The Beverage Boys: What's Brewing with Nikhil Kamath & Bros?

The Indian craft beverage scene is witnessing an unprecedented boom, driven by evolving consumer preferences, a shift toward premiumization, and a rising appetite for health-conscious drinks. Tapping into this dynamic landscape, investor and entrepreneur Nikhil Kamath recently hosted a power-packed episode of his podcast series, WTF, titled “WTF is Craft Beverages?” The discussion brought together some of India’s most pioneering craft beverage industry experts, offering a deep dive into the sector’s challenges, opportunities, and growth trajectory.

Featuring Matt Chitharanjan, Co-Founder of Blue Tokai Coffee Roasters; Rahul Reddy, Co-Founder of Subko Specialty Coffee Roasters; Aneesh Bhasin, Co-Founder of Foxtrot Beverages (Svami Tonic Water); and Aditya Kidambi, Co-Founder of Mossant Fermentary, the conversation offered invaluable insights for entrepreneurs, investors, and industry leaders looking to carve their niche in this fast-evolving space.

The Rise of Functional and Ethnic Beverages in India

The Indian beverage industry is undergoing a dramatic transformation as consumers embrace specialty brews, cold brews, and functional beverages. While chai remains an undisputed favorite, there’s a growing inclination toward artisanal and health-oriented drinks, including kombucha, tonic water, and alternative brews.

Despite this growing demand, India still lacks a dominant homegrown beverage brand, signaling an untapped market for innovation.

“As an investor, I’m a big proponent of homegrown brands,” said Kamath. “I like the coffee space—it’s kind of healthy, gives you a high, is societally accepted, and is crazy addictive. When I look at the coffee industry in India, especially the craft coffee segment, it’s not that big. I think this is a good time to build a novelty Indian craft beverage company. There is huge scope for Indian novelty products to sell in the long run.”

Adding to the discussion, Aditya Kidambi cited the meteoric rise of the kombucha market in India, which has grown from INR 30 crores in 2021 to INR 200 crores today, with projections reaching INR 1,000 crores by 2032. This growth underscores the sector’s immense potential for expansion and investment.

Local Flavors, Global Impact

Craft beverage brands are increasingly focusing on uniquely Indian flavors, ethnic sodas, and functional drinks that cater to evolving consumer demands. By integrating local ingredients and cultural authenticity into their offerings, brands can differentiate themselves in an increasingly competitive space.

Key Trends Driving India’s Craft Beverage Industry

1. Food Integration in Coffee Shops – Nearly 50% of specialty café revenues now come from food offerings, redefining cafés as complete dining experiences.
2. Location, Music, and Subculture as Brand Differentiators – Themed cafés with niche experiences, such as vinyl nights and finance cafés, are helping brands build stronger identities.
3. Rise of Experiential Coffee Culture – Coffee shops are becoming social hubs, replacing bars with events like coffee raves and non-alcoholic meetups.
4. Growing Demand for Alternative Milk and High-Caffeine Options – Plant-based milks, high-caffeine, and sugar-free beverages are gaining traction.
5. Health and Wellness-Focused Beverages – Functional drinks like protein coffees, MCT-infused beverages, and low-calorie formulations are on the rise.
6. Expanding Market for Hard Kombucha and Non-Alcoholic Alternatives – Kombucha is gaining popularity both as a standalone health drink and as a sophisticated cocktail mixer.
7. Surge in Demand for Clean-Label Beverages – Consumers are prioritizing natural, transparent ingredient lists, pushing brands toward clean-label formulations.

The Future of Healthy Beverages in India

The Indian beverage market is experiencing a health revolution, with increasing demand for sugar-free, probiotic, and plant-based drinks. However, brands face challenges such as high production costs, taxation on sweet-tasting drinks, and distribution barriers. Despite these hurdles, the market is ripe for disruption by brands that emphasize affordability, innovation, and transparency.

“When we started, we needed a few things in place: access to capital, regulatory compliance, and a clear brand voice,” said Kidambi. “There is huge potential for new entrants in the kombucha space, as well as for brands that push the health wave forward.”

Winning Strategies for Beverage Brands

In a highly competitive space, strong branding, compelling storytelling, and strategic differentiation are key to success. Entrepreneurs must focus on authenticity and create unique narratives that resonate with consumers.

“People want to drink or consume a product that has a legit story,” said Aneesh Bhasin. “Beyond a point, marketing fluff fades away, and your product must speak for itself.”

Rahul Reddy added, “To have a successful coffee business, one must focus on elements beyond coffee itself. For example, at Subko, we focus on vinyl records and subcultural activities, which help create a unique consumer experience.”

Tier-2 Cities: The Next Beverage Boom

With lower competition, affordable real estate, and a rising appetite for premium experiences, India’s Tier-2 cities present a lucrative growth opportunity for beverage brands. Entrepreneurs can leverage lower operational costs to invest more in customer engagement and early market penetration.

Advice for Aspiring Beverage Entrepreneurs

The panelists shared their top insights for competing with established brands and succeeding in the craft beverage industry:

1. Compete on Quality and Transparency – Stand out by offering premium, well-sourced, and transparently labeled products.
2. Focus on Customer Experience – Personalized interactions and high-quality service create a competitive edge over mass-market brands.
3. Balance Innovation with Financial Discipline – Start small, scale gradually, and ensure long-term sustainability.
4. Leverage Local Market Insights – Understanding regional preferences gives homegrown brands an advantage over global players.
5. Create a Strong Brand Identity – Differentiation through storytelling, branding, and unique product offerings is crucial.

“India has around 5,000 branded coffee shops and an equal number of non-branded ones, generating net sales of approximately a billion rupees. For new entrants looking to break into the beverage space, a multiversal café—where customers can choose from a variety of coffee roasters—could be a strong differentiator,” said Matt Chitharanjan.

Crafting India’s Beverage Revolution

The Indian craft beverage industry is on the brink of a major transformation, presenting unprecedented opportunities for entrepreneurs and investors. Whether through specialty coffee, kombucha, tonic water, or functional health drinks, there is immense scope to build successful, homegrown beverage brands that cater to both Indian and global consumers. As innovation, consumer awareness, and market demand continue to grow, India is set to redefine its beverage landscape in the coming years.