Land Of Robusta Entices Java Brewers From Abroad

Storm in the tea cup is something you have heard. But will you laugh if you hear that a storm is brewing in the coffee cup? Not if you belong to the southern part of India where coffee is more than a mere beverage. Drinking coffee in the South is a ritual of sorts that sets the tone for the day. Therefore, when the first cup of coffee arrives, it better be caramel-hued, piping hot, steamy, frothy and appropriately sweet. Because when the first cuppa is downed and the taste reaches its crescendo, the day pans out well, in fact, very well.

A few years ago, coffee was a drink that was predominantly South Indian and came in steel cups, both at home and outside. And each cup cost around Rs 5. But this was before the 1,500-outlets-strong Café Coffee Day started its operations in 1996. Prices at the CCD were then considered insane and experts had even written off the chain as an experiment that hadn’t got its facts right. After all, who would want to pay Rs 50 for a coffee variety, no matter how exotic it is, when normal coffee is available for a fraction of that amount?

But very soon, the patrons, especially the young people who had arrived fresh as the benefactors of the IT industry, embraced the fashionable coffee shops (they had delightful ambience) as their new socialising hubs that spoke of their status symbol. After all, coffee is all about class, isn’t it?

The coffee clubs in every city worth their salt will vouch for it. Bangalore had some; Kolkata had its charming old coffee houses, some of which date back to the Colonial Era, and many cities came up with their own versions of coffee culture that integrated with their respective cultures. In other words, coffee did form a lifeline for many. What’s more, coffee was the essential part of Indian literature as well, especially in the early 1970s, since coffee clubs hosted numerous poetry sessions, literary discussions and socio-political debates over endless cuppas, shaping the Indian sensibility!

Indian coffee, which has a comparatively recent origin and is mostly grown in the South, entered the country in the 15th century as a Sufi saint brought the beans back when he returned from Mecca. The seeds sown at that time have been bearing fruits ever since.

The production of coffee beans in the country and the ever expanding café markets are interrelated in some ways, but the growth of the Indian coffee industry and the fast-paced development of the consumer market for coffee are not totally interdependent.

While India’s Arabica and Robusta are known for their distinct aroma and stimulant properties, we must remember that India exports nearly 80% of its total coffee produce to Russia, Germany, the US, Spain, Belgium, Slovenia, Greece, the Netherlands and France, among others. The country grows nearly 800,000 tonnes of coffee across the states of Karnataka, Tamil Nadu, Andhra Pradesh, Orissa, Assam, Manipur, Meghalaya, Tripura, Mizoram, Arunachal Pradesh and so on. With the majority of the coffee growers being unorganised farmers, coffee as a cash crop does not have the negotiating power to dictate its procurement prices.

Although there is a Coffee Board in India that essentially deals with the welfare of the coffee growers, underdeveloped socio-economic conditions, perpetual labour shortage and absence of government assistance in 98% cases make it more of a traditional crop that has been grown through generations, rather than a cash crop with great profit potential.

On the other hand, what’s been thriving is the processed coffee business, which is more like a hospitality industry, with customer service and profit-making being its chief objectives. Café Coffee Day has already posted an impressive growth chart of 1,500 outlets in less than two decades and other cafés, which are opening to brisk business, are present across almost all highways, metros and tier II cities. It seems that the market for coffee as a consumer product has been resurrected in India.

Consequently, when the world’s largest coffee chain Starbucks entered the Indian market through a joint venture with the industry biggie TATA Group (Tata Starbucks Ltd), the market was warm and more than welcoming. The well-travelled Indian took to Starbucks as the fish takes to water. The brand, which entered the Indian market in October 2012, has been on a roll ever since, opening outlets in all major cities. The company is currently catering to a market worth $300 million and hopes to achieve an impressive 20% annual growth.

Curiously, the Indian coffee market, in spite of having enough growth potential, has not looked beyond CCD. Other brands such as Barista, ow­ned by Lavazza Spa, had a tough time staying afloat in this volatile market.

In a largely tea-obsessed nation, coffee feels like an aberration. But brands such as CCD and Starbucks are positioning themselves as lifestyle choices and aspirational names in order to serve more than just coffee. But here is a hitch. In spite of pushing a lot of money into branding, will Indian consumers cold-shoulder these companies after experiencing the initial euphoria of having an international coffee brand in the neighbourhood? In such a case, only constant innovation can save the cup of coffee!