Nikhil KamathEp #22 | WTF are Craft Beverages? Nikhil ft. the Founders of Blue Tokai, Subko, Svami, and Mossant
CHAPTERS
- 0:00 – 1:25
What counts as a “craft beverage” and what viewers should learn from this panel
Nikhil sets the premise: a practical, founder-to-founder conversation for anyone considering a coffee shop, kombucha brand, or mixers business. The tone is informal, but the goal is to extract real playbooks—product, pricing, distribution, and differentiation.
- •Episode intent: actionable learnings for aspiring F&B founders
- •Craft beverages framed through entrepreneurship, not just taste
- •Panel format: founders challenge each other’s assumptions
- 1:25 – 4:33
Blue Tokai’s origin story: Matt’s upbringing, career pivots, and discovering specialty coffee
Matt shares a cross-cultural upbringing (US/India) and a non-linear career path through finance, development work, and research. Specialty coffee becomes a serious interest once he experiences third-wave culture in San Francisco and starts roasting as a hobby.
- •Half-Indian background and early life in the US
- •Finance and international development work before coffee
- •Specialty coffee realization: coffee can be more than functional caffeine
- •Roasting starts as a hobby, then becomes a serious obsession
- 4:33 – 7:49
Starting Blue Tokai from a bedroom: sourcing, early roasting, and building India’s specialty demand
Matt explains how Blue Tokai began in 2012 without a formal business plan—initially for self-consumption. The key unlock was convincing Indian producers to sell export-grade lots domestically and proving consumers would pay for quality.
- •Delhi’s poor coffee scene in 2012 created an opening
- •Direct farm visits to access export-quality coffee
- •Early operations: tiny tabletop roaster, manual packing and grinding
- •Core belief: Indians would learn to value specialty coffee without cutting quality
- 7:49 – 20:05
Mossant’s founder journey: Adithya’s culinary background and how kombucha became a business
Adithya recounts growing up in Bangalore, abandoning engineering, and committing to culinary training in Australia. Kombucha starts as a health experiment by his partner, then becomes Mossant—positioned as a tastier, more accessible ‘better soda’ using Indian teas.
- •Engineering detour → culinary training and F&B consulting
- •Early entrepreneurship: owning/running a Bangalore café
- •Kombucha starts through gut/skin-health motivations
- •Mossant brand name tied to a late friend and a meaningful artifact
- •Initial challenge: low awareness + polarized reactions to “funky” kombucha
- 20:05 – 21:35
Blue Tokai at scale: revenue run-rate, city mix, and why Japan happened
Matt shares Blue Tokai’s scale and where demand concentrates across Indian metros. The panel unpacks Japan as an opportunistic expansion—showcasing Indian coffee in a major coffee-consuming market—while still seeing India as the bigger upside.
- •Blue Tokai scale: ~₹400cr run rate and ~135 outlets
- •City contribution breakdown (Delhi/Mumbai lead)
- •Japan: investor-led entry + market logic (large coffee consumption, third-wave growth)
- •Consensus: India remains the most attractive growth market
- 21:35 – 27:37
Aneesh’s path into beverages: photography → wine → product obsession
Aneesh describes an army upbringing across India, skipping college, and becoming a professional photographer. Work with alcohol brands and wineries deepens his appreciation for beverages as intentional consumption—and becomes the bridge into building beverage products.
- •Army family upbringing and frequent relocations
- •No college: professional photography straight after school
- •Alcohol/wine assignments became a practical education in taste and craft
- •Beverages shift from “gulping” to intentional consumption and category curiosity
- 27:37 – 42:40
Subko’s origin: Rahul’s diaspora identity, returning to India, and building a global-Indian brand
Rahul explains growing up in the US, navigating cultural identity, and how a formative stint in Bangalore strengthened his connection to India. Subko emerges from a desire to build something world-class rooted in Indian agricultural supply chains (coffee/cacao) and cultural design language.
- •Diaspora experience: shame, assimilation pressures, then embracing roots
- •Bangalore years: language, belonging, and ‘India linkage’ that shaped choices
- •Thesis: credibility requires committing to farms, producers, and the soil
- •India as “underdog producer”: large output but low global mindshare
- 42:40 – 47:54
Subko vs Blue Tokai: mass-premium vs niche-premium, and why design + bakery matter
The founders compare positioning: Blue Tokai as more accessible ‘mass premium’ and Subko as a more niche, design-forward experience. Rahul frames Subko’s differentiation as a blend of deep design language and baked goods built to match the coffee program, later extending into chocolate.
- •Positioning split: accessible scale vs niche experiential premium
- •Storytelling and “constructed brand world” as a competitive edge
- •Value-add strategy: design language + bakehouse as a co-equal pillar to coffee
- •Product expansion: chocolate and broader craft portfolio
- 47:54 – 1:04:26
How a new café can compete next door: multi-roaster, subculture, events, and menu economics
Nikhil pressure-tests the founders with a scenario: a new café opening beside Blue Tokai and Subko. The discussion moves beyond beans into differentiation through subculture (music/vinyl), community events, signature food, and operational realities like kitchen complexity and repeat-consistency.
- •Differentiation ideas: multi-roaster model, unique food, subcultural hooks
- •Food is a major revenue driver (often ~50% of sales)
- •Operational constraints: hot kitchens increase complexity and staffing challenges
- •Consistency matters most for repeat-heavy cafés
- •Coffee shops increasingly compete as cultural venues, not just beverage counters
- 1:04:26 – 1:26:58
How big is craft coffee really? Market size, caffeine behavior, Starbucks in India, and pricing ceilings
They estimate the branded café universe and discuss what truly drives footfall: space, meetings, and habit—not just health claims. Starbucks becomes a case study in India’s real-estate economics and ‘sit-and-stay’ behavior, while the group debates price sensitivity and tier-2 expansion.
- •India estimates: ~5,000 branded coffee shops (plus similar unbranded)
- •Coffee shop demand drivers: place to sit/meet, habit, caffeine correlation
- •Starbucks India: large scale but profitability challenged by prime rents + long dwell times
- •Price psychology: consumers notice price changes more above ~₹250
- •Tier-2 cities seen as more underserved (and potentially easier entry)
- 1:26:58 – 1:33:20
Palate shifts and ‘health-first’ coffee concepts: black coffee growth, sugar limits, and alt-milk reality
The panel explores how Indian preferences are evolving—slowly—toward less sugar and more black coffee, while still acknowledging mass-market sweetness. They debate whether a ‘healthiest café’ can win, and share surprising stats on alternative milk adoption and growth in pour-over demand.
- •Sweet preference persists, but black coffee/pour-over demand is rising
- •Subko data point: strong year-on-year growth in black coffee orders
- •Alternative milk split: small at scale for some brands, much higher in certain neighborhoods
- •“Health café” angle: protein coffees, calorie caps, and functional positioning
- •Coffee as ritual + hobby becomes a long-term retention driver
- 1:33:20 – 1:44:01
Kombucha explained simply: SCOBY, fermentation, alcohol limits, and what ‘healthy’ really means
Nikhil shifts the episode to kombucha fundamentals: what it is, how it’s made, and why it’s regulated. Adithya explains fermentation mechanics (yeast creates alcohol, bacteria consumes it) and reframes health claims as ‘better replacement’ rather than a miracle drink.
- •Definition: fermented sweetened tea using a SCOBY (bacteria + yeast)
- •Fermentation basics: sugar → alcohol/CO₂/acids → alcohol reduced by bacteria
- •Regulatory constraint: must stay under 0.5% ABV to avoid excise
- •Health positioning: better than mainstream soda, but water remains best baseline
- •Taste strategy: balance ‘funk’ with broader Indian palate acceptance
- 1:44:01 – 1:59:55
Kombucha market reality in India: size, pricing, quick-commerce dependence, and the ‘better soda’ thesis
They quantify kombucha as a small but fast-growing category in India and unpack why distribution matters more than idealistic premiumization. Adithya shares how price drops can spike volume, why quick commerce is pivotal for discovery, and how brands must build habitual consumption.
- •India kombucha market estimate: ~₹200cr (vs multi-billion in the US)
- •Mossant’s pricing strategy and the volume jump when moving to sub-₹100
- •Quick commerce as a dominant channel for new categories (and its commission reality)
- •Consumer use-case: ‘replace my fizz’ rather than ‘become super healthy’
- •Long-term thesis: build a broader “better-for-you soda” platform
- 1:59:55 – 2:21:59
The hard parts of beverages in India: 40% taxation, policy oddities, bottling/canning constraints, and why this blocks innovation
The founders argue that India’s tax structure punishes carbonated sweet beverages with a flat 40% burden, regardless of sweetener type, creating perverse incentives. They also describe practical supply-chain moats—bottling, cans, minimum order sizes, contract manufacturing consolidation—and how these realities shape go-to-market decisions.
- •Tax shock: carbonated + sweet triggers ~40% GST, often on MRP-inclusive basis
- •Policy critique: blanket ‘sweet’ classification discourages healthier formulations
- •Comparison: UK-style sugar slabs vs India’s broad-brush approach
- •Packaging economics: bottles/cans can be among the largest per-unit costs
- •Manufacturing access risk: contract manufacturers/bottlers being tied up by larger players
- 2:21:59 – 3:25:44
Svami’s journey and the broader non-alc opportunity: HoReCa strategy, quick commerce risks, and the practical startup checklist
Aneesh explains how Svami started as a Schweppes alternative but evolved into a broader non-alcoholic platform with India-forward provenance and export ambition. The group then gets tactical: how to get listed in bars/restaurants, why brand pull beats price wars, how quick commerce can both accelerate and squeeze brands, and what it actually costs to start a café (space, staffing, equipment, and service).
- •Svami origin: fixing the ‘mixer problem’ and building a proud India provenance brand
- •HoReCa playbook: side-by-side tastings, win via product, then earn ‘asked-by-name’ demand
- •Quick commerce: powerful for convenience but dangerous as a single growth pillar
- •Starting a café: typical capex ranges, optimal sizing (~800–1,000 sq ft), staffing pay bands
- •Equipment stack + service: La Marzocco/Linea-class machines, distributor support, and why local serviceability matters
