Three cheers for coffee” seems to be the new promotional mantra for the Coffee Board, the nodal agency for the coffee industry, trying its best to make coffee a popular beverage. The Coffee Board’s mascot “Coffee Swami,” is now on several FM radio channels telling listeners through jingles the goodness of coffee.

The Coffee Board has planned 15 different types of activities around the mascot which the industry can use for promotion, marketing purposes for boosting consumption of coffee. The Board thinks that as a beverage, coffee is there in the minds of people, but it is not getting translated into consumption. The basic objective of the promotion is to reach out to those whom coffee has not yet reached.

The reason why the industry is trying to popularise coffee is that domestic consumption of this beverage is just about 20 per cent of the total production. Large export dependence, to the extent of 80 per cent, is exposing the planters to the vagaries of depressed prices in the international market.

Lifestyle statement
Major coffee chains like Café Coffee Day and Barista with artistic ambience and funky feel have elevated the status of coffee to the lifestyle drink. Coffee consumption, says Coffee Board Chairman G V Krishna Rau, has been growing at an annual growth rate of 5 to 5.5 per cent the last five years. “We expect this trend only to accelerate,” Mr Rau effuses adding “It is a very healthy growth rate.”

“With consumers becoming more and more curious to try out varied choices, coffee culture has come to stay,” he observes. Why not, with cafes churning out varied blends and flavours to tickle the tastes of today’s GenX in stark contrast to traditional roasters, coffee may become the choice of the new generation. Echoing similar sentiment, coffee domain specialist Harish Bijoor observes that Indian coffee is at the cusp of the take-off stage, given its rich coffee heritage and cultural practice.

Experience value
Stating that days of purely filter coffee are gone by, Mr Rau says with more than dozen exotic choices available at coffee shops and cafes, it has made consumers willing to experiment and experience value that different options have to offer.

Observing that with entrenched players like Baristas and Cafe Coffee Days and global marquee labels like Costa Coffee and Lavazza pitching their tent having brought certain buoyancy into coffee retail scene, Tata Coffee Managing Director M H Ashraf, however rues that retail coffee concept has not yet caught on with general diaspora. It is still the youth with high disposable income patronise coffee parlours, he notes. The retail scene, says Mr Bijoor, is driven image end, where cafe culture dominates. The other, the volume end, packet coffee dominates. While the latter market is growing at seven per cent annually, cafes are growing at robust 32 per cent per annum in terms of consumption.

Health plank
Further, realisation that coffee is a healthy beverage has seen away serious threat from global MNCs, feels Ramesh Exports’ Chairman & Managing Director Ramesh P Rajah. In the 80s there was aversion to coffee on health grounds. But with scientific studies disproving these ideas, it has brought back traditional coffee drinkers, while younger lot is attracted due to youthful image of coffee shops. The consumption is being driven evenly at 50:50 by both instant coffee and roast and ground segments (liquid or powder form), says Mr Rau.

Creating more value
The key is to overcome the commoditisation of Indian coffee. We need to think value-add. Cafe Coffee Day is a classic example. Barista, too, is making its mark. The value chain is long and deep as well, points out Mr Bijoor.

While at the bottom rung is green bean where value-add is lowest. A notch above is specialty green bean fetching better value thanks to segregation and quasi-branding for which people are willing to pay slightly higher price. Thereafter, you have roasted bean in packaged tin forms, the roast and ground where coffee moves in powder form and higher-end of spectrum, soluble coffee format which go to small cafe chains, through vending machines, to homes in disposables, and branded cafes.

Since consumption of coffee away from home is mainly at restaurants, cafes and vending machines play an important role in out-of-home segment, says Mr Rau citing Coffee Board survey. The north and east have higher potential for out of home coffee, offering excellent opportunity for marketers to increase sales. “If industry players are willing to move fast enough there is enough market to capture. With almost 350 million middle class population we have a large enough market out there,” points out Mr Rau.

Need of the hour
To increase domestic consumption, coffee can be made available in liquid and in other convenient forms. As making coffee in traditional way is cumbersome, we should offer convenience through several formats - from vending machines for mass penetration to liquid coffee decoction for home use and bulk packaged format for restaurants and small coffee chains. Finally, instant coffee for convenience and consistency, both in domestic and overseas markets, says Mr Bijoor.

Pricing of course is a major factor. Unless coffee powder is made available at affordable prices there will be disconnect between modern day cafes and traditional dispensers. The opportunity is there for both. Each are complementary and not competitive.

A lot needs to be done to get the country onto a bandwagon of consumption. Per capita consumption of coffee is low in India at 62 grams as oppose to four to five kgs in developed countries and in many countries in Europe it has crossed 10 kgs per annum. If domestic consumption is lifted to international levels then our production will not be adequate to meet the demand and we may end up becoming net importer in the years to come, elucidates Mr Rau.

Under the 11th Five Year plan period 2007-2012 Coffee Board expects the production of coffee going from 2.50 lakh tonnes to 3.35 lakh tonnes a year. Likewise, export is anticipated to go up from 2.10 lakh to 2.50 lakh tonnes , while domestic consumption rising from 80,000 tonnes to 1.2 lakh tonnes.

Periodic coffee festivals such as India International Coffee Festival, as also niche festivals across various parts of the countries, will help in providing the fillip and visibility to the industry as a whole and promotion, marketing and consumption of coffee within and abroad, feel Mr Rajah.

A focused, three-year coffee marketing programme that brings coffee onto the platform of positive consumption is the order of the days, endorses Mr Bijoor, on a conclusive note.