India’s coffee shops are leveraging craft pastries
Sarah Charles
December 12, 2025
India’s café market is set to double by 2030, pushing coffee shops to seek new profit engines beyond coffee
Pastry-led innovation is booming, from ₹330 croissants to viral “crookies,” reshaping how cafés differentiate and drive margins
Specialty coffee shops/craft bakehouses like Subko are turning pastries into India’s next big F&B export
INDIA’s specialty coffee scene has come of age. But the newest symbol of its ambition, beyond its coffees, is fancy artisanal baked goods and cakes.
From shiny, almost-too-perfect croissants to “brookies” and “crookies” engineered for Instagram virality, a new cohort of Indian cafés is building its brand on fancy pastries. Exceptional, specialty coffees have been helpful to a minority of roasters trying to differentiate themselves. Adding pastries to the menu, however, is more of a full-scale shift in value creation across the industry.
India’s coffee market is forecast to double by 2030, with revenues from coffee shops rising at nearly twice the pace of their American counterparts – a sign of both growing affluence and an evolving urban palate. If coffee is the reason customers walk in, pastries are now the reason they stay and spend.
In wealthy economies, cafés once relied on their core product, anything ranging from a great cappuccino to an ethical supply chain or even a knack for latte art. Like in other emerging coffee markets – China for example – India skipped that era. As specialty – or at least premium – coffee leapfrogged from novelty to mainstream in major cities and even in small north Indian towns and cities, standing out required more than fresh-roasted beans and a V60 bar.
Chains like Blue Tokai helped build consumer literacy. But once a critical mass of urban Indians knew what a flat white was, the category became crowded and price-sensitive. Recent rising coffee prices also meant the premium and specialty coffee segment ran the risk of becoming too inaccessible. If everyone could serve decent coffee, differentiation had to come from elsewhere.
Enter the pastry revolution.
Subko, the Mumbai-born brand that blends Japanese modernism with Indian nostalgia, illustrates the shift best. Its cafés are half-roastery, half-bakehouse. The pastry menu is not a side act, but at the heart of its operations. Their 27-layer croissants and New York-style cookies have soared in popularity. A high demand, paired with a “small-batch” production philosophy, means availability can be limited, inciting customers to order online or arrive early.
The economics are compelling. Coffee margins are high, but volume is limited. A ₹330 croissant – once unthinkable – normalises premium pricing and pushes average order values higher. People may balk at paying twice as much for a cappuccino. They happily do so for a pastry that doubles as a status symbol.
“We maintain a strictly vertical supply chain, which allows us to ensure quality and cost-control,” says Sumit Sen, Brand and Communications Lead at Subko Coffee.
“This level of control is fundamental to maintaining product quality and consistency as we scale. The combination of high-quality specialty coffee paired with innovative viennoiseries significantly increases the average spend per customer. By maximising the profitability of the baked goods, we create a more robust and scalable business model that protects margins from the competitive pricing pressures of a ‘mainstream’ F&B market.”
“The viennoiserie programme, for example, is built on Indian raw materials and incorporates Subcontinental flavours with classic pastry techniques – including podi, haleem, and other regional inspirations – all interpreted with Subko’s sourdough and laminated foundations.”
India has witnessed a sudden rise of artisan bakers and skilled chefs in the bakery sector. India is unusually well-positioned for pastry innovation. In Europe, dedicating multiple staff to lamination would be prohibitively expensive. In Mumbai or Bengaluru, a skilled pastry team remains affordable enough to justify craftsmanship.
Aesthetic culture does the rest. A pastry that photographs beautifully with flaky layers, glossy ganache, gold leaf, or intricate patterns becomes free advertising.
The rise of the café-bakehouse hybrid
India’s emerging café culture is no longer about the beverage alone. It has evolved into a craft ecosystem.
New-wave cafés increasingly look like hybrid workshops: espresso machines upfront, flour sacks and proofing cabinets in full view. The message is deliberate – artisanal production, not industrial convenience. Even “bakery tourism” has become a thing.
Other brands have noticed. Delhi’s Roastery Coffee House, for example, has expanded their food programme. Full in-house bakeries are replacing outsourced muffins and defrosted Danish. The logic is not merely about quality; it’s strategic.
“With rising disposable incomes in urban centres, there is a sustained and rapidly growing demand for premium, experiential food and beverage,” says Sumit.
“This market is ready to pay for quality, traceability, and craft. The hybrid model significantly increases our average order value and profitability. A customer purchasing a specialty coffee is often prompted to add a food item, like a croissant, making cross-vertical integration resilient and scalable.”
“This operational blueprint, piloted in Mumbai and scaled across Bangalore, Delhi, and, now, internationally in Dubai, demonstrates the inherent potential for a homegrown Indian craft brand to achieve both domestic growth and international recognition.”
The risk is that the high prices these products command become a deterrent for customers – an inevitable conclusion for some.
There is also a localisation story unfolding. Like at Subko, even the most European-looking treats are increasingly rooted in Indian ingredients: jaggery caramel, kesar mascarpone, Malabar vanilla. In a country where culinary pride is high, this matters. Imported French identity only goes so far; a distinctly Indian patisserie vocabulary is an important requirement for success.
A global trend – uniquely Indian economics
Coffee’s role as the fuel of productivity has made cafés a fixture of middle-class life worldwide. But their revenue model is increasingly vulnerable.
In the United States and Western Europe, coffee chains face shrinking margins as wholesale prices climb and competition intensifies. Labour costs have soared. Food programmes are expensive to scale.
India’s economics run in the opposite direction. Labour is more affordable. Space is tight but high-density cities generate dependable footfall. Domestic wheat production keeps ingredient costs manageable. The combination enables a high level of craft at commercially viable prices. Social media finishes the equation. A pastry that appears in 500 Instagram Reels has already paid for its own marketing.
As coffee becomes democratised and commoditised, the battlefield of premiumisation shifts to pastry. India’s cafés understand that while coffee is the draw, pastry is where brands can profit.
Other international brands are also paying attention to this winning combo. Boutique roasters across Southeast Asia are also applying this model. Even in mature markets, smaller cafés are adopting theatrical bake displays.
India’s café-bakehouses may prove to be the next global export for both their coffee and their croissants. Pastries have become a strategic asset and a cultural statement, a model through which Indian cafés define their identity and capture their margins.
“We believe that an Indian café–bakehouse model, that is rooted in the Subcontinent, such as ours, has strong potential to succeed internationally,” says Sumit. “We’re hoping our latest outpost in Dubai proves this thesis.”
“Such models bring together three globally relevant pillars: craftsmanship, cultural storytelling, and hospitality. Audiences, regardless of geography, are increasingly drawn to concepts that go beyond transactional dining, and the café–bakehouse format offers exactly that. The model is exportable because it offers not just products, but a perspective: a contemporary, craft-led expression of the Global South. In global markets looking for originality, depth, and meaning, that story travels exceptionally well.”
In a country that has leapt from instant coffee to specialty culture in a single generational stride, it is perhaps fitting that its cafés are no longer just places to drink coffee – but third spaces built to impress, taste and post.
Coffee Intelligence