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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (6463)	9/7/1999 10:10:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

AgriBusiness-Consolidated Coffee brands to cost less tata.com R. Mohan (BusinessLine) MYSORE, Sept. 7 CONSOLDIATED Coffee Ltd, a Tata company and the third largest player in the branded market in the country, has cut the prices of its brands effective September 1. The cut, almost certainly to be followed by leading players such as Nestle and Hindustan Lever, indicates the crash in coffee prices in the international markets where it has been a steady downhill for several months now. One of the popular brands of Tata's, Coorg Double Roast, would now cost Rs. 10 to Rs. 15 less per kg, said Mr. Harish Bijoor, Vice-President, Marketing, Consolidated Coffee. A bumper production in Brazil and a good crop in all the coffee growing countries including India this year, has resulted in a fall in international prices. Coffee was being quoted yesterday at 91 cents at London, even as India was gearing up for a record production of 3,00,000 tonnes for 1999-2000 after a high of 2,40,000 tonnes this year. International funds indicated the crash in their own way by staying away from coffee. Even the Indian exporters were worried about the latest trend of discounting of Indian coffee, by between 10 and 15 per cent. This had not happened before. Exporters could then depend on exchange prices quoted for the day, Mr. Bijoor said. But an attempt made by some traders to accept coffee stocks milled on the farm and then sell them off as cheap blends abroad had affected the image of the Indian produce. Mr. Bijoor, however, discounted much of an impact of such discounting. ``Indian coffee still has an image and we can build on it,' he said. His emphasis is on developing the domestic coffee market, where there is excellent scope if promotion is done in a right manner. He is also the chief of a committee named by the industry and the Coffee Board to study the domestic market and then suggest methods for generic promotion. Mr. Bijoor feels that the future of the Indian coffee lies in having a strong domestic market. But it does not mean that exports have to be given up altogether. The domestic market is estimated to be 50,000 tonnes, while the rest, say 2,00,000 tonnes, is being exported. The industry had been so obsessed with exports and the success achieved through it all these years that it had even neglected the steady decrease in the domestic market. Prices, dictated by the international market, rose steadily in India, where even the traditional consumer found tea was a good enough alternative. The promotion plan suggested by Mr. Bijoor calls for an investment of Rs. 30 crores, to which the Coffee Board, the Union Commerce Ministry and the industry would be contributing. ``It is not asking for much, since it is spread over five years and each year it will mean just Rs. 6 crores,' he said. The sum of Rs. 6 crores was something the mega companies selling branded coffee spent for their own promotion campaigns, Mr. Bijoor said. He said despite falling consumption in India, there was good scope for reviving the habit. His own company's promotion campaign had resulted in a 20-per cent growth for the Coorg Roast brand. Promoting coffee habit in India would require money and effort by all concerned, and a gestation period of three years before it could provide substantial returns on investment, he said.