Coffee Market – India March 2011

Executive Summary

Market


The organized coffee market in India is estimated to be worth X bn in 20-
Karnataka accounts for ~X% of India’s total coffee production
Changing consumer lifestyles, increasing urbanization and higher frequency of eating out has fueled growth in the market

Drivers: Drivers & Challenges

Trends

Competition

E L P M A S


Rising demand for ready to drink (RTD) coffee
Export promotion schemes for coffee
Favorable demographics
Growing disposable income

Challenges:
Harmful to human health
Large number of licenses to be acquired


Global players foraying into the Indian market
Investments made by PE players indicates industry potential
Emergence of Organic Coffee
Growth of Franchising of emerging coffee retail shops
Brand expansion into smaller cities
Indian coffee retail market is dominated by global players, specially in the organized coffee retail segment
Two major domestic players dominating the market are Company 1 & Company 2

COFFEE MARKET IN INDIA 2011.PPT

2

•Market Overview •Foreign trade
Export
Import

•Drivers & Challenges •Trends •Competition •Key Developments

COFFEE MARKET IN INDIA 2011.PPT

3

Southern states like State 1 and State 2 dominate coffee production in India Production – Overview

Size & Growth – Volume

• Coffee production in India is growing slowly

Arabica

• Although the production gets hampered due to delayed and inadequate pre-blossom showers across the growing regions in South India

400

E L P M A S

• Southern parts of India account for the major share in coffee production

Robusta

‘000 mt

300

+Q% d

e

x

x

x

y

y

y

y

2007-08

2008-09

2009-10

a

b

c

x

x

y

2006-07

200

• The largest producers include State 1 and State 2

• Karnataka accounts for ~X% of India’s total coffee production


Production in the state is estimated to rise to XX tonnes in 20--, up from XX tonnes in 20-
State 2’s production is estimated to be XX tonnes in 20XX,up from XX tonnes in 20--

100 0

2010-11e*

State-wise Segmentation

• However, the production is hampered sometimes due to pest attacks also • The organized coffee market in India is estimated to be worth XX bn in 20--

State1

C%

State 2

D%

State 3

B%

Others

A%

Source: COFFEE MARKET IN INDIA 2011.PPT

4

Drivers & Challenges – Summary

Drivers

Challenges

Rising demand for ready to drink (RTD) coffee

Harmful to human health

Export Promotion schemes for coffee

Large number of licenses to be acquired

Favourable demographics Growing disposable income

COFFEE MARKET IN INDIA 2011.PPT

5

Trends – Summary

Global players foraying into the Indian market

Brand expansion into smaller cities

Key

Investments made by PE players indicates industry potential

Trends

Growth of Franchising of emerging coffee retail shops

Emergence of Organic Coffee

COFFEE MARKET IN INDIA 2011.PPT

6

The market is highly competitive with a large number of Indian and foreign players Overview

Indian Coffee Marketing System

• Market is highly competitive with a large number of Indian and foreign players

Coffee Marketing System

E L P M A S

• Growing trend of consumption of different varieties of coffee and increasing brand consciousness has led to the increase of global player footprints • Indian coffee retail market is dominated by global players, especially in the organized coffee retail segment

• Organized modern formats like malls and supermarkets have also become a favorite destination for the outlets

Route 3

Market share (20--)

• Master companies are readily tying up with small franchisors and mall owners to promote their brand • In order to reach a larger younger audience, players are opening chains of outlets outside colleges, institutions, petrol pumps and highways

Route 2

Route 1

Company 1 Company 2

Z%

Others

Y% X%

Source: COFFEE MARKET IN INDIA 2011.PPT

7

Major Coffee Players in India (1/8) Company Snapshot: Company 1 Corporate Information Headquarters

City 1

Founded

19--

Financial Performance Revenue

Revenue INR bn 80

d

Product 1

a

40

b

6 4

20

Key People

Person 1

10 8

c

60

Products

Profit INR bn

Profit / Loss

2

0

0

2007

2008

2009

2010

Business Highlights • Is a subsidiary of xx

E L P M A S

• Export sales at xx mn, have decreased by x % in value terms, mainly due to the shift in composition of instant coffee exports to xx, from retail to bulk packs • Company makes efforts to facilitate out of home consumption and has increased the number of “x“ • Offers various varieties of coffee under the brand name Nescafe, such as Product A, Product B

Source: COFFEE MARKET IN INDIA 2011.PPT

8

Thank you for the attention The Coffee Market – India report is part of Research on India’s Food & Beverage Industry Series. For more detailed information or customized research requirements please contact: Gagan Uppal Gaurav Kumar Phone: E-Mail:

+91 22 4098 7530 [email protected]

Phone: E-Mail:

+91 33 4064 6214 [email protected]

Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on

About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. COFFEE MARKET IN INDIA 2011.PPT

9