What is driving brands to launch coffee-based products?

Parle Products, with its Kapi Candy, is the latest to launch a coffee-flavoured product. Earlier Britannia introduced Bis Cafe and mCaffeine has built its entire skincare brand around coffee.

Parle Products recently launched a filter coffee-flavoured ‘Kapi Candy’. Targeted at the coffee-loving youth, it will soon be launched across India.

Krishnarao Buddha, senior category head, Parle Products, says that ‘Kapi Candy’ was launched about three months back in South India. Then, in July, it was launched in the western market.

In its recent TVC, the brand clearly establishes its South Indian connect. From the Carnatic music in the background, to its mascot wearing the traditional ‘veshti’ and ‘angavastram’, the ad is well-placed in its cultural context. Produced by Nitin Tandon Productions, it shows the transition of filter coffee into candy.

In fact, even the name ‘Kapi’ is the popular nomenclature for the beverage in South India.

The brand already has a coffee-flavoured toffee called ‘Cafechino’, which competes with Lotte’s ‘Coffy Bite’. The new candy will be competing with the popular coffee candy ‘Kopiko’.

“While our competition is placing it as a cappuccino candy, our candy is different, as it is filter coffee-flavoured,” says Buddha.

Priced at Re 1, it is primarily targeted at young adults in the 15-25 age group. The secondary TG remains kids.

“Candies are largely an impulsive purchase, and visibility is extremely important to generate that impulse. When one sees it in the store, they desire it. At times, it could also be the retailer promoting it. Sometimes, it is also given as a change, and once they like the taste, they ask for it the next time around,” explains Buddha.

‘Kapi Candy’ is just one of the many recently-launched coffee-associated products. Coffee, as a flavour in packaged food and drinks, is growing in India.

Recently, Parle-G also launched Kismi Cinnamon biscuits as an accompaniment with coffee.

Meanwhile, Britannia launched coffee-flavoured cracker ‘Biscafe’. It is said to be ‘the perfect partner to your coffee’.

Earlier this year, homegrown instant coffee brand Sleepy Owl partnered with ice cream brand NOTO to launch a limited edition coffee-flavoured ice cream – ‘Chocolate Coffee Fudgesicle’.

Buddha says the rising interest in coffee is due to its cool perception among young adults. “Coffee is exceedingly the in-thing in the country now, as young adults find it fashionable to drink it. People feel tea is passé now.”

This initially started in the early-2000s, with the launch of coffee chains like Cafe Coffee Day and Barista. It was further boosted with the influence of western shows. And in recent times with the entry of Starbucks.

Further, D2C coffee startups like Blue Tokai, Sleepy Owl and others, reimagined the coffee market that was for long dominated by conventional players like Nescafe, Bru and Sunrise.

Over the five years, until July 2022, there have been more than 200 food and drink launches featuring coffee as a flavour across multiple categories, other than hot beverages, according to Mintel Global New Products Database (GNPD). The nutrition and meal replacement category (15%) dominates these launches, followed by sweet cookies and biscuits (13%), and chocolate and confectionery (8%).

In Mintel’s research on nutrition and malt drinks, 32% of Indians mentioned that they are interested in malt food drinks that contain tea or coffee. 40% of protein supplement consumers are interested in consuming coffee-flavoured protein supplements. “Examples include MuscleBlaze Biozyme Performance Whey co-branded with Blue Tokai Coffee Roasters, and Raw Pressery with coffee-flavoured protein milkshake,” says Tulsi Joshi, senior food and drink research analyst, Mintel Reports India.

The report also highlights that Indians are getting experimental and adventurous with their salty snack flavours.

“For instance, 40% of Indians are interested in salty snacks with tea/coffee flavour. Snack category with popcorn is leveraging this, including Kettle Corn Coffee Popcorn, 4700BC Mocha Walnut Chocolate Popcorn and By Nature Coffee & Cinnamon Coconut Chips. Meanwhile, snack bar (a relatively health-centric snacking) category, has long been using coffee as a flavour,” Joshi adds.

Coffee’s popularity is not just limited to food and beverage, but also extends to skincare products. Brands like Mamaearth and Beardo use coffee as an ingredient in products. Meanwhile, mCaffeine has built its entire brand around coffee. Coffee-based products contributes 83% of its sales, 10% from tea-based and 7% from chocolate-based.

Tarun Sharma, co-founder and CEO, mCaffeine, says there will be a time when people will apply more coffee than they are drinking.

“Coffee has become a psychological aspect to connect with people. It hits all the senses- colour, aroma, flavour- and that's what helps build the psychological connect. Our consumers may not be consuming coffee but they may like the aroma of it,” he says.

GD Prasad, founder, VS Mani & Co, a D2C brand that sells filter coffee and South Indian snacks, believes this rising interest in coffee could be a result of increased conversations around the beverage. He says there may not be a large shift in consumption, but more people are talking about it.

“Many players have entered this space and tried to offer the experience in a simpler format. Pre-pandemic it was all about the touchpoints, like Starbucks, but post the pandemic they had no access to this flavour. D2c brands had an opportunity to provide this product at home. More brands are now putting it out there in an easy to consume format,” he says.

Kalyan Karmakar, a leading brand consultant and blogger at Finely Chopped Consulting, says that coffee has always been cool but a lot has been happening in the coffee market in the last three years.

“This is not really a new trend. Coffee has always been trendier and cooler among the younger audiences. But in the recent years the difference has become starker. There has not been as much development with tea as much in coffee. For example, the Dalgona coffee trend, rise of Indian coffee beans and brands, in the use of chocolates, candies and ice creams. But nothing tea flavoured,” he says.