Vending machines, gourmet cofee to boost domestic consumption

Players in coffee expect domestic coffee consumption to rise to one lakh tonnes from the current 75,000 tonnes. They expect to pep up the current slow growth of 4,000-5,000 tonnes per year by promoting gourmet coffees and vending machines in offices and public places.

With entrants in the cafe business taking up propagation of gourmet coffees and some players installing coffee vending machines in ITPO offices, consumption is expected to touch 90,000 to 95,000 tonnes by 2006 and one lakh tonnes by 2007.

illy cafe, which recently tied up with Fresh and Honest, is betting big on the domestic coffee business, especially gourmet coffees and vending machines segments.

Andrea Illy, chairman of Illy Caffe, who was in India to give away the coffee awards, had said his company was chalking out a detailed plan to increase domestic coffee consumption. "India is in a similar position like US which faced prolonged stagnation some years back and suddenly took off through gourmet coffees launched by new entrants in the business," he added.

India is now ripe for a similar take off and this may trigger domestic coffee consumption exponentially. "Through these new segments there is a strong potential to boost coffee consumption in India," he said.

Also, illy Cafe, jointly with Fresh and Honest, has plans to install 6,000 vending machines in the country. Details of installing these vending machines are being worked out by both the companies. Presently, Nestle and Hindustan Lever lead in installation of vending machines, followed by Tata Coffee.

To garner a share of the high-end consumption segment, Tata Coffee is also brewing initiatives in instant coffees, specialty coffees, estate origin coffees and vending machines to boost consumption.

"Tata Coffee, with 8,000 vending machines, plans to increase this by 20 per cent this year," said M H Ashraff, managing director, Tata Coffee.

Many companies are presently coming out with their own initiatives to garner a share of the market. This has come after a prolonged stagnation between 50,000 tonnes and 55,000 tonnes from 1990 to 1999. This was replaced by a healthy growth from 2000 onwards, said G V Krishna Rau, chairman, Coffee Board.