Founded in 2019, the brand closed FY 2024 with revenue of approximately Rs 60 crore and aims to double this figure by FY26
Bengaluru: In India, which ranks fourth globally in tea consumption and 16th in coffee consumption, the demand for cafés remains insatiable. Recognising this opportunity, a wave of new-age café chains has emerged over the past decade.
Roastea is one among these, an omnichannel beverage brand founded in 2019 by lawyers-turned-entrepreneurs and brother-duo Anurag and Chaitanya Bhamidipaty.
The company initially focused on developing vending machines to address the lack of quality beverage options in corporate offices. Two years later, it expanded into the café and quick-service restaurant (QSR) space.
Kicking off with vending machines
Both founders, law graduates from Gujarat National Law University, began their careers in 2016 as capital market lawyers. During their three-year tenure, they identified a gap in the market for vending machines that offered flavourful and healthy hot and cold beverage options.
“The office had machines for coffee and tea, but the quality was disappointing—either outdated cappuccino machines or unhealthy premixed options. To keep up with our long working hours, we constantly searched for better beverage options, and that’s when the idea struck—what if we ventured into the vending machine business,” says Co-Founder Chaitanya Bhamidipaty to IndiaRetailing in an exclusive interaction.
They saw potential in the market, with existing big players but clear room for innovation. After months of business plan, refining supply chain and conducting samplings, with a capital of Rs 1 crore, they set up a small-scale factory with the capacity to produce just 10–15 machines per month.
Today, the company operates a 10,000 sq. ft., state-of-the-art factory in Bengaluru, producing around 250 machines per month. Most of its customers are IT, pharmaceuticals, multinational corporations, and co-working spaces.
Starting with 20 options five years ago, its vending machines currently dispense over 45 beverages, including chai, coffees, green teas, hot chocolate, and soups.
Venturing into the café space
“Most Indian brands were either exclusively chai-focused or coffee-focused. Customers were hesitant to trust a coffee brand offering chai or a chai brand introducing coffee. Recognising this, we created Roastea—where ‘Roast’ represents coffee and ‘Tea’ stands for chai—ensuring we provided the best of both beverages,” says Chaitanya.
In June 2021, Roastea launched its first kiosk at Ahmedabad Airport, marking the beginning of its exclusive café ventures. Later that year, it expanded further by opening its first café in a high street of Ahmedabad.
Choosing the right format
The brand currently operates three store formats:
- ‘on-the-go format’, for high-footfall areas such as airports, food courts, highways, and metro stations, offering a selection of beverages and centrally prepared food;
- ‘cafe format’, spanning 900 – 2,000 sq. ft. with a kitchen for meals;
- ‘bungalow project, a 9,000 sq. ft. flagship concept with a heritage-inspired ambiance, with live baking stations.
In the on-the-go format, the menu includes over 75 stock keeping units (SKUs) and in the cafes, the selection expands to over 170 SKUs. Meanwhile, the bungalow project offers an extensive menu with over 100 beverage SKUs and a food selection featuring more than 200 SKUs.
As of now, the brand operates over 15 outlets across Bengaluru, Ahmedabad and Dehradun.
The founders prefer the franchise-invested, company-operated (FICO) model for its outlets because traditional franchise models in the QSR business often lack long-term sustainability.
“Running an outlet requires strict oversight on everything—from product quality and staffing to marketing—without room for compromise. Success demands patience, as customer loyalty takes years to build and is difficult to regain in today’s competitive market. That’s why we prioritise maintaining full control over operations,” Chaitanya explains.
Omnichannel first
In addition to its vending machine business and café chain, the company operates a direct-to-consumer (D2C) e-commerce platform for selling its coffee and tea powders. It also plans to expand its reach by listing products on quick commerce platforms soon.
Moreover, Roastea’s café outlets offer delivery services through food aggregators like Zomato and Swiggy. Currently, dine-in contributes 70% of the business, while delivery accounts for 30%.
“I expect this ratio to shift further, aiming for dine-in to reach 90% and delivery to settle at 10%. While delivery drives volume and is likely to grow steadily, an increase in footfall will naturally lead to more orders. However, I firmly believe that dine-in should always remain the core of our business,” says Chaitanya.
Within its exclusive outlets, the brand has introduced innovations like a QR code menu, allowing customers to place orders directly from their phones, which are sent straight to the kitchen and delivered to their table without human interaction.
Additionally, it is integrating AI into CCTV cameras to monitor table turnover time, staff performance, cash transactions, employee attendance, and customer satisfaction. “By converting CCTV footage into actionable data, we can analyse and enhance operations for greater efficiency and service,” he added.
Goals for expansion
“Going forward, we aim to establish a flagship bungalow project in every metro city, expand café presence across tier-2 and tier-3 cities, and place on-the-go outlets in high-traffic locations to maximise reach and customer engagement,” Chaitanya states.
By the end of FY 2026, the company plans to launch 15 flagship outlets in tier-1 cities and approximately 100 premium café outlets across India over the next five years.
For now Roastea favours opening cafes in high street locations. “Our analysis shows that while malls have high chai consumption, cafés struggle to stand out near fine dining options. High streets offer more flexibility, but malls become ideal once a brand gains recognition—typically after 8 to 10 years—when strong brand recall drives footfall,” he adds.
Roastea closed the fiscal year (FY) 2024 with revenue of approximately Rs 60 crore and aims to double this figure by FY26.
“We have been experiencing year-on-year (YoY) revenue growth of 2.5 to 3 times and currently maintain an annual recurring revenue (ARR) of around Rs 100 crore. Over the next three years, we target a topline of Rs 350 crore, with EBITDA margins of 25-30%,” Chaitanya notes.
The company also plans to enter e-commerce marketplaces and is currently strengthening its backend operations. It is in active discussions and aims to execute this expansion in the first quarter of the next financial year.
The post From vending machines to café chain: Roastea eyes 100 outlets in 5 years, Rs 350 crore in 3 years appeared first on India Retailing.
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