BANGALORE: India is likely to witness a rapid rise in the number of swanky cafes serving cappuccinos, espressos and lattes, places that have emerged as "cool" hangouts for the new generation of people. The number of cafes in India is expected to go up to nearly 5,000 in a couple of years from the 800 at present.

According to industry sources, the size of this niche market is estimated to be around Rs. 2,500 crore, growing at a rate of 40 per cent annually. In the light of the projected growth, it is not only Indian companies that are bracing themselves to expand their operations but also leading coffee chains of the world, which have evinced interest in India.

The rising disposable income among the rich and the middleclass besides the changing tastes of the consumers, especially the youth, is fuelling this growth. An increasing number of people willing to experiment and a travelling community that has developed interest in other cultures have all contributed for the rapid growth.

U.S.-based Starbucks Coffee Company is expected to enter Indian market by December 2007. The Seattle-based roaster runs a chain of 12,700 cafes worldwide. Coloman Cuffy, Starbucks Director (Trading and Operations), is in India to explore avenues in the Indian market. The Italy-based Illy Café plans to launch its stylish outlet with an authentic Italian touch "Espressamente Illy" through franchisees in India by the end of this year. It will initially set up five to 10 cafes in major cities.

Roberto Morelli, Illy Café coffee culture manager, said, "India with its strong coffee culture is important for us. We want to open a direct café in India on the lines of the one we are running in Paris."

The Indian market is wide open. The phenomenal success of the two Indian companies Café Coffee Day and Barista have underscored the potential of the market. These coffee outlets have bridged the gap between the corner coffee shop and those in star hotels.

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