WORKSHOP ON SECTORAL STRATEGIES FOR EXPORTS

Research Paper

―THE FUTURE PROSPECTS OF INDIAN SPECIALTY COFFEE :

Present Global Scenario and Potential Opportunities‖

Prepared by : Bhanupriya

MBA-IB 3

rd Sem

Roll no. 5

ABSTRACT

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 Arabica and Robusta

variety. It is believed that coffee has been cultivated in India longer than anywhere

outside of the Arabian peninsula.

After the Global coffee crisis, the coffee-producing states of the world have been hit

severly , and currently are considering measures to resucitate their revenues.

Regions like South America, Europe , South East Asia have sterted concentrating on the

Specialty coffee sector which is gaining much popularity around the world and these

countries have their own specialty coffee board too.

This paper examines the prospects of India in the world specialty coffee market and how

the trade can grow if we implement the same in our economy.

LITERATUTE REVIEW Johanna Bankston in her article ―Success for Specialty Coffee Industry‖ talks about the three waves in coffee industry and how the third wave has just started and it can turn around this industry in a good way. First wave was post second world war when the

demand was more than supply . In the 1940s overproduction started . ICA (International

Coffee Agreement was made to counter it. Second wave came in the 60s.Starbucks

entered the market. Cheap and low quality coffee was being produced. As a result,

Global coffee crisis happened. Third wave started in 1990s. High quality coffee and

sustainable manufacturing practices are being encouraged and there is a growing market

for specialty coffee which represents 17% of coffee industry but generates 40% of

revenue.

C.Upendranath in his paper ―Coffee Conundrum: Whither The Future Of Small Growers

In India?‖ analysis the situation of Indian coffee industry and seeks to identify critical

issues in the coffee sector. The analysis points that, vertical integration of small

producers is important in order to enhance value for the primary producers.Product

diversification (to quality coffees) quality improvement, mechanization of operations, post-

harvest processing, would enable small growers to remain in production chain with cost

competitiveness specialty coffees exhibited higher margins at the retail leveland is more

likely to find ‗high quality‘ brands dominating the high-end market in retail chains.

Authors M. Laura Donnet, Thomas D. Jeitschko and Dave D. Weatherspoon in their

paper titled ―The Impact of E-Auctions in Adjusting Procurement Strategies for Specialty

Coffee‖ observe that The US specialty coffee market size is estimated to be $12.27bn in

2006 and more recently,the advancements in information technologies enabled the

development of electronic auctions (e-auctions) for evaluating and purchasing high quality

coffee supplies. Since the appearance of e-auctions, the annual value of sales in the

specialty coffee market has steadily increased in size.

Author R.Naidu in his paper ―Development of Special and Specialty Coffee sector - R &

D efforts of the Coffee Board‖ highlight the activities of the Coffee Board of India's

programme 'Development of Special and Specialty Coffees'. The objective of this

programme is to create awareness among coffee growers on the identification and

production of special and specialty coffees, which are seen to have good potential for

growth in the world market.

Their activities include identification of estates with good prospects for production,

evolving suitable agronomic and postharvest practices, training of coffee growers,

creating awareness among growers, traders and exporters, and promoting Indian special

and specialty coffees in the international market.

Stefano Ponte in his paper ‗The Latte Revolution‘:Regulation, Markets And Consumption

In Global Coffee Chain‖ points out that during the coffee crises, the quality of coffee

decreased and Brand competition increased.

In this background, the emergence of specialty coffee industry took place. Specialty

coffee is a high quality coffee with limited availabilitydifferent in flavoring packaging and

consumer experience .Coffee industry consolidation is taking place due to the efforts of

giants like Starbucks which are educating customers about the specialty coffee.

Ramesh V Bhat in his report ―Review of Coffee Quality / Safety Management and Control

in India‖ suggest that The emphasis in pattern of coffee growing in India is shifting from

economic viability in terms of profits and returns to environmental aspect of sustainability.

There is a move towards growing more of differentiated subset of sustainable coffees like

―organic, fair trade and eco friendly‖, and value based products on accounts of distinct

origin, specialized processes or exceptional characteristics such as superior taste or zero

defects. It is in this context, in India, the problem of improvement of ―Coffee safety‖ in

addition to ―coffee quality‖ is to be considered.

Daniele Giovannucci and Joost Pierrot and Alexander Kasterine in their paper ― Trends in

the Trade of Certified Coffees‖ observe that Certified coffee is no longer an

inconsequential market niche. The sustainable coffee segment(specialty coffee) has been

increasing by about 20-25% each year compared toabout 2% for conventional coffee.

Major corporations are becoming increasingly interested inthis segment and so it is likely

that this trend will continue.

INTRODUCTION The saga of Indian coffee began on a humble note, with planting of ‗Seven seeds‘ of

‗Mocha‘ during 1600 AD by the legendary holy saint Baba Budan, in the courtyard of his

hermitage on ‗Baba Budan Giris‘ in Karnataka. For quite a considerable period, the plants

remained as a garden curiosity and spread slowly as back yard plantings. It was during

18th century that the commercial plantations of coffee were started, thanks to the success

of British entrepreneurs in conquering the hostile forest terrain in south India.

Since then, Indian coffee industry has made rapid strides and earned a distinct identity in

the coffee map of the world. Coffee in India is grown under a canopy of thick natural

shade in ecologically sensitive regions of the Western and Eastern Ghats. This is one of

the 25 biodiversity hotspots of the world. Coffee contributes significantly to sustain the

unique bio- diversity of the region and is also responsible for the socio-economic

development in the remote, hilly areas.

In India, coffee is traditionally grown in the Western Ghats spread over Karnataka, Kerala

and Tamil Nadu. Coffee cultivation is also being expanding rapidly in the nontraditional

areas of Andhra Pradesh and Odisha as well as in the North East states.

Coffee is predominantly an export oriented commodity and 65% to 70% of coffee

produced in the country is exported while the rest is consumed within the country.

Indian coffee has created a niche for itself in the international market and the Indian

Coffees are earning high premium, particularly Indian Robusta which is highly preferred

for its good blending quality. Arabica Coffee from India is also well received in the

international market.

Coffee is an export product with low import intensity and high employment content. This

is evident from the fact that more than six lakh persons are directly employed and an

equal numbers of individuals get indirect employment from this sector.

The two main varieties of coffee viz., Arabica and Robusta are grown in India. Arabica is

mild coffee, but the beans being more aromatic, it has higher market value compared to

Robusta beans. On the other hand Robusta has more strength and is, therefore, used in

making various blends.

Arabica is grown in higher altitudes than Robusta. The cool and equable temperature,

ranging between 150C to 250C, is suitable for Arabica while for Robusta, hot and humid

climate with temperature ranging from 200C to 300C is suitable. Arabica requires more

care & nurture and is more suitable for large holdings whereas Robusta is suitable

irrespective of size of the farm.Arabica is susceptible to pests & diseases such as White

Stem Borer, leaf rust etc., and requires more shade than Robusta. The harvest of Arabica

takes place between November to January, while for Robusta it is December to February.

COFFEE PRODUCTION IN INDIA

Coffee in India is grown in one of the world‘s rainiest inhabited region that receives 2,500

to 4,000 mm rainfall spread over 100 days, followed by more than 100 days of continuous

dry period. Indian coffee is grown under a thick natural shade. This is one of the 25

biodiversity hotspots of the world and is home to a large diversity of butterflies (331

species), amphibians (121 species), reptiles (157 species), birds (508 species) and

mammals (120 species), and is flanked by orchids and a large number of medicinal and

aromatic plants.

Coffee production in India grew rapidly in the 1970s, increasing from 68,948 tonnes in

1971–72 to 120,000 tonnes in 1979–80 and grew by 4.6 percent in the 1980s.It grew by

more than 30 percent in the 1990s, rivalled only by Uganda in the growth of production.By

2007, organic coffee was grown in about 2,600 hectares (6,400 acres) with an estimated

production of about 1700 tonnes. According to the 2008 statistics published by the FAO,

the area of coffee green harvested in India was 342,000 hectares (850,000 acres),with

yield estimates of 7,660 hectogram/ha,forming a total production estimate of 262,000

tonnes.

There are approximately 250,000 coffee growers in India; 98% of them are small growers.

Over 90 percent of them are small farms consisting of 10 acres (4.0 ha) or fewer.

According to published statistics for 2001–2002, the total area under coffee in India was

346,995 hectares (857,440 acres) with small holdings of 175,475 accounting for 71.2%.

The area under large holding of more than 100 hectares (250 acres) was 31,571 hectares

(78,010 acres) (only 9.1% of all holdings) only under 167 holdings. The area under less

than 2 hectares (4.9 acres) holdings was 114,546 hectares (283,050 acres) (33% of the

total area) among 138,209 holders.

RESEARCH AND DEVELOPMENT

Coffee research and development efforts are well organised in India through its COFFEE

RESEARCH INSTITUTE, which is considered the premier research station in South East

Asia It is under the control of the Coffee Board of India, an autonomous body, under the

Ministry of Commerce and Industry, Government of India, which was set up under an Act

of the Parliament with the objective of promoting ―research, development, extension,

quality up gradation, market information, and the domestic and external promotion of

Indian coffee.‖. It was established near Balehonnur in Chikmanglur district of Karnataka,

in the heartland of coffee plantations. Prior to establishing this institute, a temporary

research unit was established in 1915 at Koppa primarily to evolve solutions to crop

infestation by leaf diseases.

This was followed by the field research station established by the then Government of

Mysore, titled "Mysore Coffee Experimental Station," in 1925. This was handed over to

the Coffee Board which was formed in 1942, and regular research started at this station

from 1944. Dr L. C. Coleman is credited as the founder of coffee research in India. The

Coffee Board of India is an autonomous body, functioning under the Ministry of

Commerce and Industry, Government of India. The Board serves as a friend, philosopher

and guide of the coffee industry in India. Set up under an Act of the Parliament of India in

the year 1942, the Board focuses on research, development, extension, quality up

gradation, market information, and the domestic and external promotion of Indian coffee.

KEY MARKETS AND EXPORT DESTINATIONS

India is the seventh largest coffee producer in India and the third largest in Asia.

In 2013-14, India‘s coffee exports stood at 313,025 metric tonnes, generating a

revenue of US$ 793.22 million

India exports coffee to over 45 countries, over 50 per cent of Indian exports in

2013-14 headed to Europe.

Italy is the largest market importing more than 25 per cent from India, followed by

Germany, Belgium, Turkey and the Russian Federations.

In 2012-13, India's coffee exports generated a revenue of US$ 959.47 million.

COFFEE BOARD OF INDIA

In the interim, the coffee industry in India has experienced great fluctuations in fortunes.

Initially the spread of commercial Arabica plantations was rapid in the hills of present day

Karnataka, Kerala and Tamil Nadu states, till 1860‘s. Within next few years, major out

breaks of pests and diseases like white stem borer, green bug and leaf rust posed a

serious threat to the flourishing coffee industry. The continuous ravages of white stem

borer and leaf rust spelled doom for Arabica plantations whose area started declining

alarmingly. This necessitated introduction of tolerant robusta from Indo-China region

towards the 1900‘s and initiation of research efforts to search for remedial measures.

Coffee Board & its functions

During 1940‘s, the coffee industry in India was in a desperate state due to the II World

war resulting in very low prices and ravages of pests and diseases. At this time, the

Government of India established the ‗Coffee Board‘ through a constitutional act ―Coffee

Act VII of 1942‖ under the administrative control of Ministry of Commerce and Industry.

The Board comprises 33 members including the Chairman, who is the Chief Executive

and appointed by the Government of India. The remaining 32 members represent the

various interests such as coffee growing industry, coffee trade interests, curing

establishments, interests of labour and consumers, representatives of governments of the

principal coffee growing states, and Members of Parliament.

Role of Coffee Board

After pooling was discontinued in 1996, Coffee Board serves as the friend, philosopher

and guide to the Coffee sector covering the entire value chain. The core activities are

primarily directed towards research & development, transfer of technology, quality

improvement, extending development support to growing sector, promotion of coffee in

export and domestic markets. The activities of the Board are broadly aimed at (i)

enhancement of production, productivity & quality; (ii) export promotion for achieving

higher value returns for Indian Coffee and (iii) supporting development of Domestic

market.

Research Department

Organized research in coffee was initiated during 1925 by the erstwhile Mysore

Government by setting up the Mysore Coffee Experiment Station near Balehonnur in

Chikmagalur district. After formation of the Board the research station was brought under

its administrative control. Presently the Research Department of the Board with its

headquarters at the Central Coffee Research Institute and five regional stations has a

sanctioned strength of 113 scientific personnel and is involved in development of

improved varieties with tolerance to major pests and diseases and standardization of

technology for improving production, productivity and quality.

Extension Wing

The Extension wing of the Board is a vast network of extension units located in all the

major coffee growing zones with a sanctioned strength of 278 technical personnel. The

extension personnel are involved in dissemination of latest technologies to the growers,

organizing capacity building programmes to the growers and farm workers,

implementation of various development support, risk insurance and labor welfare

schemes of the Board and other activities like crop estimation, crop losses etc.

Market Research & Intelligence Unit

The Board has a Market Intelligence Unit functioning from its head office at Bangalore.

The unit undertakes various activities related to market information & intelligence, market

research studies, crop forecasting and coffee economics aspects. The unit also

undertakes studies on research related to the coffee trade including WTO issues. Notable

publications include the daily market intelligence report and a comprehensive database

on coffee (Quarterly). The periodical reports that are already completed include Coffee

Consumption in India 2001, 2003, 2005, 2008, 2009 and Attitude towards coffee drinking

2007. The unit coordinated studies on (i) logistics and competitiveness of coffee

producing countries (India, Vietnam & Brazil) (ii) MAI Scheme on promotion of Indian

coffee exports to Russia and CIS countries (iii) Transaction Costs of Indian Coffee

Exports and a manual on coffee retailing. The unit also coordinates the implementation of

Price Stabilization Fund Scheme of Govt. of India and Rainfall Insurance Scheme for

Coffee growers. The Unit maintains the Board‘s official website.

Promotion Department

The Promotion Department looks after the promotion of Indian coffee in export market

and promotion of coffee consumption in the domestic market.

Role in Export Promotion

After liberalization in 1996, the marketing functions were deregulated. The exports are

carried out by the Exporters. Hence the Coffee Board plays the role of facilitator and

promoter of Indian coffee exports. However, registration of exporters is the responsibility

of the Coffee Board. The total number of registered coffee exporters are about 395.

Further, the Board issues, under the Section 20 of the Coffee Act, 1942, Permits for

Export of Indian Coffee. Additionally, the Certificates of Origin are also issued as per the

provisions of the International Coffee Agreement.

Under Export Promotion scheme, exports of Value added coffees in retail packs and

export of coffee to high value far-off destinations are incentivized to offset the transaction

costs to some extent and enable the Indian exporters to be competitive in the export

market. These incentives provide opportunities to expand the footprint of Indian Coffee in

higher value destinations like USA, Japan, Canada, Australia, New Zealand etc on one

hand and reinforcing presence in our traditional markets i.e., European Union/ Russia and

CIS etc.

Besides, the Board regularly participates in the major coffee trade shows/ exhibitions held

in major consuming countries to promote awareness about quality of Indian coffee to the

overseas roasters, traders and consumers. The Board also conducts Flavour of India-

The Fine Cup competitions to select fine coffees and expose them to export market.

Role in Domestic Promotion

The Department promotes coffee consumption in the country through 12 India Coffee

Houses located in major cities across the country. Besides, the department participates in

the national level exhibitions & trade fairs to create awareness about the Indian coffee

among the consumers and educates the consumers about positive effects of coffee

consumption on human health.

CURRENT MARKET SCENARIO

Estimated Domestic Consumption (From 2000)

Calender Year Quantity (in MT)

2000 60000

2001 64000

2002 68000

2003 70000

2004 75000

2005 80200

2006 85000

2007 90000

2008 94,400

2009 102,000

2010 108,000

2011 (prov.) 115,000

Production Of Coffee In Major States/Districts Of India(in Mts)

State/District

Post Blossom Estimation 2014-15

Final Estimate 2013-14

Arabica Robusta Total Arabica Robusta Total

Karnataka

Chikmagalur 41,170 40,000 81,170 38,250 30,640 68,890

Kodagu 20,150 113,000 133,150 21,040 90,820 111,860

Hassan 19,380 14,600 33,980 19,150 11,200 30,350

Sub total 80,700 167,600 248,300 78,440 132,660 211,100

Kerala

Wayanad 0 57,900 57,900 0 56,425 56,425

Travancore 900 7,300 8,200 900 6,700 7,600

Nelliampathies 1,175 1,600 2,775 1,100 1,550 2,650

Sub total 2,075 66,800 68,875 2,000 64,675 66,675

Tamil Nadu

Pulneys 7,575 375 7,950 6,975 325 7,300

Nilgiris 1,600 3,775 5,375 1,800 3,950 5,750

Shevroys (Salem) 2,700 50 2,750 3,875 50 3,925

Anamalais (Coimbatore)

1,300 500 1,800 1,300 500 1,800

Sub total 13,175 4,700 17,875 13,950 4,825 18,775

Non Traditional Areas

Andhra Pradesh 8,790 70 8,860 7,250 70 7,320

Orissa 620 0 620 440 0 440

Sub Total 9,410 70 9,480 7,690 70 7,760

North Eastern Region

140 80 220 120 70 190

TOTAL COFFEE EXPORTS 2013-14

THE WORLD COFFEE CRISIS While the most recent period recorded good growth, the early part of 2000, the global

coffee industry experienced its worst crisis which necessitated a fundamental re-thinking

on the future challenges and strategies required to ensure survival and growth, from the

producers‘ perspective.

To begin with, the supply constraint caused by the frost in Brazil in the mid nineties was

followed by a period of abnormally high prices which in turn prompted a surge in

production that substantially altered the global production structure. 8 Following over

production, the prices fell substantially and the slump has affected the incomes of small

growers. In several countries across Africa, Latin America and Asia, the slump in coffee

prices resulted in a deep socio-economic and humanitarian crisis.

The coffee crisis saw increased cost of production nd as in 2004-2005, fall in coffee

prices a 100-year-low. Many growers

had to even sell their estates and were heavily indebted. Studies

conducted during mid 2000 identified the impact of global coffee crisis on plantations in

South Indian states

As opposed to some parts of the world, where the crisis was causing chaos, the evolution

of the coffee economy in consuming countries, which are predominantly in the Western

Hemisphere, was proving more fruitful,showing a positive growth pattern with a sustained

improvement in profits.

This was all due to the emergence of a growing coffee culture, which relied heavily on the

new and innovative retail chains such as Starbucks, and the coffee brands Nescafe and

Illy in the consuming countries.

According to a paper, by the International Coffee Organizationon the coffee crisis, some

coffee farmers have shown enormous resilience,be at some cost, and one way or another

most have managed to survive and continue to produce. However, on balance, there

appears to be a bleak future for small growers in India unless steps are taken towards

improving quality and sustainable production and marketing.

At the same time, during the periods of crisis, large private estates and companies with

interests in curing and roasting appeared to have expanded their businesses in India.

Tata Coffee has consolidated its interests during this period; Amalgamated Bean Coffee

Trading Company (ABCL) has expanded in terms of area under coffee plantations as well

as curing capacity, Hindustan Lever also recorded growth.

CHALLANGES FACED BY INDIAN COFFEE MARKET POST THE GLOBAL COFFEE CRISIS :

1. Coffee cultivation in India is closely linked to the livelihoods of a million workers and

over 200,000 small growers, who contribute over 60 per cent of the production. It is also

grown in ecologically fragile zones of India and hence it warrants special attention in

termsof environmental sustainability and livelihood sustainability of the people. A delicate

balance hence needs to be maintained in addressing issues related to coffee production.

Given the fact that over 80 per cent of operational holdings are below 2 hectares,

economic viability of coffee cultivation by small growers assumes great importance.

Mechanisms for supporting such groups of planters become an important goal for

ensuring sustainability of production and livelihoods. Coffee still remains as an important

commodity in the export basket of the country.

2. Given the nature of the commodity and the production dynamics, Coffee cultivation is

mired with cycles of boom and busts.There are several risks and vulnerabilities from the

production and trade fronts. Global concentration of trade left very little scope for the

producers to respond and price volatility has created ripples in the livelihoods of the small

growers.

3. Coffee Production in traditional coffee growing areas appears to have reached

threshold in several aspects. Coffee in new areas is supported by the Coffee Board and

other institutions and there need to reach productivity to satisfactory levels. Conservation

and coffee production practices are increasingly coming under strain in several parts of

coffee producing districts.

4. Coffee Trade is heavily concentrated and there are several limitations for the small

growers to engage in post-harvest processing and value addition.

5. Price discovery is primarily through comparison with respect to International markets

and planters are abreast with such information through media and new ICT related

interventions like online trading platforms. However, there is lukewarm response to

participate in auctions (online) and futures trade as planters.

6. Labour shortage and limited scope for introducing technology (labour saving) is

repeatedly identified as one of the production constraints.

7. There are several emerging issues that merit detailed studies.They range from

strategies for improving production and productivity, diversification, marketing and

product diversification to identify thescope for domestic consumption.

Such studies need to be facilitated by the Coffee Board, research institutions, INGOs and

private sector.

DEVELOPMENT OF COFFEE SECTOR AROUND THE WORLD Specialty coffees exhibited higher margins at the retail level, but supermarkets‘ own

brands have not been able to enter the specialty segment in a meaningful way. It is more

likely to find ‗high quality‘ brands dominating the high-end market in retail chains.

Increasing and sustaining coffee farmers‘ income (and especially smallholders‘) in

African-Caribbean and Pacific (ACP) countries is an important policy goal, 16 that must

also be integral to the marketing goals of not only small and marginal growers, but also

the many stakeholders of the coffee industry in India. The emergence of Vietnam and

resurgence of Brazil in early 2000 have lowered the cost structure for coffee production. It

is observed that the average production of the three top producer‘s viz., Brazil, Vietnam

and Columbia constitutes around 55% (average of three years) of global production in

2010. The medium term projection of coffee forecasted around 2010 that ‗the outlook is

likely to be dominated by the biennial nature of Brazil‘s production that will significantly

influence the annual demand supply balance‘

The U.S. specialty coffee market size was estimated to be $12.27 bn in 2006 (SCAA

2006). The quality of sensory attributes differentiates specialty coffee from regular and

premium coffee. According to the SCAA definition, specialty coffees have an outstanding

quality in the cup, which results from the unique growing conditions and cultivation

practices at the production stage.

These beans when roasted give a unique flavor profile that the specialty coffee roaster

―interprets‖ through a particular roasting. Freshness is a central aspect of specialty coffee

quality since once coffee is roasted it is difficult to preserve the volatile compounds

responsible for the coffee aroma.

More recently, advancements in information technologies enabled the development of

electronic auctions (e-auctions) for evaluating and purchasing high-quality coffee

supplies. Indeed,since the appearance of e-auctions, the annual value of sales in the

specialty coffee market has steadily increased in size. Leading-edge sub-sectors such as

coffee, cocoa and tea have evolved socio-economic and environmental standards that

are commonly called sustainability standards. More of these exist for coffee than any

other crop.

SPECIALTY COFFEE

Speciality coffee is defined as a crafted quality coffee-based beverage, which is judged

by the consumer (in a limited marketplace at a given time) to have a unique quality, a

distinct taste and personality different from, and superior to, the common coffee

beverages offered. The beverage is based on beans that have been grown in an

accurately defined area, and which meet the highest standards for green coffee and for

its roasting, storage and brewing.‖

Specialty coffee" was first used in 1974 by Erna Knutsen in an issue of Tea & Coffee

Trade Journal. Knutsen used this term to describe beans of the best flavor which are

produced in special microclimates.

The specialty segment is the most rapidly growing portion of the coffee industry. In the

U.S., specialty coffee has increased its market share from 1% to 20% in the last 25

years.To promote and self-regulate the industry, growers, exporters, roasters, retailers

and equipment suppliers have established trade associations. These associations exist in

both coffee-consuming and producing countries.

Associations in consuming countries

Specialty Coffee Association of America

Speciality Coffee Association of Europe

Specialty Coffee Association of Japan

New Zealand Coffee Roasters Association

Singapore Coffee Association

AustralAsian Specialty Coffee Association

Specialty Coffee Association of Korea

Associations in producing and consuming countries

Specialty Coffee Association of Bolivia

Brazil Specialty Coffee Association

Colombian Coffee Federation

Specialty Coffee Association of Costa Rica

East African Fine Coffees Association

Itzalco Fine Coffee Association of El Salvador

Specialty Coffee Association of India

Specialty Coffee Association of Indonesia

Asociación de Cafes Especiales de Nicaragua

Association of Special Coffees of Panama

Specialty Coffee Association of Southern Africa

Specialty Coffee Association of Korea

Specialty coffees are high quality coffees that differ from normal coffee with relevance to

visual quality or cup or both. Specialty coffees are broadly classified into five categories

based on their unique features:

1. Decaffeinated Coffee

With caffeine removed artificially are known as decaffeinated coffees. There is a

prominent segment of consumers preferring decaf coffees owing to health

consciousness.

2. Organic Coffees

The coffee grown without using chemicals and pesticides are in great demand in the

developed countries because of increasing awareness on health of consumers and

protection of environment.

3. High Grown Coffees

The coffees grown at higher elevations i.e. 4000 ft and above are known to possess a

distinct flavour and acidity in cup due to slower development of beans. The coffees are of

high quality with dense beans.

4. Estate Coffee (Single Origin Coffees)

Production of good quality coffee by highlighting the special features of the estate can be

classified as estate branded coffees. This may be elevation, variety, cultural practices and

special processing techniques. Estate coffees are those that originate on single form with

common soils and with the distinct identity in terms of flavour and aroma characteristics.

Estate coffees are generally more expensive and actually define the specialty coffee

market.

5. Variety Coffee

Some of the varieties are known to possess good inherent quality due to the genetic

makeup of the plant. Fruits from such varieties can be harvested and processed

separately to retain the unique quality. Some of the Indian selections like Kents, Agaro,

Cioccie, CxR are unique in their cup quality. Separate processing of these varieties help

in processing their intrinsic quality.

SPECIALTY COFFEES OF INDIA

Monsooned Malabar AA

Centuries ago, when coffee beans were transported to Europe in sailing ships, a

‗wonderful‘ accident occurred. Monsoon winds caused the beans to swell, change colour

and acquire an intensely-mellow flavour that won connoisseurs over. Today, this magic is

recreated by ‗monsooning‘ the finest Arabica beans to produce a world-famous specialty

coffee.

Monsooned coffee or coffee beans ‘swollen‘ with moisture from the air, is prepared at the

curing works situated on the West Coast of Southern India. Stored in special warehouses,

moist monsoon winds circulate around the coffee beans, making them swell in size and

take on a mellowed but aggressive, musty flavour. This process yellows the bean and

reduces the acidity, imparting a heavy, syrupy flatness reminiscent of aged coffees.

For preparing monsooned coffees only dry processed Arabica and Robusta beans are

used. The coffees are mainly used in blends to mellow and impart richness to rougher,

more acidy coffees. The best grade in monsooned coffee is Monsooned Malabar AA.

Mysore Nuggets Extra Bold

The might and grandeur of the monolithic Nandi bull statue on Chamundi Hills of Mysore,

is reflected in these large, exotic Arabica beans that make this rare, premium specialty

coffee, a connoisseur‘s delight.

These wonderful and exotic coffees are prepared from washed Arabicas grown in the

regions of Chikmagalur, Coorg, Biligiris, Bababudangiris and Shevaroys. The beans are

very large, uniform bluish-green in colour, with a clean polished appearance. In the cup,

the coffee exhibits full aroma, medium to good body, good acidity and fine flavour, with a

hint of spice. This is a rare, premium coffee and truly represents the best quality coffee

from India.

Robusta Kaapi Royale

The stately elephant with its howdah - a canopied seat bedecked with flowers and jewels

used during a ceremonial procession – is a sign of Indian royalty. Much like this king of

specialty Indian ‗kaapis‘, prepared from bold Robusta beans of the best quality.

This coffee is prepared from Robusta Parchment AB from the regions of Coorg,

Wayanad, Chikmagalur and Travancore. The beans are bold, round with pointed ends,

and grey to bluish-grey in colour. The cup ensures full body, soft, smooth and mellow

flavour.

FUTURE PROSPECTS

Like the specialty coffee industry in China, India faces the challenge of finding ways to

educate a mostly tea-drinking population about the fine distinctions between different

coffees.

Specialty coffee in India has not yet matured, where consumers are aware of the nuances

of varietals and origin.Basic coffee knowledge is very poor in India. Today, most

consumers will only drink a coffee or whatever is served in the various cafes. There has

been effort from Coffee Board of India and the Specialty Coffee Association of India to

educate the consumer, but it will take a while as coffee consumption increases.

The political upheaval in some parts of the world makes India look like a more attractive

place to open a coffee business. There are some companies that would have looked at

developing businesses in the Middle East and also in Africa that are seeing India as a

really attractive, stable market economy where they can set up shop and be able to

conduct business and expect to get some new profits from a new market that wasn‘t there

before—and probably much more so than even China.

The middle class is the champion of consumer business.There‘s definitely a very well-

educated, hard-working young force of high-school and college-age kids, recently

graduated, that perhaps for the first time in the country‘s history are leaving school and

going directly into white-collar jobs,seen as the real driving force in specialty coffee right

now.

CONCLUSION

As the world specialty coffee market is growing, so is the potential for Indian specialty

coffee too.

The specialty coffee of India is growing in popularity around the world owing to the

globalisation of the coffee industry by coffee giants like Starbucks , Costa coffee etc.

There is a need to promote the Indian label on the specialty coffee market and create

brand value globally. Indian coffee board and Indian specialty coffee association are

making efforts to promote the Indian coffee abroad and providing the farmers with the

tools and funds necessary to produce high quality coffee beans and state of the art

infrastructure to develop the coffee industry.Therefore, owing to the increasing global

market of specialty coffee consumers , there is a need to concentrate on and empower

the specialty coffee segment of India.

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