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commodities are concerned. Brazil and Columbia are top two coffee producers in the world. They account for more than 40% of the total world produce while India¶s contribution is just 4.1%. Indian coffee is rated among the best-quality mild coffees in the international market and is exported to USA, UK Russia, Europe, Sweden, Norway, Yugoslavia, Belgium, Australia, Japan and the Gulf countries. In India coffee cultivation is largely confined to the hilly regions of the southern states of Karnataka, Tamil Nadu and Kerala Karnataka accounts for 53 percent of the planted area (59 percent planted to Arabica, 41 percent to Robusta) while Robusta is dominant in Kerala (which has 28 percent of planted area). In Tamil Nadu however the crop is majorly of Arabica (which has 11 percent of planted area). Some 1, 33,049 small planters and 2,948 large planters cultilvate4d coffee during the year. India produces 260mn Kgs of coffee per year. Indian coffee production has a yield of 800 ± 900 kg. Per hectare, this is low compared to the world average of 1,100 kg per hectare. The area under coffee cultivation is approximately 3.1 lakh hectares. India produces an average of nearly 2 lakh tones of coffee a year, valued at over Rs. 460 crore, mainly grown in south India. Out of the total production only 20% is consumed in the domestics markets rest is exported. Thus India has to depend heavily on foreign markets. Indian coffee is typically mild and not too acidic-and yet it possesses and exotic full-bodied taste and a fine aroma. The flavour is full bodies, slightly acidic and straightforward.
The coffee market and its various elements are what drive the coffee industry. Within the Market portion of the coffeeresearch.org site you will find information and statistics on coffee consumption, exportation, importation, and explanations of the world coffee market. This section will focus on general coffee statistics, coffee market prices, and coffee market trends. To supplement this coffee market research, there are many coffee marketing subscription websites exist to give instant quotes and to facilitate trading. Additionally, for the special ty and gourmet coffee market, the Specialty Coffee Association of America and the National Coffee Association publish extensive annual data on coffee consumption statistics in the United States. For more specific international coffee market information, th e International Coffee Organization is the best resource.
INDIA'S COFFEE INDUSTRY OVERVIEW The world coffee production in the coffee year 2009 10 is estimated to be 123.6 million bags signifying a decline of over 4.5 million bags in the CY 2008 -09 when production totaled at 128.2 million bags. This is revealed in a report of International Coffee Organization market report for January 2010
Uganda. 2010 Indian Coffee Board puts country's coffee production at 2.3 million bags in 2007.93 -3. India produced over 3.21 tonne (Post Blossom Estimation) production followed by Kerala and Tamil Nadu. Karnataka leads the country with 2. Vietnam.excluding additional information that has to come from Colombia and Vietnam.525 tonnes and robusta 204.38 4.18 lakh tonne in 2007-08. Tanzania. January .4 million bags in calendar 2007. The Colombian production is unlikely to register worth mentioning increase.7 million bags from 97.96 lakh tonne signifying marked decline from 2.755 tonnes.15 percent increase in world consumption of coffee. Equador and Peru.7 million bags in 2008. Total world exports of coffee (2008 & 2009) 2008 Colombian Milds Other Milds Brazilian Naturals Robustas Total 12219 22524 28724 34199 97666 2009 9278 20861 30033 34518 94690 % Change -24.05 tonne (Post monsoon estimation) and 2. Papua New Guinea.56 0. The Brazilian Coffee Industry Association expects 4.07 -7.by about 14 percent besides production shortfall apprehended in countries like Cote d'Ivoire. the board has estimated an output of arabica at 101. Coffee Market report. According to ICO estimate. World consumption however is provisionally estimated at 130 million bags in 2008 from 128 million bags in 2007. The over all world supply of coffee is likely to be tight in 2010 due to low level of opening stocks as well.1 million bags of 60 kgs each in 2009 compared with 3.06 tonne (Post Blossom Estimation) respectively. For the present crop year beginning October. Domestic consumption in exporting countries was up at 36.7 million bags compared with 35. The ICO report also states of a significant fall in coffee production in Brazil . Mexico. India's Coffee Production (In tonne) State Karnataka Kerala 2006-07 206025 59475 2007-08 191575 49000 2008-09 183860 57200 2009-10 205700 59250 .05 Source: International Coffee Organization.Country's coffee exports during fiscal 2008-09 stood at 1. In the export front calendar 2009 closed with a decline of 3 percent at 94.90 tonne (Post monsoon estimation) and 3. El Salvador.
Among the coffee growing states. India's Exports of Coffee Year 2006-07 2007-08 2008-09 2009-10 (Upto March 8. Belgium. Europe accounts for about 70 percent of India's total coffee exports.64 1944.5 percent of world coffee production and the industry provides employment to 6 lakh people. Of this again. Updated on March 15. Slovenia. As a part of export promotion. Coffee Board has proposed to support coffee expansion programme taken up by the Integrated Tribal Development Agency on 24000 ha. 2010 . area in North Eastern Region. Russian federation.29 2242. the Coffees from different regions with their logos are promoted including the coffee from the areas under Integrated Tribal Development Agency. Greece. Coffee Board has been implementing developmental programmes for coffee development in North Eastern Region and Non Traditional areas. which will facilitate export of coffee.Tamilnadu Non-traditional areas (Andhra Pradesh & Orissa) North Eastern region Total 18225 4085 190 288000 18100 3175 150 262000 16255 4870 115 262300 19350 5185 115 289600* Post Monsoon estimates * Source: Federal Ministry of Commerce. Spain. Germany. as µAraku¶ Coffee. US. Netherlands and France. Japan. Constant endeavour is being made by the Government to help the coffee growers to ease their bank debts. Karnataka accounts for 70 percent of country's total coffee production followed by Kerala (22 percent) and Tamil Nadu (7 percent). Government of India India accounts for about 4.90 2046. Major Indian coffee importing countries include Italy. area in Andhra Pradesh and on 850 ha. Government of India With a view to expand coffee cultivation. 70 percent is shipped via Suez Canal. 2010 Quantity (In tonne) 249029 218998 197171 181225 Value ( In Rs crore) 2007.98 Source: Federal Ministry of Commerce. During 11th Five Year Plan.
are in place and growers have made use of them. is not in a position to influence prices. Coffee crop is rotated with other crops. opportunities and threats (SWOT) of an industry is paramount for its survival and growth. finance. To understand the coffee market in India we must first analyse the industry environment. what must be considered is that the domestic coffee industry is going through a period of transition. etc. This proves that core infrastructure such as technology. Weakness The price realisation of Indian coffee is low. particularly in Karnataka. It is metamorphosing from a controlled to a free market. making coffee produced in the country highly dependent (more than two third of domestic coffee produced is exported). Widely dispersedownership of coffee farms which reduces the risk of industry crippling strikes. Hence. supporting the grower during periods of low prices. Coffee is not a perishable commodity. we can proceed to make a SWOT analysis.. Harmonious labour relationship. This puts a heavy risk on growers as their revenues are highly dependent on global prices. Strengths Coffee production in India has risen from a meagre 17. being a minor player in the global coffee market. Over 98% of the farms are of an area of 10 acres or less. the risk of crop wastage is nonexistent. thus.000 tons. weakness. Also. Domestic coffee consumption is very low.A SWOT analysis on Indian coffee Pravin Palande Mumbai: Understanding the strengths. there will be temporary travails which can be rectified in due course. agricultural inputs. Thus. the largest coffee producing state.000 tons at the time of Independence to the existing 270. This is because India. With this in mind. What may be perceived as a strength in one situation may turn out to be otherwise in another. .
Hike in taxes can substantially reduce margins to growers and serve as major disincentive. Opportunities India being a minor player in the global market has great potential to improve its marketshare through higher yields and improved quality. This results in a negative image of India as an unreliable supply point. Competition from tea. the export quotas dictated by ACPC is something that Indians are not agreeing. Substantial increase in labour cost can erode competitiveness of Indian coffee in the international markets. Also. Domestic prices have remained high despite a crash in global coffee prices.Historically. there is adequate capital formation. Although coffee consumption in the US is declining. can cash in on this opportunity and become a major supply point. As a result. After the introduction of free sale quota (FSQ). much ofthe coffee from India is exported. a cheaper and more popular beverage locally. This improves the prospects of growth in productivity as growers can reinvest proceeds in that direction. India. being strategically situated. is undergoing an economic crisis. domestic consumption being very small. the largest importer of coffee from India. it continues to rise in Asia. After all. can reduce its minuscule domestic consumption.The decision (if taken) to join the Association of coffee producing countries (ACPC) will help India in the long run. it has suspended coffee imports. it has been proved that there are hardly any linkages between global and domestic coffee prices. Presently. Coffee is one of the few agricultural crops in India which is subject to taxes. Myopic view of coffee exporters who rush to cancel export contracts atthe first sign of higher domestic prices. . Russia. there lies a huge opportunity to expand the market with the help of intensive coffee promotion. Threats Cheap labour is one of the most critical cost factors in coffee production. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd. This threatens to severely dent our export volumes.
" says Tomas DePaulis. which conducts its own medical research and tracks coffee studies from around the world. which could help keep diabetes at bay.Strengths: USA Health Benefits y One of the factors that have deterred people from drinking coffee in the past was the belief that it was in some way harmful. This is good news for the people of America and for the Coffee Industry. the more coffee that you drink the less likely you are to ever being diagnosed with a stroke. What might be more surprising is that recent studies have shown that coffee can actually be good for you."´ industry. Is there Health Benefits to Coffee? % answered Yes answered Yes Is Coffee good for your health? % answered Yes . This is no longer the case. but a lot of good. y Benefits for the Coffee Store Franchisee Positive health risks are clear drivers of consumption. so this is good news for coffee stores and coffee store franchises. While many studies have explored the connection between coffee and certain illnesses such as cancer and high blood pressure. some 19. as consumers are happier to drink more caffeinated beverages. no evidence has been found to link coffee to these health risks. Coffee helps to increase your resting metabolic rate. research scientist at Vanderbilt University's Institute for Coffee Studies. the research shows that coffee is far more healthful than it is harmful. Drinking 6+ cups of coffee a day may reduce the risk of type 2 diabetes by 54% in men and 30% in women. Questions posed to consumers about the health benefits of drinking coffee and if they thought that coffee is good for their health are both up significantly since 2005. very little bad comes from drinking it.000 studies have been done in an attempt to understand the risks or benefits of consuming coffee. More people now believe that there are health benefits to coffee and that i t is good for their health. 2009 . ³For most people. PhD. and Brigham and Women¶s Hospital showed coffee consumption can reduce the risks of type 2 Diabetes. This is not the only study to show that a higher intake of coffee can lead to better health. In recent years. Another example is a study done by Harvard School of Public Health. ³"Overall. y Health Studies This is good news for the coffee According to a study done by Scientists at UCLA and the University of Southern California and reported on WebMD on February 19.
The local coffee house also provides a warm. This is a discount of nearly $1. This sustained growth in the industry points toward a solid opportuni ty within the coffee franchise industry. To remain successful. For example. Because of the recent economic downturn. Opportunities: The coffee industry is well developed and rooted in society with 54% of the overall American adult population drinking coffee.400 coffee bars with . calm environment in which people come to socialize. consumers are less likely to spend $5 for a cup of coffee than a year ago.000 coffee bars. Consumers are more conscious of spending and ar e more willing to shop around for the best deal. has over 200.90.20 in an attempt to lure consumers into its coffee shops during the recession. or too wet or dry. relax or even catch up on work. An increase in consumption of coffee in Russia and China also played a part. In comparison. Though the coffee industry is highly developed and competitive. that¶s 400 million cups of coffee consumed everyday. Coffee trees can't tolerate weather that is too hot or cold. Climate change can play a huge role in the amount of coffee that is produced and how much it costs the retailer. Italy.S. The stimulant effect of coffee is one of the reasons that hard working Americans make stopping into a coffee house part of their day. in 2005 coffee prices rose. Starbucks has realized the importance of this consumer trend and in response has begun its first combin ation discount by selling coffee and breakfast foods together for $3. This rise was most likely because of a harvest that was 10% to 20% lower than that in the record years before. ha s approximately 21. The coffee plant is selective about growing conditions. with a population of 60 million.2005 2008 Total Increase 37% 46% 9% 26% 36% 10% Weakness: As with growing any crop there are unpredictable elements that will affect the production of the crop and therefore the cost of coffee for the coffee franchisee. the demand for speciality coffee is growing every day. a coffee house needs to change their business in response to this consumer trend. the U.
In 2004 Seattle¶s Best Coffee and Borders Books and Music announced a licensing agreement to open Seattle¶s Best Coffee cafes in existing and new Borders Book stores. to start up and run a coffee business. Seattle¶s Best Coffee LLC has a buy one get one free offer to entice consumers to the coffee store. which reduces consumers' consumption. From 2005-2010. A coffee house is exposed to rising costs of coffee and dairy produc ts.000 in -store employees and people who oversee their stores. Threats: A common threat in any industry is an economic recession. This means there are more opportunities available. This just shows that there are a lot of opportunities for new outlets in the industry. drive-thru or cart franchises are much less than that of a stand alone coffee house. for a lower investment. regardless of the sector. coffee sales are expected to grow by a further 125% to reach $18. The growth is driven by the demand Americans have shown for up market and premium-priced coffees. Massimo Zanetti Beverage Cafés USA INC offers the opportunity to franchise a Chock Café Kiosk for the low initial investment cost of $20. The start up cost for kiosks.839 million in 2010. This just shows that there is still a huge amount of opportunity within the specialty coffee market The coffee industry has changed over the last few years. It is not only the coffee industry that has felt the effect of a more money-tight consumer base. This was in a bid to raise sales and to better the over all experience of the customer. Starbucks closed 7. Many coffee stores are taking measures to bring customers back to the coffee house. Franchise Direct's Disclaimer .100 stores nationwide for three hours to retrain about 135. Drive-thru. This is something that can not be foreseen but may have a big impact on the coffee store industry. We are currently in a recession and this has reduced revenue in companies.a population of 290 million.100. Promotions and special offers are ways of enticing customers. The old style coffee house is no longer the only place to purchase good specialty coffee. kiosks and carts are becoming more and more popular as they can offer their products and services to the µon-the-go¶ American. The growth of the specialty coffee market may not be where it was in the early 90¶s when the number doubled every 2 years but that does not mean that there isn¶t a growing market.
It is estimated that by December 2008. However. 53 tow ns with a one million population and 3. accounting for 95% of value sales in 2006. café coffee day and Qwiky¶s. India has eight big cities. Table given below indicates the consumptions of coffee in India.The Indian Coffee market by V S RAMA RAO on SEPTEMBER 9. We are pushing the consumption to make it part of India¶s consumer culture. It has potential to accommodate 5. With a large base of young working population India will emerge as the fastest growing coffee market. with the increase in the number of coffee outlets and the changing age profile of the population. The Indian coffee Board has taken steps to boost coffee consumption by 50% by 2012. Calendar Year Quantity (in MT) 1991 55000 1992 55000 1993 55000 1994 55000 2000 60000 2001 64000 2002 68000 2003 70000 2004 75000 2005 80200 The key players in this market are Barista. 2010 India continues to remain a tea loving nation.410 urban agglomerations of below one million populations. Fast food retailers like McDonald¶s who have for long offered milk shakes and ice creams have also started offering coffee. thereby giving the beverage a lifestyle status says its chairman. Barista . the country would have 1. growing at 63% per annum in terms of number of outlets.000 coffee retail outlets.135 organized cafes. the base of the consumers drinking coffee is expanding Nestle India and Hindustan Le ver dominate sales of instant coffee.
International sales account for 10 per cent of the business at present. The interiors are bright trendy and comfortable. Singapore Airlines and Evian. In March 2007. Every Barista café aims to recreate an ambience and experience of the typical Italian neighborhood espresso bar in India. The company has 140 outlets across India and plans to add another 50 in the current year. Barista also has three outlets in Sri Lanka and four in Dubai. Italian coffee roaster Lavazza acquired Barista for Rs 430 crore from Chennai based Sterlite InfoTech Group. The company claims that in December 2003. Barista experienced a 21 per cent per store increase in footballs over the pervious December with the number of footballs for the year totaling 14 million. Enthused by its growth over the past five years Barista aims to be the world¶s number one in coffee chain within the next 10 years.Barista are the key players. The company also plans to launch a new concept bar called Pavement Bar at the Taj poolside which would be a 24 hour coffee shop. The coffee chain initially targeted the premium segment of the market with its high pricing however the company went in for a 15 to 30 per cent price reduction last April following which there had been a 47 per cent increase in footballs. Barista which means bartender in Italian is a chain of coffee shops established in the year 1999. Barista has entered into alliances with premium hotels and has launched espresso bars at Taj properties across India. . Tie ups have also been done with Planet M and PVR cinemas. It also offers game like Pictionary and chess aimed at promoting an interactive social environment. Turner Morrison has a 60 per cent stake in Barista Coffee Company Ltd with Tata Coffee holding 34 per cent and the remaining six per cent being held by the employees. Promotional associations are also done with CNBC.
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