The Hazelnut Factory (THF) is accelerating its expansion across India’s fast-growing Tier II and Tier III markets while simultaneously launching premium café concepts in metro cities, as the company looks to build one of the country’s leading café and artisanal bakery chains.
The food retail brand plans to open 20 new outlets during the current fiscal year, including 10 flagship cafés and 10 smaller-format stores, while entering three new states and expanding its manufacturing capabilities to support long-term growth. The strategy reflects THF’s focus on building a diversified food retail business that combines cafés, bakeries, mithai, quick commerce and premium dining experiences.
Founder and CEO Ankit Sahni said the company’s early focus on Tier II cities has created a strong competitive advantage, with outlets in these markets now growing at more than 100%.
THF currently operates 22 cafés across 11 cities, with a strong presence in Uttar Pradesh. Over the past year, it has expanded into Prayagraj, Varanasi, Bareilly, Agra and Meerut, while piloting smaller-format stores in Mathura and Barabanki. The next phase of expansion includes Kanpur, Gorakhpur, Moradabad, two outlets in Gurugram, and entry into Uttarakhand through Dehradun, Nainital and Haldwani, with Rajasthan and Bihar also part of its future roadmap.
Alongside its Bharat-focused expansion, THF has introduced Foundry, a premium café concept designed specifically for Tier I consumers. Unlike its traditional cafés, Foundry focuses on an experience-led format featuring live baklava preparation and a reimagined coffee menu with signature beverages such as Short White and Long White.
Financially, the company closed FY26 with a turnover of ₹104 crore and expects to reach an annual recurring revenue (ARR) of around ₹225 crore during the current fiscal year.
Beyond cafés, THF says its bakery and mithai business has become its fastest-growing revenue engine. While cafés initially contributed nearly 50% of sales in markets such as Varanasi, that share has now declined to around 30%, with bakery and mithai witnessing significant growth. Across the network, 60% of revenue comes from takeaway, while dining contributes approximately 40%. Existing outlets continue to record 15–20% annual growth, with several stores growing by more than 50%.
To support expansion, THF is investing ₹10 crore to upgrade its manufacturing facilities in Lucknow and Noida, including ₹5–7 crore in Lucknow alone. The upgraded facilities are expected to support production for an ARR of ₹300 crore, while currently operating at only around 20% capacity, leaving substantial room for future scale.
The company is also entering quick commerce with seven artisanal sweets SKUs, expecting the business to contribute ₹15–20 crore by the end of the fiscal year. On the retail side, flagship cafés require investments of around ₹2.25 crore, while smaller formats need approximately ₹1.25 crore. THF is also piloting a 600–700 sq. ft. kiosk format, requiring ₹60–70 lakh in capital expenditure, with plans to franchise at least five kiosks.
With premium concepts, deeper penetration into Bharat, manufacturing investments and an expanding omnichannel presence, The Hazelnut Factory is positioning itself as a diversified food retail brand built around India’s rapidly growing demand beyond the metros.
Source: Based on publicly available reporting, with additional editorial adaptation and analysis.
