In an exclusive interview, CEO Rajat Luthra outlines the brand’s aggressive 2026 expansion blueprint, deeper city penetration, innovation strategy, and the rising wave of premium coffee consumption in India
How would you describe Third Wave Coffee’s journey so far? What has powered your scale-up?
We have launched our 200th outlet in Chembur. We added nearly 100 stores in the last twelve months, essentially doubling the brand’s size in one year. What took us eight years, we replicated in a year. We currently operate in 12 cities, whereas some peers are present in as many as 80. The runway is long. Our core philosophy is strong unit economics. Every outlet must be EBITDA-positive. We build clusters to keep logistics, operations and costs efficient. Operational discipline and unit-level profitability have been central to our growth.
India’s premium café market has become intensely competitive. How are your revenues tracking, and what does your category mix look like?
India remains deeply underpenetrated in café density, so there is ample headroom even with new entrants. We focus heavily on transaction growth rather than only SSSG. Of the 100 stores we opened last year, most were in existing cities, so increasing customer footfall per café was essential. We are in a comfortable position on transaction growth. Our mix remains healthy: 63–65 per cent beverages, 27–28 per cent food, and the balance is merchandise and home coffee. This mirrors global benchmarks, though food plays a stronger role in India.
What does the 2026 rollout look like in terms of store expansion, new markets and infrastructure?
We invested significantly in our backend last year. Our roastery in Bangalore, one of the largest in India, can support 700–800 cafés. The capacity can scale as volume increases. We set a target of 100 stores for this financial year and are on track to exceed it. Next year, too, we will target at least 100 openings. New markets are a priority. The East — particularly Kolkata — will open for us. We will also expand into Visakhapatnam, Cochin and other major southern cities. Lucknow remains a key priority; our teams have already conducted multiple visits. We localise intelligently. For Ahmedabad, we conducted detailed focus group discussions and introduced a market-relevant 20–30 percent addition to the food menu. The early response has been excellent.
In aspirational cities like Lucknow, new brands often see immediate traction. Is this your expectation too?
Yes. Earlier, awareness-building took time. Today, thanks to stronger brand recall, new-store sales pick up from day one. Our recent openings in Ahmedabad and Mangalore reflect this shift. It’s a sign of the brand’s growing equity.
As you scale across India, how do you ensure sourcing integrity, quality, and consistent customer experience?
Our roastery ensures uniformity in coffee beans nationwide. We are also engaging more deeply with farmers to maintain consistency at the source itself. Barista training is our biggest lever. Our trainer-to-store ratio is among the best in the industry. Each barista undergoes certifications across stations — hot food, cold food, hot beverages, cold beverages and hospitality. Store health is measured via a certification dashboard. Quality is maintained through rigorous training and continuous assessment.
Many café brands underplay food. How are you approaching this, especially as other brands are also expanding their food offerings in India?
We have invested heavily in our breakfast layer. It has been a major contributor to transaction growth. More consumers now visit between 8 a.m. and 10 a.m., treating cafés as workspaces.
Around 20–30 per cent of stores are seeing breakfast contribute up to 30 percent of sales. We follow a RED framework — Relevant, Easy, Distinctive. Relevancy across channels, dayparts and trends is central to our food strategy.
India has emerged as the second-highest grower and sixth-largest consumer of coffee. How do you view India’s evolving coffee identity?
Indian coffee has always been excellent, but it never got its due domestically because the premium crop was largely exported. The global shortage last year led to higher exports of Indian coffee, but this year, even with a better crop, exports remain strong because the world recognises its quality. Brands like ours have helped give Indian coffee the respect it deserves. Its character is strong, and global appreciation is rising.
Third Wave Coffee has just crossed the 200-café milestone. What does this achievement represent for the brand, and how does it shape your expansion strategy for the coming year?
Crossing 200 cafés is not just a numeric milestone; it reflects the trust of our community and the disciplined growth engine we have built over the years. Our focus has remained constant: to build a sustainably scalable business and deliver a high-quality, consistent café experience across formats and geographies. With our roastery’s eight-times automation capability, we are now equipped to support up to 700 cafés, creating a strong foundation for the next phase of expansion.
In Mumbai, this will be our 40th café, and we intend to further strengthen our presence in the region in the coming year. By next year, we aim to add 100 more cafés as we deepen our presence in both existing and new markets.
Chembur was selected for the 200th café because of its growing café-going culture, strong concentration of young professionals and students, and an established consumer base that values premium, experience-led coffee spaces. This is our second café in the neighbourhood, underscoring the strong traction we have built there. To celebrate the 200-store milestone, we are extending an Rs 200 rollout in the promo wallet to all our app users, redeemable from 12–14 December.
