Coffee: This business is hot!

The coffee industry of India is the sixth largest producer of coffee in the world, accounting for over four percent of world coffee production, with the bulk of all production taking place in its Southern states.

India is most noted for its Malabar monsoon variety. It is believed that coffee has been cultivated in India longer than anywhere outside of the Arabian Peninsula.


Consumption and Exports

This year ending March, the production was 181225 tonnes, valued at 1944.98 crores.


By tradition, coffee is known as a South Indian drink, but growing demand for coffee in non-Southern states over the past few years has started pushing up overall coffee consumption in the country.


Between 2003 and 2009, India’s annual consumption grew by staggering 42% in non-Southern states while the same rose by 3.5% in the Southern states. Southern states comprising Tamil Nadu, Kerala, Andhra Pradesh and Karnataka share nearly 78% of the total coffee consumed in the country while coffee consumption in other parts of the country is also catching up.


Exploding coffee chains

Coffee consumption has been shooting up in states like Maharashtra and even National Capital Region (NCR) of Delhi in the last few months. Experts believe that explosion of retail coffee chains up north seems to have done the trick.


Sanjay Coutinho,CEO, of Barista shares, “India was always a tea drinking nation. The challenge has always been consumption and the model to sustain that consumption pattern. And you know, we have managed to withstand that. Earlier, there were just CCD and Barista, along that time we have one coffee chain from Hyderabad as well. These were the only 3 players out of which only 2 have survived. Now a lot of coffee players have emerged and I am sure everyone would want to come to India".


As per a statistics released by International Coffee Organization (ICO), consumption in India has been gradually increasing in the past five years, thanks to the beverage’s popularity in the North.


The domestic consumption increased to 1.57 million bags (60 kg per bag) in 2009 from 1.35 million bags in 2006. Coffee consumption in India increased on the back of the state-owned Coffee Board taking steps to develop the domestic market to support coffee farmers in the country.


Domestic versus exports

Generally 80% of coffee produced in India is exported and only 20% is consumed locally. This ratio has been changing slowly on account of rising domestic consumption.


Alluding to a coffee consumption survey, Coffee Board chairman Jawaid Aktar said the total coffee consumption in India during 2009 touched 1.02 lakh tonnes with an urban and rural division of 73% and 27%, respectively.


Interestingly, instant coffee accounts for 57% of total coffee consumed in India, while the remaining 43% is shared between roast and ground (filter) coffee.


In urban areas drinking of instant and filter coffee is in the proportion of 61:30 while in rural areas 46:54.Consumption in non-south areas has largely been of instant coffee. Penetration of coffee (beverage consumed in the past 12 months) is at 92% as compared to 59% in 2003, indicating that people have started experimenting with this beverage in the past few years, the Coffee Board chairman added. Non-south of the country has been identified as potential area to increase the consumption growth in the future, he said.


Coutinho concludes, “There is a great difference as to how people looked at cafes and coffee 10 years back and how they see it now. There has been an increase in beverage drinkers and the wide choices they are looking for. Being exposed to the international trends through films, advertising, youth community sites and personal blogs, people are constantly looking for something different.


With an increase in preference for out of home experience – they have more to choose from and are savvy when it comes to making decisions. They are hanging out more often which has given rise to a contemporary café culture. Coffee has now made its way across the Indian landscape and rooted itself in the lifestyles of the people, both young and old. A cup of coffee is not really for those on the move. It is definitely for those who would like to enjoy every sip over a long chat. Research has revealed that the people who visit cafés want more than a cup of coffee. They want an interactive experience, in an ambience that is friendly, comfortable and warm".



Publish Date
Not Sponsored
Live: People Reading Now