Starbucks bets on India's cafe revolution, tea culture

STARBUCKS will soon appear on Indian streets as the US group bets on lifestyle changes that are turning the tea-drinking country into a booming market for cafes.

India's appetite for the bitter brew has never been stronger, with its overwhelmingly young population opting to while away time in shiny Western-style cafes instead of the traditional coffeehouses.

Starbucks said earlier this month it will enter India through a tie-up with the country's biggest coffee producer, Tata Coffee, sourcing beans from south India and roasting them locally. The first store is expected in six months.

Arun Bhardwaj, vice president for emerging business at Starbucks, told AFP by email that it was "premature" to talk specifics about the group's strategy, but it is expected to adapt its menu to local tastebuds.

US chains Pizza Hut and McDonald's have "Indianised" their offerings, selling Indian cottage cheese pizzas and spicy potato burgers to woo subcontinental consumers.

Despite its reputation for tea, India has a long-standing coffee-drinking tradition, particularly in the southern state of Tamil Nadu where it is often brewed overnight, then mixed with milk and sugar before being served.

But old-school cafes like the 53-year-old Indian Coffee House chain, which popularised south Indian filter coffee, are now struggling for profit while hipper, Western-style chains are opening outlets every month.

A South Indian filter coffee typically costs as little as 10 rupees (S$0.28) at small restaurants, but increasingly affluent Indians in urban areas are choosing to sip on cappuccinos costing 75 rupees instead.

The change in tastes has less to do with a fondness for Italian espresso, say analysts, and more to do with the social cachet conferred by the beverage in class-conscious India, analysts say. Harish Bijoor, a brand specialist said "unlike tea, coffee particularly espresso-based coffee isn't easy to make.

It takes a lot more preparation, so there's an aura of sophistication around it." But the US coffee giant is far from the first to see the potential in the growing affluence of India's young population.

In addition to the Cafe Coffee Day chain with more than 1,000 outlets, foreign-owned chains Barista Lavazza and Costa Coffee are already present.

Move to standardise CTC tea grades

The Tea Board of India has finally decided to standardise the grades of different types of Crush-Tear-Curl (CTC) tea produced in the country. Of the total tea produced by the country, about 90 per cent is CTC. The Deputy Chairman of the Ta Board Roshni Sen issued a circular on January 20 in this respect. This instruction of the Board will come into effect from March 1 next, said tea industry sources here.

It is expected that implementation of the instruction would be able to bring about uniformity of the CTC teas produced in the country in respect of their grades and would thus augment their marketing.

Assam Tea Planters’ Association (ATPA) chairman AR Kasera hailed the above decision of the Tea Board as a step in the right direction. “It will now remove confusion in the domestic as well as the overseas markets on the matter,” he said.

Tea industry sources said that the issue was under consideration of the Board for quite a long time. The latest decision of the Board came after several rounds of discussion with the producers’ associations, auction buyer associations and six auction organizers.

Now, following the rationalization and standardization of the grades of CTC teas, there will be eight grades of CTC Broken Leaf, three grades of CTC Fanning and eight grades of CTC Dust contrary to the more than 60 existing grades.

It needs mention here that in Kenya, there are only four primary grades and three secondary grades. But due to the different varieties of tea produced by India, it is acceptable to have more grades in India than in Kenya. The Tea Board directive is applicable to all CTC teas manufactured in India and applicable for all routes of marketing – auction and non-auction, said the sources.

In this respect, North Eastern Tea Association (NETA) chairman Bidyananda Barkakoty said that due to the different varieties of tea produced in India it is acceptable to have more grades than Kenya.

Grade of tea with its nomenclature is a tool for identification for the purpose of marketing. Tea is classified into different grades during the manufacturing process. However, confusion very often surfaces among the buyers and sellers on the identification of specific grades for the tea of the same quality.

To remove this confusion, tea grades are now sought to be standardised basing on the two parameters of ‘stainless steel wire mesh size’ and ‘thickness of standard wire gauge,’ said the sources.

Source: The Assam Tribune

Hard Currency Rift Declines Indian Tea Export

The Tea Board of India on Tuesday warned the country that hard currency rifts between New Delhi and Tehran threatens India's export of tea to Iran.

In its latest report, the council announced that the level of export of India's tea in the fiscal year 2010-2011 will reduce by over 10 million kilograms.

Deputy chairman of the board, Roshni Sen, said decline in production is the reason behind the decrease in its export.

It is predicted that this year, India's export of tea will decrease between 8 million kilograms to 10 million kilograms, Fars News Agency reported.

Heavy rainfalls in northern India have adversely affected the quality of tea production in the country. Therefore, it is forecast that India's tea production would amount to 969 million kilograms only this year. Some 70 percent of tea plantations of India are situated in the northern region of the country.

Sen also said, "Although the production of tea in southern India has increased, growth of this production level is not enough to counter reduction of production in the north."

She also said restrictions imposed on trade ties with Iran are another important factor for reduction of India's export of tea.

India exports tea to Egypt, Russia, Iran and Pakistan. Reduction in India's tea export will leave a large impact on the global tea market.

She recalled that at present her country focuses on markets in Russia, Kazakhstan, Iran, Egypt and America, but it also seeks to expand export of tea to Singapore and South American countries. Germany and Japan have also called for importing high quality Indian tea.

The domestic demand for tea in India grows by up to three percent per annum. India uses some 80 percent of its tea production for domestic purposes.

India's crude oil imports from Iran faced an impasse after the Reserve Bank of India declared that a regional clearinghouse that involved the Iranian central bank could no longer be used to settle oil and gas transactions between the two countries.

Indian oil industry officials are keenly awaiting a solution as India imports 80 percent of the 184 million tons of crude oil it refines every year, and Iran accounts for 16 percent of these purchases, making it the second-biggest supplier, after Saudi Arabia, Economic Times reported. The dispute has not yet been resolved.

© Iran Daily 2011