Blue Tokai, valued at 650 crore rupees, is dominating India’s coffee market worth 4,000 crore rupees. The company is leading with an annual revenue of 130 crore rupees. Before understanding Blue Tokai’s success, it’s important to know about the coffee market.

After water, coffee is the most consumed beverage globally. It ranks among the top ten traded commodities worldwide. There’s even an interesting story from Arab-Asian countries about coffee: in olden times, women could only cite one reason for separating from their husbands—that he didn’t like coffee. Though a myth, it highlights coffee’s long-standing importance. The coffee market has seen three major shifts over three distinct periods. In the 1800s, coffee began to be marketed as a product. This was when people started learning about the kick caffeine provides. There were no brands at that time.

Years later, in 1971, big companies like Starbucks rebranded coffee and started cafes. They introduced many value-added coffee products such as frappuccinos and cappuccinos, bringing changes to coffee culture.

The third major shift happened when consumers began showing a keen interest in knowing more about their coffee—where it came from, which farm produced it, whether the coffee beans were fresh, and if the flavor matched their preferences. This led to the rise of specialty coffees. Brands that could deliver the desired flavor and quality became popular. The Specialty Coffee Association of America awards scores above 80 to such specialty coffees.

However, these changes reached the Indian market slowly. While the world was entering the third phase in 2011, India was just beginning the second phase—when cafes started gaining popularity. India’s coffee market is divided into two segments: home-made coffee, mostly using instant coffee powders, with brands like Bru and Nescafe leading; and cafe-brewed coffee. Even today, 70% of the coffee market is dominated by instant coffee powders. Cafe Coffee Day held about 50% of the cafe market, with 1,200 outlets across India. In 2012, Starbucks entered the Indian market with Tata’s support, offering a premium coffee experience. At that time, specialty coffee was virtually unknown in India.

It was also in 2012 that Blue Tokai’s founder, Matt, came to India. Born and raised in America, he moved to India for work in Chennai. Though his Chennai-based parents were familiar with the local filter coffee culture, Matt, accustomed to premium coffee in the US, found Indian coffee unsatisfactory. He recognized the absence of specialty coffees in the Indian market. This realization led him to leave his high-paying job and start Blue Tokai with his wife Namrata.

What began as a small venture in their Delhi home has grown into a business with over a hundred outlets nationwide. Their philosophy was simple: if, as a consumer, you can’t find a product you love in the market, you should create it yourself.

Now, let’s look closely at Blue Tokai’s three secrets to success. The first is their exceptionally high quality. Founder Matt is well-researched on coffee and uses only 100% Arabica beans, considered the best coffee beans globally. They also committed to delivering freshly roasted coffee to customers’ homes. Roasting is as crucial as the beans themselves; it involves roasting beans at different temperatures and times to achieve the desired flavor. Even the best beans lose their quality if roasting is off. For example, coffee brewed from beans roasted four weeks earlier tastes significantly different. To tackle this, Blue Tokai roasts coffee only after it is ordered—a practice unheard of at the time. Additionally, they ensured sourcing the highest-quality beans by traveling across India to visit numerous farms and verify quality. Few know that coffee beans come from a cherry-like fruit, and factors like altitude and climate affect quality. Blue Tokai personally inspects farms to guarantee these standards. This focus on quality is why giants like Starbucks are moving away from specialty coffees.

Being India-based gave Matt an advantage; India is among the top eight coffee-producing countries worldwide and a prime source of high-quality Arabica beans. Though India produces a lot, 70% of its coffee is still exported. Blue Tokai positioned itself between Indian farmers and exporters, especially in Tamil Nadu, Kerala, and Karnataka, which account for 96% of India’s coffee production. They approached farmers with a partnership model, promising better prices than exporters, labeling each coffee packet with the estate’s name, and educating farmers on producing top-quality coffee. Though it took time, farmers eventually agreed. This partnership led to the availability of Blue Tokai’s premium coffee beans today.

Their second success secret is their ability to maintain relationships—not just with customers but also suppliers. A key feature of Blue Tokai is transparency. Most Indian coffee farmers are smallholders who depend entirely on exporters, and their identities are generally unknown. Blue Tokai became the first to label every coffee packet with the name of the farm and farmer. Though it may seem minor, it strengthens long-term partnerships. Farmers benefit from increased demand because consumers know exactly where their favorite coffee beans come from. One reason this worked is Blue Tokai’s customer base, primarily young people aged 27 to 35, who care deeply about the food they consume and its source. Blue Tokai also took the lead in educating consumers on the correct way to brew and enjoy coffee. Thanks to Blue Tokai, specialty coffee has gained popularity across India. Their website provides detailed information on coffee preparation and consumption—how much sugar to add, the ideal water temperature, and more. Specialty coffee requires specific brewing equipment that allows hot water to dissolve the coffee’s flavors as it drips down. Understanding that Indian customers might find this unfamiliar or expensive, Blue Tokai cleverly introduced a brewing process using the same filter apparatus used for tea, making specialty coffee accessible at home. This was a huge success. Additionally, they launched “Easy Pour Coffee,” a product that requires no special equipment. This is how Blue Tokai overcame accessibility challenges.

The third secret is strategic expansion. Fundamentally, Blue Tokai is a coffee brand, not just a cafe brand. You will notice they operate relatively few cafes. Despite rapid growth, they don’t have outlets in every city because they focus on tier-one cities where premium brands have the most demand. From the start, they used both direct-to-consumer online models and an omni-channel approach. They aim to open 80 new outlets annually, which is significant given they operate only in top cities. Currently, 60% of their revenue comes from these cafes, boosting trust among corporate clients. This trust is crucial as they expand their B2B business, which now accounts for 50% of their non-cafe revenue.

From a small home-based startup to a 650 crore-rupee business, Blue Tokai’s growth has been driven by these three secrets to success.