Coffee
Specialty coffee in India is blindly copying the USA’s industry
The main thing is to keep the main thing the main thing. — Stephen Covey
In the coffee business coffee beans are everything. Without the high quality coffee beans, the coffee industry is mostly about trading an agricultural commodity and making mass market products such as instant coffee. Thanks to coffee chains such as Cafe Coffee Day, Barista, Costa, Starbucks and Blue Tokai, the coffee is getting the attention like never before.
Indian specialty coffee is just 6% of the entire Indian coffee industry. Instant coffee and traditional filter coffee makes the rest of the industry. Indian coffees have unique aromatic and flavour characteristics such as spices. If farmers grow a good crop and process it right, it is at par with the best coffees in the world such as Ethiopian, Brazilian and Central American Geisha. After all, India grows few of the best teas in the world.
The success of specialty coffee in the USA, Europe and China is turning it into Gold rush. At the Coffee Board’s course more people are from Karnataka, Tamil Nadu and Kerala than other states. Small plantation owners, traditional roasters and retailers see a pot of gold in the specialty coffee movement.
But, knowing coffee, getting good coffee and getting into the trade is only the first step. The struggle starts with the business model. Most are either copying Blue Tokai, with an online shop and a cafe. Or they see an opportunity in the downfall of Cafe Coffee Day. CCD owned more than 2000 cafes at its peak. It also owns the coffee vending business in the offices and organisations.
Yesterday Srikant Rao of Bayar’s Coffee gave a talk. He busted two myths. One, most coffee players call good commercial grade coffee as specialty. Two, India does not drink coffee not due to the tea being better, but being more accessible beverage. He predicted that cafe segment will see a growth of 15% annually for the next few years. He also predicts that it is difficult to wean people away from the legacy brewing methods such as filter coffee. Darshinis are a great example of not giving an inch of space to QSRs. They have learnt to coexist, no compete.
My takeaway from the course is to tread on two paths. One, learn about the coffee beans, processing, equipment as much as possible. Two, focus on business models, and not use the novelty of specialty coffee or third wave coffee to build the business.
Coffee, not jargon:
1. You are not your customer Link
2. Marketing myopia Link