Coffee India

by

Growers face challenges but are successfully adapting to trends, new ideas, and markets.

BENGALURU, India

By Aravinda Ananatharaman

India ranks 6th among the world’s 80 coffee producing countries, with some of the finest robusta and some top-notch arabica made here. Nearly 70% of India’s coffee is exported, largely to European and Asian markets. Coffee in India is traditionally grown in the rainforests of the Western Ghats in South India, covering Chikmagalur, Kodagu (Coorg), Wayanad, the Shevaroy Hills, and the Nilgiris.

This is where coffee plantations originated and remains the main source of coffee production enjoying adequate rainfall followed by dry weather. India is also unique in cultivating only shade-grown, handpicked, and sundried coffee, a matter of pride for the industry. Seasons of harvest are October through February for arabica and November through March for robusta. Indian coffees are described as heavy, creamy, and complex with low acidity.

Coffee production

India grows significant quantities of both arabica and robusta. Volume in the traditional coffee growing areas in the Western Ghats has reached the maximum expansion possible. New areas suitable for coffee have been identified in the Eastern Ghats, in the states of Andhra Pradesh and Odisha, and in the states of northeast India. Referred to as the non-traditional areas, most of these are tribal regions, and coffee has been introduced to settle the tribal communities and offer them a sustainable livelihood.

This exercise has been far more successful in the Eastern Ghats, partly from an acceptance of agrarian options but also because there are fewer on-ground challenges (poverty, insurgency) allowing the state governments to implement this program. These new areas grow arabica, and entirely organically. At the moment, the combined contribution from here is only about 3% of the total annual production. Still, it is an important step, and carries the potential to produce some fantastic coffee, because of their rich terroir, suitable elevation, and an interesting variety of shade plants that contribute to diverse and exciting flavors.

The production of arabica and robusta has reached a plateau. The demand has shifted to estate-branded and single-origin coffees. Coffee growers are also focusing on sustainability and towards making their coffees more premium. In 2002, the Coffee Board of India introduced the Flavor of India awards that invites estates and producers to send their coffees to the competition. It has been an opportunity to highlight the farmers and their coffee.

Superior robusta

Coffee expert Sunalini Menon, says, “The robusta we produce here is perhaps the best in the world. Our biggest advantage is that we have always treated arabica and robusta equally, with the same care given to both.”

The efforts have been worth it, and as Sunalini calls it – the story of the ugly duckling. World over, robusta has suffered the reputation of being inferior to arabica but as Sunalini says, breaking the stigma attached to the robusta has been the big fight. India offers a high altitude, shade-grown terroir to produce a subtle but complex robusta.

The story of Araku Valley

Until recently, Indian coffee had two globally protected GI (geographical indication) tags one each for Monsooned Malabar Arabica and Monsooned Malabar robusta coffees, both exceptionally unique coffees. In March 2019, five additional coffees were recognized for GI tagging – Araku Valley arabica, Coorg arabica, Chikmagalur arabica, Bababudangiris arabica, and Wayanad robusta. Of these, the Araku Valley is a coffee with a distinct story. It’s grown in the Eastern Ghats of Andhra state, in a hilly terrain at an elevation of 3000 feet (900 meters), shade-grown under silver oak trees. The local populations are the tribal Girijans, who have created what is believed to the be world’s largest organic coffee collective. Non-governmental organizations such as the Naandi Foundation support 25,000 Araku Valley growers producing 100% organic and fair trade certified beans.

Now, with the GI tags, the Coffee Board of India hopes these coffees have one more claim to a better price while showcasing their high quality and uniqueness.

While the cooperative system offers a replicable model that has worked at Araku, it has not been replicated elsewhere in the country. This is especially so since there are a great many small producers and the coffee board has been urging them to form groups to optimize resources and have a better bargaining advantage. Tentative steps have been taken with 5-6 groups that are working together, and proactively pursuing quality. They are also adding certifications like the Rainforest Alliance-UTZ towards this end.

Coffee producers are also being encouraged to diversify into other crops, for better economic returns. Crops like pepper have always been planted with coffee but now there’s a move to grow avocado and other exotic fruits as well.

Another focus of development for the coffee board has been to provide marketing support and assistance in helping producers add services locally to move up in the value chain.

New markets

Korea and Japan are new exporting partners contributing to demand for Indian coffees. The top five destinations are Russia, Italy, Germany, Belgium, and Spain. Coffee is the seventh-largest agricultural product traded legally, generating more than $20 billion annually in trade. The average composite price remains low, dampening prospects for coffee exporting nations.

As India’s domestic market grows in wealth, awareness programs are ongoing. The coffee board offers programs in coffee brewing. Coffee roasteries in the metro areas and the cafes they supply are attracting millennial customers seeking single-estate coffee made well. These new cafes buy locally grown coffee and imported green beans and promote consumption with cupping sessions and tasting menus. The India Coffee House, founded in 1936 in Bombay, is a venerated institution and the largest restaurant chain in Kerala. The 400-store venture, operated by workers’ cooperatives since the 1950s, is now open to franchising, with several new shops opening in 2019.

Climate and environment

The Indian coffee industry is still recovering from last year’s severe floods. The worst affected areas were Kodagu (Coorg) and parts of Kerala state - important coffee regions; in fact, Karnataka, the home state to which Kodagu belongs, accounts for two thirds the total population. There was a crop loss of nearly 20%, worsened by landslides that affected 1,000 hectares of prime coffee area.

Export volumes for the year ending March 31, 2019 were down by 9% as compared with the previous year. The coffee board is expecting a bleak year ahead with the projected post-monsoon estimate being a 1% increase in crop, at 319,000 metric tons (95,000 MT arabica and 224,500 MT robusta). This marginal increase is being attributed to slightly higher production in the non-traditional coffee growing areas.

Overall, there’s been a decline of about 15% (60,500 MT) during the post-blossom estimate for the year 2018-19. The post-monsoon arabica estimate showed a decline of about 13% while robusta declined by nearly 17 % over the post-blossom estimate.

Meanwhile, coffee prices globally have dropped to 13-year lows which has had a cascading effect. Indian media reported a decrease in arabica prices at farmgate to $1.95-$2 (INRs136-140) per kilo in early March 2019. In better times, these prices have risen to $2.15-$2.30 (INRs150-160) per kilo (2018) with recent highs of $2.60-$2.85 (INRs180-200) in 2017. The low price is attributed to a global surplus which has set off a chain of events resulting in low investments, fewer inputs, and a poor yield in India.

Adopting technology

In March 2019, a blockchain-based app was launched as a pilot program. Coffee is among the first commodities to be modernized in India. A fairer market, traceability, and therefore a better price, are key objectives. It also eliminates the middleman, giving coffee growers better control, and overall transparency in the value chain, offering buyers a new marketplace.

The 5-point plan intends to:

  • Give growers better control over marketing their produce
  • Deliver access to more efficient price discovery
  • Provide traceability and transparency in the value chain
  • Allow growers and farmers to reach a wider set of buyers
  • Eliminate middlemen in the coffee buying process.

Current preoccupation

While the adoption of tech is seen as a progressive step to benefit the industry, the need of the hour is to rapidly move towards economic sustainability for coffee farmers. Diversifying into other crops, improving quality to get a better price, accessing a transparent marketplace are being pushed into focus. And this despite worrying concerns about the climate, as summer draws to a close.

India has plenty of advantages - the rich terroir, the variety of shade trees, processing mechanisms, effluent control, availability of a skilled labor force. Where Indian coffee has lagged is in better marketing itself, in showing off its legacy, and creating a narrative that will make the world take notice. Araku Valley has begun this storytelling, an interesting lesson for coffee producers from other parts of the country as well.