Burger and pizza chains in India are making major investments in coffee

Coffee is quickly becoming the latest battleground for India’s leading quick-service restaurant (QSR) chains, as operators traditionally focused on burgers, pizzas, and fried chicken diversify into premium beverages to drive growth. Brands such as McDonald’s, Domino’s, Burger King, and most recently KFC are expanding their coffee and specialty drink offerings, aiming to boost margins, lift average order values, and attract customers beyond the usual lunch and dinner rush.

Devyani International, which operates KFC restaurants in India, is preparing to launch Kwench, a beverage-centric sub-brand that will feature iced coffees, shakes, and sparkling lemonades. Kwench has already been introduced in markets such as the UK, Canada, and Ireland, and India is expected to be the next destination. “On beverages, there’s a sub-brand called Kwench, and we are already discussing in India to experiment with Kwench. If that experiment is successful, we will roll it out nationally,” said Manish Dawar, President and Group CEO of Devyani International, during the company’s June quarter earnings call. Dawar added that most of the preparatory work around capital expenditure and product optimization is complete, with efforts now underway to customise offerings for Indian tastes.

The pivot toward beverages is rooted in their profitability, industry executives say. Specialty coffees and drinks typically have lower input costs because ingredients like milk, ice cream, and flavorings are bought in bulk and used in relatively small quantities per serving. At the same time, beverages are priced at a premium, helping restaurants immediately increase the average order value. Impulse purchases and quick preparation times further enable QSRs to drive same-store sales and revenue, according to a café owner who spoke on condition of anonymity.

Beyond monetary benefits, the expansion into beverages allows QSR operators to capture traffic during traditionally quieter hours such as breakfast and mid-afternoon. This increased utilization of outlets, which typically see their highest turnout during lunch and dinner, is a crucial advantage. Domino’s, for example, launched its Café Domino’s format earlier this year, opening its first café-style store in Noida to target customers during non-peak hours and grow its share in India’s burgeoning coffee market.

According to market research firm IMARC Group, India’s coffee shops and cafés market is projected to grow from $424 million in 2025 to $1.152 billion by 2034, representing a compound annual growth rate of 11.4 percent. IMARC attributes this momentum to increasing urbanisation, higher disposable incomes, and a rising café culture, particularly among millennials and Gen Z. The presence of global coffee chains, the growing appeal of premium blends, and cafés doubling up as social and co-working spaces are also fueling the trend. Digital ordering options, fast-service formats, and a growing appetite for specialty coffee continue to expand the market.

Industry incumbents and newcomers alike are investing heavily to capitalise on the opportunity. Local chains such as Blue Tokai and Third Wave Coffee have been expanding rapidly, while international entrants like Indonesia’s Kopi Kenangan (with plans for 50 outlets in three years) and Greece’s Coffee Island (targeting 250 locations by 2029) are moving in. McDonald’s operator Westlife Foodworld has introduced McCafé at all 482 of its restaurants across 79 cities and aims to grow the concept to as many as 630 outlets by December 2024. Its counterpart Connaught Plaza Restaurants, responsible for McDonald’s in North and East India, has also expanded McCafé to 200 outlets. “At McCafé, our ambition is to build one of India’s most loved and trusted coffee brands,” said Anant Agarwal, Vice-Chairperson of Connaught Plaza Restaurants, citing the continued investment in expanding the beverage portfolio.

Burger King has launched its BK Café format across most of its stores since 2022, with Rajeev Varman, Whole-time Director and Group CEO of Restaurant Brands Asia, calling the café strategy a vital part of the menu structure going forward.

As fast-food competition heats up, coffee is evolving from a meal accompaniment to a strategic lever for growth. For India’s QSR operators, specialty beverages promise not only higher margins but also a way to attract a broader customer base and unlock new consumption occasions throughout the day.