Nikhil KamathEp #22 | WTF are Craft Beverages? Nikhil ft. the Founders of Blue Tokai, Subko, Svami, and Mossant
Nikhil Kamath and Matt Chitharanjan on founders unpack India’s craft beverages: coffee, kombucha, tonics, growth..
In this episode of Nikhil Kamath, featuring Nikhil Kamath and Matt Chitharanjan, Ep #22 | WTF are Craft Beverages? Nikhil ft. the Founders of Blue Tokai, Subko, Svami, and Mossant explores founders unpack India’s craft beverages: coffee, kombucha, tonics, growth. Nikhil Kamath hosts founders/leaders from Blue Tokai (Matt Chitharanjan), Subko (Rahul Reddy), Mossant (Adithya Kidambi), and Svami (Aneesh Bhasin) to define and demystify “craft beverages” in India.
At a glance
WHAT IT’S REALLY ABOUT
Founders unpack India’s craft beverages: coffee, kombucha, tonics, growth.
- Nikhil Kamath hosts founders/leaders from Blue Tokai (Matt Chitharanjan), Subko (Rahul Reddy), Mossant (Adithya Kidambi), and Svami (Aneesh Bhasin) to define and demystify “craft beverages” in India.
- They trace personal journeys into beverages, then get highly practical: how to open a café, where profits come from (food vs beverages), what differentiates brands once “good coffee” becomes baseline, and why Tier-2 India is still underserved.
- The conversation expands into kombucha and mixers: fermentation basics, consumer education, the role of quick commerce, market sizing, export potential, and why India’s beverage GST/tax rules can discourage innovation.
- A recurring theme is that enduring moats come from product quality + distribution + authentic storytelling (not “India’s first”), while culture (community events, subculture, design) increasingly drives footfall as younger consumers drink less alcohol and spend more time in cafés.
IDEAS WORTH REMEMBERING
5 ideasIn India, cafés are food businesses as much as coffee businesses.
Both Blue Tokai and Subko cite ~50/50 revenue splits between food and beverages, meaning menu design and operational consistency matter as much as roast quality for unit economics.
Differentiation is shifting from “better coffee” to culture, identity, and experience.
Subko argues that as coffee culture matures, good coffee becomes the minimum; brands win via subcultural hooks (vinyl, events), design language, and unique beverage formats (coffee “speakeasy” cocktails).
A hot kitchen can raise average checks, but talent/consistency become the real bottleneck.
Blue Tokai notes hot kitchens can increase APC, yet retaining strong kitchen staff and maintaining consistency is hard—hence central kitchens + make-lines are often preferred.
India’s coffee market is still shallow relative to demand—especially outside metros.
Matt estimates ~5,000 branded coffee shops (plus a similar number unbranded), implying a large whitespace, particularly in Tier-2 cities where options are fewer and the category is underpenetrated.
Opening beside incumbents can help—coffee clusters can expand total demand.
Blue Tokai observes that when multiple cafés open near each other, the area can become a destination and all players may benefit (unlike restaurants where queues concentrate demand).
WORDS WORTH SAVING
5 quotesAnybody who wants to learn or who's keen on starting a coffee shop, a kombucha brand, sell tonic… should learn something here and go away with that.
— Nikhil Kamath
We’re at a four hundred crore run rate.
— Matt Chitharanjan (Blue Tokai)
We try to be more accessible… they’re more niche premium.
— Matt Chitharanjan (comparing Blue Tokai vs Subko)
You have to have a key focus on shit that has nothing to do with coffee or food.
— Rahul Reddy (Subko)
Kombucha is essentially vinegar. It’s tea vinegar.
— Adithya Kidambi (Mossant)
QUESTIONS ANSWERED IN THIS EPISODE
5 questionsBlue Tokai: What exactly constitutes the ₹400 crore run-rate—café sales vs retail beans vs B2B wholesale—and which is growing fastest?
Nikhil Kamath hosts founders/leaders from Blue Tokai (Matt Chitharanjan), Subko (Rahul Reddy), Mossant (Adithya Kidambi), and Svami (Aneesh Bhasin) to define and demystify “craft beverages” in India.
Blue Tokai Japan: What specific operational/brand changes were needed for Japan (menu, roast profiles, staffing, sourcing narrative), and what has been unexpectedly hard?
They trace personal journeys into beverages, then get highly practical: how to open a café, where profits come from (food vs beverages), what differentiates brands once “good coffee” becomes baseline, and why Tier-2 India is still underserved.
Subko: You call your approach a “global Indic design language.” What are the concrete design principles/rules you follow that most brands miss?
The conversation expands into kombucha and mixers: fermentation basics, consumer education, the role of quick commerce, market sizing, export potential, and why India’s beverage GST/tax rules can discourage innovation.
Café economics: If food is ~40–50% of revenue, what are the typical gross margins by category (espresso drinks vs pastries vs sandwiches) and what’s the highest-margin hero item?
A recurring theme is that enduring moats come from product quality + distribution + authentic storytelling (not “India’s first”), while culture (community events, subculture, design) increasingly drives footfall as younger consumers drink less alcohol and spend more time in cafés.
Competing café concept: If you had to launch a new café today with only ₹2 crore and no roasting, what single ‘hook’ would you pick (multi-roaster, fitness/protein, music, cocktails, etc.) and why?
Chapter Breakdown
What “craft beverages” means and why this episode exists
Nikhil sets the tone: this is a practical conversation for anyone curious about starting or understanding modern beverage brands—coffee, kombucha, and non-alcoholic mixers. The panel frames craft as more than a drink: it’s product quality, story, distribution, and culture.
Blue Tokai’s origin story: from finance/dev work to specialty coffee in India
Matt shares his cross-cultural upbringing (US/India) and a winding career path that ultimately led to starting Blue Tokai in 2012. The founding insight was simple: Delhi’s coffee scene was poor, and export-quality Indian coffee could be made accessible domestically.
Mossant’s beginnings: culinary, fermentation, and building kombucha for taste
Adithya describes moving from engineering to culinary school in Australia and restaurant work in Bangalore, then into fermentation. Mossant began in 2019 when kombucha awareness was low and the product was polarizing; their goal was to make it delicious and approachable, not just ‘healthy.’
Svami & Aneesh: photography to alcohol literacy to mixers (and ‘intent’ drinking)
Aneesh traces his unconventional path—skipping college, pursuing photography, then learning beverages through alcohol brand assignments and wine exposure. That journey informed Svami’s founding: a clear white space in premium mixers beyond Schweppes, starting with tonic water as a better base for cocktails.
Subko’s origin: diaspora identity, ‘global Indian’ ambition, and craft as culture
Rahul shares the experience of growing up abroad as an Indian and how it shaped a desire to build something world-class rooted in India. Subko’s thesis centers on agricultural supply chains, design language, and building a cultural symbol—not just selling coffee.
Blue Tokai vs Subko: mass-premium accessibility vs niche-premium design experience
The founders compare positioning: Blue Tokai as more accessible mass-premium, Subko as niche-premium with strong design and bakery integration. They discuss how timing matters—Blue Tokai helped create the market that later, more concept-driven specialty brands could build on.
How a 25-year-old can compete: differentiation beyond coffee quality
They answer a hypothetical: opening a café next to Blue Tokai and Subko. Advice: multi-roaster model, strong food program, and non-coffee differentiators like subculture, music, events, and ‘speakeasy’ coffee cocktails—because quality alone becomes table stakes as the market matures.
Café unit economics & operations: menus, kitchens, space, staffing, delivery
Founders share practical numbers and constraints: the best store size, how hot kitchens affect talent/consistency, staffing wages, delivery share, and what customers notice in pricing. India’s sit-and-stay behavior changes throughput versus the US pickup-heavy model.
Coffee category deep-dive: market size, taste debates, alt milks, and coffee ‘waves’
They quantify the Indian coffee shop landscape and explore how preferences evolve—black coffee growth, cold brew caffeine, and the subjectivity of ‘good coffee.’ Alternative milks show strong neighborhood variance, revealing how local culture changes product mix.
Kombucha 101: SCOBY, fermentation, and what ‘healthy’ really means
Adithya explains kombucha as fermented sweetened tea where yeast creates alcohol and bacteria convert it to acids—kept below 0.5% ABV for FMCG legality. The group clarifies health claims: it’s best framed as a better-for-you replacement for soda rather than a miracle product.
Kombucha market realities: India’s size, pricing experiments, and quick commerce dependence
They estimate India’s kombucha market at ~₹200 crore versus ~$4–5B in the US, implying growth headroom. Mossant’s key insight: price accessibility dramatically expands demand, and quick commerce solved early distribution—though it introduces platform power risks.
Hard kombucha, seltzers, and India’s alcohol-adjacent opportunity (and limits)
They discuss ‘hard kombucha’ and why India may be early: consumers still need to understand kombucha first, and alcohol licensing adds friction. The panel compares with hard seltzers’ muted performance in India, arguing the country favors strong beer and straightforward drinking formats.
Policy and industry moats: India’s 40% tax on sweet carbonated drinks
A major barrier emerges: taxation. Carbonation + sweet taste triggers ~40% GST, which the founders argue blocks innovation and forces brands to reverse-engineer MRP instead of improving product quality. They compare with the UK’s slabbed sugar tax as a more rational model.
Manufacturing, packaging, and the ‘bottling/canning mafia’: scaling constraints for new brands
They explain why packaging and co-manufacturing become bottlenecks: custom bottles require huge MOQs, cans are expensive and technical, and contract manufacturers are being acquired/allocated to larger players. The practical advice is to start with serviceable local machinery and scale up later.
Distribution & growth playbooks: HoReCa, quick commerce, and why performance marketing is contested
All founders emphasize offline discovery—especially restaurants/bars/cafes—as critical for craft beverages. They debate quick commerce sustainability and platform power, and strongly critique performance marketing as generic and short-term, preferring founder-led storytelling, collaborations, and organic brand love.
Closing: favorite spots, investor lens, AI/creativity, and the pro-India brand thesis
They wrap with recommendations for favorite coffee and kombucha brands and reflect on investing in the category. Nikhil shares an investor perspective: coffee’s addictive/ritual nature and geopolitics potentially favoring domestic brands, while AI may increase the premium on true creativity and counter-trend thinking.
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