Vintage Coffee & Beverages announced on August 31, 2026, the launch of a new product segment focused on Roasted & Ground (R&G) coffee. The company aims to target premium in-home consumption and expand its presence in the United States and Europe.

The expansion is part of the company’s broader premiumisation strategy, which also includes its entry into freeze-dried coffee (FDC). To support this initiative, Vintage Coffee has installed a modern roaster designed to provide unique roasting profiles for R&G coffee connoisseurs.

Strategic Market Outlook

Tati Balakrishna, Chairman and Managing Director, highlighted the growth potential of the global R&G market. He noted that the sector was estimated at USD 101.75bn in 2026 and is projected to reach USD 159.46bn by 2035, representing a compound annual growth rate (CAGR) of 5.12%.

The company cited post-pandemic trends driving increased home brewing as a key factor for this expansion. Additionally, global café chains are increasingly focusing on R&G coffee, further validating the strategic move.

What the Numbers Show

The disclosed market figures indicate a significant addressable opportunity for the company. With the global market expected to grow by nearly USD 58bn over the next nine years, entering the R&G segment allows Vintage Coffee to tap into high-value geographies like America, one of the largest consumers of R&G coffee worldwide. This shift from bulk or instant products to roasted variants suggests a deliberate move up the value chain to capture higher margins associated with premium branding and specialized processing.

Vintage Coffee & Beverages reported a robust 58% year-on-year rise in consolidated revenue to ₹161.00 crore for Q1FY27, driven by full utilization of its expanded manufacturing capacity and strong export demand. The company’s profit after tax (PAT) grew 46% to ₹20.79 crore, while EBITDA jumped 75% to ₹31.60 crore. Chairman & Managing Director Balakrishna Tati highlighted that the merger of subsidiaries Vintage Coffee Private Limited and Delecto Foods Private Limited, approved by the NCLT and effective August 3, 2026, will further streamline operations. The management also provided clear visibility on future growth, guiding for total FY27 revenues between ₹850 crore and ₹900 crore at current price levels.

The financial results were reviewed by statutory auditor S. Bhalotia & Associates, which issued an unmodified limited review report. The Board of Directors approved the unaudited results on July 29, 2026, in compliance with SEBI LODR Regulations 30 and 33. The earnings conference call, held on August 3, 2026, was moderated by Nuvama Wealth and attended by CFO Kranthi Kumar Yarkali and Head of Sales Jawahar Conjeevaram. The company emphasized that its recent capacity expansion was funded entirely through internal accruals, reflecting disciplined capital allocation.

Operational Metrics and Volume Growth

Management disclosed specific operational metrics during the conference call, providing greater transparency into production efficiency. The company produced 2,402 metric tons in Q1FY27 but sold only 1,856 metric tons, building inventory to meet higher demand in subsequent quarters. This strategy is typical for the lean summer period (April–June), with volumes expected to pick up from Q2 onwards. The EBITDA per kilogram stood at ₹157 for coffee products, excluding chicory sales.

The subsidiary Delecto Foods, focused on chicory products, generated ₹42–45 crore in annual revenue with margins comparable to or slightly better than coffee due to current supply shortages. The amalgamation will not alter consolidated figures as Delecto is a wholly-owned entity, but it will reduce administrative overheads.

Capacity Expansion and Freeze-Dried Coffee Strategy

Vintage Coffee has fully utilized its existing 11,000 MTPA installed capacity, including the 4,500 MTPA expansion commissioned in March 2026. Management confirmed that this additional capacity operated at 90–95% utilization in Q1FY27. Looking ahead, the company is progressing with a new Freeze-Dried Coffee (FDC) plant with an installed capacity of 5,500 MTPA. Construction has commenced, with ₹114 crore spent to date out of a total project cost of ₹550 crore.

The FDC facility is expected to be ready by mid-2027, with trials completing by June 2027 and commercial production starting in Q2FY28. Management secured Letters of Intent (LOIs) covering 70–80% of the initial 5,500 MTPA capacity from existing and new customers in Russia, Europe, Southeast Asia, and the US. FDC is projected to yield 28–32% higher EBITDA per kg compared to spray-dried coffee, potentially lifting consolidated EBITDA margins to 23–24% over the next two years.

What the Numbers Show

The divergence between production (2,402 MT) and sales (1,856 MT) indicates strategic inventory buildup ahead of peak seasons, mitigating immediate price volatility risks through back-to-back procurement. The high customer retention rate of 98%, driven by proprietary blends developed in-house, provides a competitive moat against larger global players. With working capital days stable at 120–130 days and positive operating cash flow expected for FY27, the company is well-positioned to fund Phase 2 of its FDC expansion without equity dilution, targeting a peak debt level of ₹450 crore.