In a country long steeped in the warm familiarity of chai, a quiet revolution is bubbling in the cups of its urban youth. From the Instagrammable corners of Third Culture Coffee in Lahore to the bustling tables of Espresso in Karachi, a Gen Z-driven coffee culture is rising in Pakistan – one that fuses aesthetics, identity and innovation into each cup.
Pakistan is, by all traditional accounts, a tea nation. Its Rs150 billion hot beverages market is still dominated by chai, which retains a deep cultural and emotional resonance, from rishtay scenes to roadside dhabas. ‘Chai chahiye?’ is less of a question and more of a cultural cue. But coffee is no longer playing the standby. Among Pakistan’s urban Gen Z, digital natives with global tastes, coffee is gaining ground not as a replacement for tea, but as an expression of lifestyle, choice and modernity.
Gen Z’s relationship with coffee is not just about caffeine. It's about experience. According to Forbes, this generation consumes coffee not merely as a beverage, but as a lifestyle product. Cold brews, iced lattes and ready-to-drink cans are part of a broader culture of ‘hacked time’ and curated authenticity. A hot cup in the morning may serve as ritual; a cold one in the afternoon becomes reward.
In Pakistan, this trend is mirrored in the rising popularity of cafes as social hubs. The latte has emerged as the default order among urban youth. More interestingly, cold and ready-to-drink coffees – once rare in local markets – are being embraced, particularly in Lahore, Karachi and Islamabad, where a trip to a cafe is not just about sipping a drink but signalling belonging to a new cultural vanguard.
The cafe, for Gen Z Pakistanis, has evolved into something more than a beverage stop. It's the post-class hangout, the informal co-working space, the Tinder date venue and the LinkedIn-worthy aesthetic backdrop. It’s where creative freelancers brainstorm, where student activists gather, where Instagram influencers shoot their content. And unlike the intimacy of chai at home, coffee in a cafe offers a curated social experience. The space, the lighting, the playlist, all matter as much as the roast.
Unlike older generations who typically began (if at all) drinking coffee in their twenties, Gen Z starts around the age of 15. Their early start isn’t just due to caffeine cravings. It’s cultural. Coffee is increasingly woven into the coming-of-age rituals of urban youth: the first solo cafe visit, the study session over a latte, the group photo with matching cold brews. Their exposure to global trends via social media, Netflix and influencers shapes their palate early. According to industry insights, coffee consumption among 18–24-year-olds is growing at a faster rate than carbonated beverages and energy drinks. And innovations in format, from sachets to bottles, are accelerating this growth.
Pakistan’s coffee sales hit Rs7.2 billion in 2022, still small compared to tea, but not insignificant. Instant coffee leads, but fresh coffees are rising fast. The market is projected to be part of a Rs350 billion hot beverage sector by 2027, forming over 70 per cent of total food and drink spending.
But while the youth are fueling this caffeinated surge, government policy is still steeped in an outdated brew. Pakistan’s trade and tariff structure actively disincentivises growth in the coffee sector. Import duties on coffee range from 42 per cent to 53 per cent, compared to just 13 per cent for tea. Even bulk instant coffee, meant for processing, is taxed at 28 per cent, hampering local manufacturing and innovation.
This is in sharp contrast to successful models abroad. Germany, which doesn’t grow a single coffee bean, became a $3 billion exporter of roasted coffee by removing tariffs on raw imports and encouraging local processing. South Korea and Japan followed similar models. Building billion-dollar coffee markets through branding, product innovation and smart trade policy.
Pakistan, with its massive youth demographic and growing urbanisation, could follow suit. But unless duties on industrial-use coffee are rationalised and value-addition is incentivised, local entrepreneurs will be locked out of the very market they helped build.
Currently, our coffee imports stand at a modest $1.98 million in FY24. Yet, with a cafe economy on the rise and Gen Z driving demand, the potential is vast. The local industry meets only 5 per cent of demand. This gap is not a limitation; it’s an untapped opportunity. Policy reform could unlock a value chain – from local roasting to regional exports – creating jobs, attracting investment and transforming Pakistan from a passive consumer to a regional coffee processor.
Nestle’s Nescafe already dominates 98 per cent of the market, with products ranging from classic jars to 3-in-1 sachets. But as new players emerge, the competitive landscape is evolving. Small roasteries, indie cafes, and even online coffee startups are beginning to chip away at the monopoly, provided an anti-innovation duty regime does not crush them.
Tea will always have its throne in Pakistan. It’s affordable, familiar, and deeply woven into the social fabric. But coffee, especially among Gen Z, is not trying to dethrone it. Instead, it’s carving out a parallel space; one marked by creativity, cosmopolitanism and choice.
In the hands of Pakistan’s youth, coffee is more than a drink. It’s a badge of identity, a social currency, and a vessel of soft power. To ignore this shift, or worse, to tax it into oblivion, would be to miss out on an industry waiting to percolate.
A smart coffee policy, backed by youth-driven consumption and urban cafe culture, could turn Pakistan from an importer of beans into an exporter of experience.
Furqan Ali is a Peshawar-based researcher who works in the financial sector. Alma Soomro is a career development practitioner from Karachi.