Coffee aims to take on tea as India's top tipple

Domestic consumption of coffee stagnated between 1980 and 2000, with around 60,000 tonnes being drunk every year, G.V. Krishna Rau, chairman of India's state-run Coffee Board, told a planters' conference in this southern hill town.

But demand has increased in the last four to five years, and total annual consumption has now surpassed 80,000 tonnes per annum. It is set to grow to 100,000 tonnes by 2009.

"There are enough people in the country with disposable incomes to consume coffee, and the grower should make full use of it," Rau told Reuters.

"If the producers come out with new brands and do aggressive marketing, the domestic consumption should be touching between 95,000 tonnes and 100,000 tonnes in three years," he added.

Coffee drinking has been growing at 5 percent a year as mushrooming cafe chains have cashed in on changing social habits.

Companies like Barista and rival Cafe Coffee Day attract young people with good jobs and cash in their pockets, at a time when many traditional meeting places have been demolished to make way for new buildings in India's fast-growing cities.

Rau said coffee production in the year to March 2007 might not see a significant reduction from earlier estimates of 300,300 tonnes despite heavy rains and pest attacks in some key coffee growing regions.

"There could be a small drop. But we don't expect it to be less than last year's production," Rau said.

But trade officials said excessive rains and pest attacks were likely to dash India's hopes of a rise in coffee output this year and peg it at about last year's levels of 274,000 tonnes.

The board forecast India to produce 196,600 tonnes of robusta this year, up from 180,000 tonnes in the previous year, and 103,700 tonnes of arabica against 94,000 tonnes.

Rau said a "more realistic picture" of the 2006/07 crop would emerge only after the completion of post-monsoon estimates in November.

"There could a small drop but we do not expect it to be less than last year's production," he told the conference.

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Unlike in the past, coffee consumption in non-traditional coffee pockets in the northern, Eastern and western regions of India is surging with steady growth in the last five years on the back flourishing coffee bar culture in the country.

The latest surveys conducted by the Indian Coffee Board as a part of its promotional activities revealed that a sizeable population in non-traditional areas has started accepting coffee as their daily beverage, which is said to be the first victory for India in its efforts to increase the domestic consumption on the lines of Brazil.

According to a paper presented by Radhakrishnan, director for market research in the Coffee Board, consumption almost trebled to 6,435 tonne in 2005 from 2,480 tonne in 2003 in the western parts while it surged to 4,095 tonne from 992 tonnes in the eastern region and climbed to 5,265 tonne from 1,984 tonne in north India.

But consumption in South India marginally declined to 64,405 tonne from 64, 834 tonne, primarily due to slip in consumption in Tamil Nadu. However, the region continues to dominate with 80% of share in all India coffee consumption.

During the same period, the coffee consumption in urban India has increased to 58,500 tonne from 49,600 tonne while it marginally jumped to 21,700 tonne from 20,700 tonne in rural India.

The domestic consumption has shown an annual average growth of 2.1%, pushing up the annual consumption to 80,200 tonne in 2005, from 18,400 tonne in 1951 with per capita consumption growing to 75 grams from 51 grams.

Despite a marginal slip, Tamil Nadu retained its leadership position with cosumption of 22,000 tonne, followed by Karnataka 19,000 tonne (up 3% from the previous estimate), Andhra Pradesh maintaining flat at 13, 000 tonne and Kerala baged fourth place with 10, 000 tonne, witnessing 2% increase over the previous estimate.

In fact, the period between 1980-2000 showed negligible growth in coffee consumption, as the period coincided with the increase in domestic retail prices in India while consumption picked since 2001 on the back of coffee bars and café culture. Official sources said that the Coffee Board would take these statistics as a base for chalking out modalities to double the domestic coffee consumption to 1, 60, 000 tonnes in the next ten years.

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The mascot was launched amidst a gathering of industry leaders, media representatives and several senior technocrats. The official website of the India International Coffee Festival and a short animation film on the "Coffee Swamy" were also launched on the occasion.

Minister of State for Commerce Jairam Ramesh, on unveiling the mascot, said, "We want to establish India International Coffee Festival as a regular branded coffee event in the World Coffee calendar and provide a prominent platform for aggressive marketing and positioning of India."

"Coffee Swami with his infectious smile and enduring character, I am sure will certainly help the Indian Coffee Industry to grow to greater heights. I also would like to see Coffee Swami to aggressively spread Coffee Gyan throughout the length and breadth of the country and to the discerning coffee lovers in the world," added Ramesh.

Also speaking on the occasion, the Chairman of the board GV Krishna Rau, said, " India International Coffee Festival is an effort to appropriately position the diversity and strengths of Coffees of India for the discerning coffee lovers in the world. At the same time it is also an effort to position coffee as a preferred beverage within the Indian market by showcasing the opportunities and advantages to develop internal coffee market. A two pronged approach is designed to generate significant employment in coffee retailing in India and to develop sustainable, robust and vibrant coffee economy in the country."

Coffee Swami, the chosen mascot, represents the coffee bean with its humanoid characteristics. Coffee Swami's big eyes, conceived to observe consumer behaviour, have been developed in keeping with the current market trends. The large bean shaped Mascot represents the rich, satiating heritage of the popular beverage.

"Coffee Swami would make appearances in various locations of your city; coffee outlets, educational institutions and your friendly neighborhood. With the alluring activities, Swami hopes to position Coffees of India at their rightful position." said Coordinator IICF, Anil Bhandari.

The Board also announced the activities for the India International Coffee Festival 2007. It would comprise of several Conference sessions, an Exhibition on coffee, a Buyer-Seller Meet, finals of "Flavour of India - The Fine Cup 2007" competition, pre and post event tours to selected coffee tracts of India and a host of other activities.

Delegates and Speakers from many coffee consuming countries are expected to participate in this event

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