will. The question is who makes money doing it first? Because so far, nobody really has. With camera person Balbir Singh, this is Ashwarya N Inamdar for CNBC-TV18.

[00:06:23]>> For more news and updates, all you need to do is follow CNBC-TV18 on all of our digital platforms.