Blue Tokai revenue surges 70% in FY23


Specialty coffee brand Blue Tokai saw its total expenses balloon to Rs 166 crore in FY23 from Rs 90 crore in the previous fiscal primarily on account of an increase in costs pertaining to raw materials, employee salaries, and rents.

Blue TokaiETtech
Blue Tokai cofounders (from left) Shivam Shahi, Namrata Asthana, Matt Chitharanjan

Operating revenue of specialty coffee brand Blue Tokai, which is backed by the likes of A91 Partners and actor Deepika Padukone’s Ka Enterprises, jumped more than 70% to Rs 127 crore on-year for FY23.

The Gurugram company net loss rose 3.5 times to Rs 43 crore in the year ended March 2023, as the company expanded its footprint significantly in a market where it’s vying with venture-backed players like Third Wave Coffee and large firms such as Starbucks India and Cafe Coffee Day.

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Blue Tokai’s total expenses ballooned to Rs 166 crore in FY23 from Rs 90 crore in the previous fiscal primarily on account of an increase in costs pertaining to raw materials, employee salaries, and rents, regulatory filings sourced from Tofler showed.

In the last one year, the company opened more than 30 stores with the current footprint being around 92 outlets. Almost two-thirds of Blue Tokai’s revenue comes from its cafes.

Blue Tokai operates through three verticals: physical cafe stores, ecommerce and marketplace channels, and business-to-business (B2B) services.

The company operates in India and Japan, with four roasteries and a network of physical outlets in cities such as Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Kolkata, Chandigarh, Mohali, and Pune, along with regular pop-ups in Tokyo.

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The company’s raw material costs in fiscal 2023 came in at Rs 50 crore, almost double of Rs 26 crore recorded under this head in FY22. This was in line with the rising input costs witnessed by most companies in the food and beverages space on account of sustained high inflation rates.

Blue Tokai’s employee benefit expenses also nearly doubled in FY23 to Rs 43 crore from Rs 22 crore a year prior, while its rent costs increased by a similar clip to Rs 17 crore in FY23 from Rs 9 crore in FY22.

In January last year, Blue Tokai announced a $30 million fundraise led by A91 Partners. At the time, the company had said it planned to add 200 stores over a three-year time frame. The fundraise took Blue Tokai’s total amount raised in external capital to $46 million.

A brewing segment

The firm’s rival Third Wave Coffee, which runs more than 100 outlets in the country, raised $35 million led by private equity firm Creaegis in September. At the time, ET had reported that the Bengaluru-based quick-service restaurant (QSR) chain was clocking Rs 300 crore in annualised revenue run rate. Later in December, the firm laid off at least 10% of its employees across various verticals.

In September tech-enabled specialty coffee chain Abcoffee secured $2 million in a seed funding round led by venture capital firm Tanglin Venture Partners. Other companies operating in this space include Slay Coffee, which is backed by Fireside Ventures, Alteria Capital and Faasos-parent Rebel Foods; Sleepy Owl Coffee; Hatti Kaapi; and Rage Coffee.

Legacy players such as Starbucks India and Cafe Coffee Day have also seen growth in a sector that experts say is witnessing increased consumption. In the first half of fiscal 2023-24, Coffee Day Enterprises, the parent of Cafe Coffee Day, reported an 18% year-on-year rise in its operating revenue to Rs 481 crore with net profit of Rs 31 crore in the period.

ET reported in January that Starbucks CEO Laxman Narasimhan said that the company will open one new cafe every third day in India to have 1,000 stores by 2028.

The US-headquartered company’s Indian unit, a joint venture with Tata Consumer, runs around 400 cafes in India. In FY23, Tata Starbucks crossed revenue of Rs 1,000 crore for the first time since it set up shop in 2012.

India is also saw other global players such Canada’s Tim Hortons and British brand Pret A Manger entering the coffee-QSR segment.

Harry Byrne

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