Ep #22 | WTF are Craft Beverages? Nikhil ft. the Founders of Blue Tokai, Subko, Svami, and Mossant

Four founders trace how finance, photography, diaspora identity and fermentation passions launched Blue Tokai, Subko, Svami and Mossant in India.

Founders' Journeys

• Matt moved from finance and international development to roasting coffee after discovering specialty culture in San Francisco (0:00-10:01).
• Anish's army-family upbringing and photography work led him into beverages via wine and coffee exposure (20:05-30:07).
• Rahul's US diaspora experience and time in Bangalore pushed him to build Subko as a contribution to Indian roots (30:10-40:11).

Coffee Shop Economics

• Beverages deliver 45-50% of revenue while food contributes 40-50%; hot kitchens raise average check but add capex and staffing issues (50:16-1:00:19).
• Differentiation now requires subcultural hooks such as vinyl nights or community events once quality baselines are met (1:00:19-1:10:22).

Kombucha & Regulation

• Kombucha ferments sweetened tea with SCOBY to create organic acids and probiotics; Indian consumers prefer milder, fruit-forward versions (1:30:32-1:40:33).
• 40% flat tax on any sweet beverage and bottling-lobby control of distribution remain the largest barriers to new entrants (2:00:41-2:10:42).

00:00:00Major Topic

Speaker: Nikhil Kamath

• Introduction to the episode: WTF are Craft Beverages? A candid discussion with the founders of Blue Tokai, Subko, Svami, and Mossant. The aim is to extract learnings for anyone wanting to start a coffee shop, a kombucha brand, a tonic/soda brand, or to service the broader alcohol-adjacent beverage space.
• The tone is practical and founder-focused: not just theory, but real-world challenges, scale, and markets in India.

00:02:10Subtopic

• The episode frames craft beverages as a space where authenticity, design, and direct connection to producers matter as much as, or more than, pure price competition.

00:10:02Major Topic

Speaker: Matt

• Matt shares his mixed heritage origin story (Chennai, US, Polish heritage) to illustrate the cross-border exposure that informs his approach to beverage and coffee. He explains early tasting education in coffee and how he transitioned from finance into a coffee obsession that led to starting a roastery in Delhi in 2012.
• Key points:

- Coffee as a source of flavor, origin, roast, and brew; not just a caffeine hit. - The early struggle to source export-quality Indian coffee and the realization that Indian consumers would rarely pay premium for quality without market education. - The bedroom-start origin of Blue Tokai: a 500-gram tabletop roaster, then scaling into what became a well-known Indian specialty coffee brand. - The family background (parents as professors) and a broad set of experiences (development projects, NGO work, Middle East experience) that shaped a practical, ground-level, impact-focused business approach.

00:25:20Subtopic

• Matt describes prior roles (economic/real estate consulting, hedge fund trader, development projects) and how these experiences contributed to a pragmatic, data-informed approach to scaling a beverage business.

00:32:45Subtopic

• Transition to passion projects: the couple’s move toward coffee as a business in 2012–2011 era, with a focus on Indian growers and export markets, and the pivot from a consumer/retail lens to a broader coffee ecosystem lens.
• Notable quotes:

- "we started in 2012 went down visited the producers convinced them to sell us their export quality coffee and we launched it out of a small bedroom".

01:00:50Major Topic

Speaker: Aditya (Aditya B.)

• Aditya shares his Bangalore roots, training in culinary arts, engineering background, and winding path toward a culinary career and then beverage entrepreneurship.
• Key insights:

- Early exposure to food operations and kitchen business via a family background in hospitality and culinary arts. - Transition from engineering to culinary school in Australia; the cost of education funded by loans; parental support dynamics. - The drive to combine culinary craft with beverage product development, culminating in Mossant, a tea-forward kombucha company focused on India’s tea heritage (assam, doling, etc.). - The origin of Mossant: a partner’s health-driven kombucha experimentation, leading to a tea-forward approach emphasizing Indian teas and terroirs. - Naming origin: Mossant as remembrance of a friend and a historical art-deco poster; the team’s intent to carry forward a personal memory into the brand.

01:12:15Subtopic

• Mossant’s early challenges: regulatory limits on alcohol percentage (0.5% ABV) in India, which drives the product definition and licensing strategy.
• The positioning decision: build a tea-forward kombucha brand in a tea-strong market, focusing on Assam and Darjeeling teas.
• The role of tea as a differentiator vs. coffee in India’s beverage culture; challenge of labeling and categorization for consumers used to tea vs. kombucha.

01:40:34Subtopic

• The role of kombucha in a diverse beverage landscape: a consumer education challenge, the importance of building category awareness, and the strategy to introduce tea-based flavors (e.g., Assam, Neil Gor) before more funky flavors.
• Market size note: 200 crore INR Indian kombucha market; position as a nascent category with potential for premiumization and broader distribution.

01:50:37Major Topic

Speaker: Rahul (Subko founder or related)

• Rahul maps out the broader Indian coffee ecosystem, brand positioning, and Indian consumer behavior, including how Subko and Blue Tokai differ in business model and taste profile.
• Key comparisons:

- Subko emphasizes a design-forward, craft-centric experience with a strong emphasis on branding, packaging, and a cohesive world-building aesthetic. - Blue Tokai focuses on roasting quality, domestic supply chain and mass premium positioning, with a broader product range including baked goods coming into the fold.

• The conversation about building a brand with strong design language and a bake house inline with coffee, including chocolate production, is highlighted as a differentiator.

02:10:43Subtopic

• The discussion about market maturity: how craft coffee brands in India started with minimal packaging/brand guidelines and gradually codified a brand language that is now a strong differentiator for both Blue Tokai and Subko.
• Observations on consumer trends: the rise of experiential coffee shops, the importance of in-store culture, and how design, music, and art contribute to brand loyalty.

02:40:49Major Topic

Speaker: Anish (Svami/Mossant cofounder)

• Anish shares his personal journey from Army family to photography and beverages; the story illustrates how diverse experiences feed into the non-alcoholic beverage space.
• Key points:

- Anish’s routes through photography to wine, to beverages, and finally to building a non-alcoholic mixer brand. - The concept of Svami as a premium mixer brand with a design-forward approach and a passion for storytelling that blends culinary craft with visual identity. - The conversation about how non-alcoholic beverages are evolving, the importance of education around the product, and the potential for India’s own flavors (authentic Indian tonics) to capture global attention.

03:11:00Subtopic

• The strategic difference between a beverage brand focused on mixers vs. a stand-alone kombucha or tea beverage; Svami’s emphasis on clean labeling, India-inspired flavors, and a design-forward packaging language.
• The team discusses export potential, regulatory frameworks, and the importance of quality control and distribution channels.

03:40:15Major Topic

Speaker: Rahul (Stranger and Sons / beverage investor dialogue)

• The broader investor and founder dynamics in the Indian beverage space; emphasis on brand specificity, build-time vs. growth-time, and the long-term value of authenticity.
• The discussion on the role of quick commerce vs. offline channels for new beverage brands and how distribution challenges shape pricing and margins.
• A candid view on the 40% tax regime for beverages with sugar in India and how that tax regime shapes product development (sugar-free or low-sugar options, pricing strategies, and category education).

04:20:00Subtopic

• The tax discussion: difference between sugar tax regimes in UK (sugar tax with slabs) vs. India’s 40% GST on certain carbonated beverages; the need for a policy rethink to enable healthier, innovative beverages at attainable price points.
• The potential of a tiered tax based on sugar content to spur innovation and reduce price barriers for consumers.

04:40:00Major Topic

Speaker: Anish / Mossant team

• The compound opportunity in non-alcoholic beverages: not just kombucha, but a broad category of mixers, sodas, tonics, energy drinks, functional beverages, and possibly beauty and nutrition lines.
• The conversation explores a future where Indian flavors and fermentation techniques (kasra, chaas, etc.) converge with modern packaging and distribution to create globally competitive products.

05:05:00Subtopic

• The market structure for beverage manufacturing in India: bottling dynamics, contract manufacturing, and the importance of choosing the right packaging (glass vs can vs tetra pack) given regulatory and distribution realities.
• The conversation highlights the bottling industry’s influence—political connections, licensing, and the real estate dimension of canning lines as a barrier to entry for new players.

05:30:15Major Topic

Speaker: Panel Discussion – All founders

• The panelists synthesize a practical playbook for a 25-year-old wanting to start a coffee shop or a craft beverage brand in India.
• Core takeaways:

- Differentiation should be anchored in brand identity, design language, and a compelling experiential concept (not only taste). - Food plays a critical role in driving checkout value; beverages alone may struggle to sustain a business unless paired with strong food & space. - A mix of on-premise experiences (events, music, art) helps create a cultural anchor for a neighborhood store. - Distribution is essential—offline channels, restaurants, cafes, and retail accounts drive brand discovery; Quick Commerce is a complementary but not sole path to scale. - The real estate and capex reality in India means a thousand-square-foot footprint with thoughtful fit-out can be more scalable than over-sizing early.

05:50:00Subtopic

• The practical ‘starter kit’ advice for a 25-year-old:

- Start with a strong, defensible concept and a tight menu (prefer pour-overs, a few signature drinks, and a small but high-quality food line). - Build a brand story rooted in Indian terroir, authenticity, and craft—deliver a narrative that customers can connect with offline and online. - Focus on distribution and relationships with local cafes, bars, and retailers; avoid over-reliance on a single channel like quick commerce. - Don’t underestimate taxes and licensing; build the financial plan around the actual landed cost, margins, and all regulatory costs.

06:40:00Subtopic

• Real-world numbers shared by founders:

- 400 crore run rate across brands; distribution across Delhi, Mumbai, Bengaluru, Pune, Chandigarh, with active international presence (Japan cafe). - Beverage/mixers: the majority of market expansions rely on a combination of beverage + food + retail product; the exact split varies by brand. - Substantial emphasis on non-alcoholic beverages as a cultural trend and business strategy.

07:20:00Major Topic

Speaker: Closing thoughts & calls to action

• The group emphasizes collaboration and openness to help new entrants. They encourage reaching out via social media (Instagram) and emphasize that the craft beverage community remains supportive and collaborative.
• The overarching message: Build authentic brands with strong product, strong design, and strong real-world distribution; education and category-building are central to long-term success.

07:50:15Resources Mentioned

• Blue Tokai, Subko, Svami, Mossant (brands)
• USAID (US government aid organization)
• IFMR (Financial research organization in Chennai)
• DUSTAR (Indian handcraft NGO)
• Swami (Mossant’s co-branding conversation with Svami)
• Kasara (a local flavor discussed for kombucha/cultural beverage line)
• Kasara Kucha (fermented coffee/tea concept)
• Violet or violet-tinged design references (brand design cues on packaging and branding)
• Quick Commerce platforms (Delivery-driven channels in India – e.g., modern retail logistics)
• Bevet (website mentioned for industry data and comparisons)
• Gry Soul (coffee brand referenced in Delhi; a source of craft coffee)
• Svami, Mossant, Blue Tokai, Subko, and Stranger & Sons (examples of craft beverage players)
• Om-related or industry-adjacent references: Kasara, Keonia (taste references; not explicit in the transcript but part of flavor discussions)
• Roastery and cafe concepts: Nitro coffee, Pourover, Coffee on Tap (Nitro), etc.
• 0.5% ABV regulation in India for kombucha; 40% GST in sugar beverages; UK sugar tax model as a reference point.
• Indian flavor repertory: Indian tonics, chai-forward beverage design, and local fermentation techniques.

Resources Mentioned

• Blue Tokai
• Subko
• Svami
• Mossant
• USAID
• IFMR
• DUSTAR
• Swami
• Kasara
• Kasara Kucha
• Bevet
• Gry Soul
• Stranger & Sons
• Quick Commerce (industry concept)
• Coca-Cola, Pepsi (competition reference)
• 7-Eleven (global retail example)
• Vinile/Record store collaborations (cultural events referenced)
• Peter Cat Recording Company (band collaboration referenced)
• Kasara Kucha (Indian regional flavor concept)
• India’s coffee wave concepts: waves of coffee (1st/2nd/3rd waves, etc.)
• UK sugar tax model as a policy reference

00:00:00 ⭐ HIGH PRIORITY

• Core idea: Craft beverages in India are at an inflection point where authenticity, design, and real distribution unlock durable growth beyond price-based competition.
• Observation: Education and category-building around kombucha and tea-forward beverages can expand the market and create a cultural habit around non-alcoholic, complex beverages.

00:03:40 ⭐ HIGH PRIORITY

• Core idea: The Indian market is moving toward experiential, design-led brand ecosystems. The brand’s world, packaging, and in-store culture become as important as the product itself.

00:36:50 ⭐ HIGH PRIORITY

• Core idea: Distribution and brand story are the two biggest levers for a new entrant in the crowded beverage space; quick commerce helps scale, but offline presence (cafes, bars, restaurants) remains essential for building a lasting brand.

01:25:10 ⭐ HIGH PRIORITY

• Core idea: Regulatory and taxation realities in India (0.5% ABV for kombucha; 40% GST on beverages with sugar) shape product design and pricing strategies; policy shifts could unlock faster category growth.

02:10:43 ⭐ HIGH PRIORITY

• Core idea: The market differentiation is not only about flavor and roast, but about holistic experiences (design, music, space, and community events) that create a ‘world’ around the brand.

03:21:02 ⭐ HIGH PRIORITY

• Core idea: Be mindful that first-mover status isn’t a guarantee of lasting success; the longer-term success depends on building an authentic, scalable brand with clear positioning and durable distribution.

Executive Summary

• The episode brings together four Indian craft beverage founders—Blue Tokai, Subko, Svami, and Mossant—to explore how to build durable, premium beverage brands in a market dominated by large incumbents and evolving consumer tastes. A recurring theme is that craft beverage success hinges less on chasing price competition and more on delivering an authentic story, a compelling brand world, and robust distribution—especially offline presence in cafes, restaurants, and specialty shops. Kombucha is framed as a nascent but high-potential category in India, with regulatory constraints (0.5% ABV) shaping product definitions and a path toward broader consumer education. The conversation also covers the importance of food pairings in coffee shops, the role of design-led branding, and the challenge of navigating packaging, canning vs. glass, and the bottling ecosystem in India.
• Practical, founder-level guidance for a 25-year-old entrepreneur: start with a tight concept, ensure distribution channels early, and invest in branding and storytelling to differentiate in a crowded market. They stress the importance of authentic brand identity, strong partnerships, and a willingness to experiment with product formats (tonics, kombucha, coffee-on-tap, etc.). The panel also acknowledges the regulatory and tax environment (notably sugar taxes and ABV limits) as critical considerations for pricing and product design, and suggests focusing on education and category-building to mature the market.

Key Takeaways

• ⭐ HIGH PRIORITY Build a brand around an authentic story, not just a product: design language, packaging, and in-store culture matter as much as roast quality or product flavor.
• Kombucha in India is a nascent but scalable opportunity if you address regulatory limits (0.5% ABV) and educate consumers about the category.
• The Indian craft-beverage space benefits from a tea-forward approach (for kombucha) and a coffee-forward approach (for roasters) with a strong emphasis on Indian terroirs and local sourcing.
• Food drives beverage sales: in cafe concepts, a robust food menu can significantly boost average order value and footfall.
• Quick commerce amplifies reach but is not a substitute for offline brand building; strong on-premise experiences remain critical to long-term branding.
• Taxation and regulation significantly shape product design and pricing: UK-like sugar taxes offer a reference point; India’s sugar-tax regime creates pricing pressures that can hinder innovation unless addressed strategically.
• Differentiation through experience is as important as product quality: music, art, pop-ups, events, and collaborations help create a unique customer draw.
• Local, Indian flavors and fermentation traditions offer competitive differentiation when positioned as globally relevant Indian beverages.
• The bottling and canning ecosystem matters: access to packaging lines and service networks is a practical constraint for new entrants; consider starting with glass and later moving to canning if scale justifies it.
• There is real value in building a local supply chain with direct relationships to producers and emphasizing traceability and sourcing ethics.
• Education is a recurring challenge for new beverages: invest in educating customers about what kombucha or Indian tonics are and why they taste the way they do.
• In India, brand reach comes from a combination of offline presence, restaurant partnerships, and experiential events more so than just online marketing or performance ads.
• Consider collaboration with cultural or music events, artists, and brands to expand reach and establish a shared cultural space around your beverage.
• The long-term growth path for many craft-beverage brands lies in regional, independent, and niche channels rather than mass-market, with a focus on depth of product and customer relationships.

Action Items

• For a 25-year-old entering craft beverages:

- Define a tight concept and a small, distinctive menu (focus on 4–6 signature coffees or kombucha flavors) and build a strong brand narrative around Indian terroir and craft. - Build offline distribution early: target cafes, restaurants, and specialty stores; cultivate relationships with local bars and mixologists; run limited-time pop-ups and collaborations. - Design a cohesive brand world: logo, packaging, and shelf presence that communicates authenticity and quality from day one. - Price strategically with a clear margin plan; account for higher costs of packaging (glass vs can) and the 40% sugar tax dynamics; consider low-sugar or sugar-free variants to broaden appeal. - Start with glass packaging to test the brand and ensure easy scalability, then evaluate canning once volume justifies the capex and service complexity. - Invest in education-driven marketing: simple in-store demos, tasting events, and collabs with artists/mest for storytelling rather than heavy ad budgets. - Develop a strong operations playbook: source from a defined roster of estates, ensure roasting or production consistency, and create standard operating procedures for QA and inventory. - Prepare for regulatory hurdles: understand ABV thresholds for kombucha, registration/licensing requirements, and tax implications; map cost structure accordingly. - Build a culture of openness and collaboration within the craft-beverage ecosystem; seek mentors and peers for advice and partnerships.

Mental Models

• Name: Waves of Coffee (first/second/third wave) and Beyond

- Detail: Recognize that India is transitioning from a wave-driven coffee market to a more sophisticated ecosystem that values authenticity, sourcing, and design; new entrants should differentiate through branding and distribution, not only product.

• Name: Brand World Coherence

- Detail: A cohesive brand world (visual identity, packaging, store ambiance, and content) acts as a force multiplier for product quality and helps customers form an emotional connection that sustains a brand beyond price.

• Name: Channel Strategy Hybrid

- Detail: A successful craft-beverage brand uses a mix of on-premise (cafes, bars, restaurants) and off-premise channels (retail, quick commerce) to achieve scale while maintaining product integrity and customer intimacy.

• Name: Education as Marketing

- Detail: For nascent categories like kombucha, initial investment in consumer education yields long-term loyalty; partner with influencers, chefs, and beverage experts to translate the product’s value into practical user benefits.

• Name: Regulatory-aware Product Design

- Detail: Regulations around sugar content, ABV, and packaging impact product formats, pricing, and go-to-market; design products with compliance in mind to avoid costly reworks.

Glossary

• Kombucha: Fermented sweetened tea produced with a symbiotic culture of bacteria and yeast (SCOBY); it contains probiotics, organic acids, and trace amounts of alcohol (usually below 0.5% ABV in regulatory contexts).
• ABV: Alcohol by volume; a percentage that indicates the strength of an alcoholic beverage.
• SCOBY: Symbiotic Colony Of Bacteria and Yeast; a living culture used to ferment tea into kombucha.
• Kefir: A probiotic beverage made from fermenting milk or dairy; similar function to kombucha but typically dairy-based.
• Quick Commerce: Ultra-fast delivery (often within minutes) of groceries and beverages to consumers via mobile apps and local dark stores.
• 0.5% ABV: Indian beverage regulatory threshold for products to avoid liquor licensing and excise taxes.
• GST: Goods and Services Tax in India; 40% tax on certain beverages with sugar in the discussed context.
• Pourover: A manual coffee brewing method that emphasizes precision and flavor; often used in specialty coffee to highlight single-origin beans.
• Nitro Coffee: Coffee infused with nitrogen for a stout-like pour; served on tap in some craft shops.
• Indian Tonics: Carbonated water-based beverages with quinine and Indian flavor profiles; a nod to colonial-era tonic drinks and modern Indian flavors.
• Edible Branding: The practice of building a brand through a carefully designed, visually consistent identity across packaging and spaces.

Quotes

• > we started in 2012 went down visited the producers convinced them to sell us their export quality coffee and we launched it out of a small bedroom

- Timestamp: 00:25:20 - Speaker: Matt

• > kombucha is fermented sweetened tea

- Timestamp: 01:40:34 - Speaker: (Kombucha explanation segment; speaker not explicitly named)

• > regulation is 0.5% ABV; taxation is 40% GST on sugar beverages

- Timestamp: 01:50:37 - Speaker: Panel discussion

• > the biggest problem was alcohol regulation, which was 0.5% ABV

- Timestamp: 01:18:00 - Speaker: Aditya

• > if you tell me i can drink booze i can get at least 5-6% it's low in calories it tastes decent

- Timestamp: 01:50:00 - Speaker: Anish

• > I would rather build a high-quality, Indian-flavored beverage than copy a Western model

- Timestamp: 02:10:43 - Speaker: Rahul

• > first mover advantage is not the end-all; authenticity and niche specialization win in the long run

- Timestamp: 03:21:02 - Speaker: Nikhil / Panel

Topics

• Craft Beverages
• Coffee Industry India
• Kombucha Market India
• Non-Alcoholic Beverages
• Food and Beverage Entrepreneurship
• Brand Design and Storytelling
• Distribution and Channels
• Regulation and Taxation
• Local Flavor and Fermentation
• Quick Commerce and Retail Strategy