Coffee

Introduction

India produces 260mn Kgs of coffee per year. Indian coffee production has a yield of 800-900 kg per hectare, which is low compared to the world average of 1,100 kg per hectare. Over 1998-99 the yield has increased from 740 kg per hectare to more than 850 Kg per hectare in 1999-00. The area under coffee cultivation is approximately 3.1 lakh hectares. Domestic coffee output is expected to touch 2,92,000 tonnes in 1999-00

Production area

In India, coffee bean cultivation is largely confined to the hilly regions of the southern states of Karnataka, Tamil Nadu and Kerala.

Growth promotional activities

Only one fifth of the coffee bean produced in India every year is consumed in the domestic markets, while rest of it is exported.

Most of the exports are to Russian Federation, Germany, Italy and US. Till recently, the Coffee Board directed coffee sales in India. Coffee growers with a total coffee cultivation area of above 10 hectares were required to sell a minimum of 30% of their production to the Coffee Board. This quota system has now been abolished to encourage exports and now growers can export 100% of their produce In order to boost the coffee consumption the coffee industry has started emphasizing on three channels of distribution, namely Cafe chains, vending machines and ready to drink products. While the industry expects vending machine to contribute 45% of the volume followed by cafe chains with 40% of the consumption market.

Types

Coffee market can be segmented as instant and filter coffee. Filter coffee can further be segmented into pure and chicory blend coffee.