K. A. Ananthram

In a sequence of articles chronicling the Tata Coffee story, K. A. Anantharam looks at the past, present and future of the largest integrated coffee company in the world — from its origin to its traditions, from the challenges it is overcoming to its plans for the future

The narrow winding roads are enveloped on either side by grand swathes of green and they provide more than one sight to behold. This is the Coorg district in Karnataka state, coffee country at its lushest and a region dotted with plantations bearing tongue-twister names like Pollibetta, Wosnullagottay, Karadibetta and Taneerhulla.

This is a world still virgin in many ways. The air is pure and the silence so sharp it takes a visitor’s breathe away. The tranquillity is stirred intermittently by the chirping of birds and disturbed occasionally by the proud trumpeting of elephants roaming the forests and estates. For a city-dweller like me, it is a lifetime experience.

The idyllic and sylvan environs have fostered a leisurely way of life in these parts — with one exception. Situated here are the offices of Tata Coffee Limited, a company that is working overtime to register the Tata stamp across the coffee-drinking world. In the words of Harish Bijoor, the company’s vice-president (marketing), "Our aim is to promote the Tata Coffee brand across the entire value chain, from seed to end-product."

The origins of Tata Coffee lay in the history of coffee cultivation in India (see: Coffee in India). As the commercial exploitation of coffee by the Britishers in this country spread, scores of small coffee plantations merged to become larger, more viable entities. One such was Consolidated Coffee Estates Limited, created from the merger of two of the larger British-owned estates, Pollibetta Coffee Estates Limited and Coorg Coffee Estates Company Limited.

The Consolidated Coffee Company (CCC), in its Indian avatar as the precursor to Tata Coffee, was the creation of Ivor Bull, an enterprising and brilliant Britisher. His abiding faith in India, despite the growing uncertainties of World War II and the surging independence movement, led him to form this enterprise with close friends from India. CCC took over the assets of the erstwhile Consolidated Coffee Estates and began a new chapter in its affair with coffee.

From early on, CCC laid emphasis on bringing together a large number of coffee estates and building around them support units that would ensure maximum efficiency. The company was also at the forefront of modern farming techniques and introduced the concept of interspersing coffee farming with crops like pepper, orange, cardamom, paddy and arecanut.

The multi-crop development enabled the company to stabilise its income streams by spreading the risks that horticultural crops usually have to live with. Over the years the company came to be the largest integrated coffee enterprise in Asia (see: All the tasty moves).

The Tata Group’s association with coffee began in 1990, when it acquired a controlling interest in Consolidated Coffee Limited through Tata Tea, the largest integrated tea company in the world. The entry of the Tata Group brought a sea change to the company’s functioning. Consolidated Coffee, later renamed Tata Coffee, was exposed to the branding process. Most importantly, the company’s employees, who number 10,000 today, were encouraged to be more innovative in their thinking process.

The Tata Group, as the single largest corporate player in the coffee industry, has played a major role in freeing the coffee economy from the shackles that had limited its growth since 1952. Conscious efforts by the Tatas made the government see reason and led to the removal of the burdens under which the industry was operating for several decades.

Tata Coffee could now shift its focus to quality, build up a brand and secure better value for its produce. This freeing was a clear move away from the ‘pure plantation’ approach to the business — where the company just produced coffee for the Coffee Board — to actually stamping its mark across the entire value chain.

Tata Coffee’s entry into the branded world has been slow and steady. It made its first breakthrough in 1993, when its maiden branded coffee powder (Coorg 100%) was launched. This was a pure coffee powder and it grabbed nearly 11 per cent of the market within two years of launch. The company added other brands to its stable over the next few years but its branded presence has largely been confined to south India.

In the high-value instant coffee market, the company introduced Tata Café. Despite being fast off the block, the brand has not made much headway in the face of competition from two leading multinational companies. Instant coffee is a slow-returns market, and the two multinational companies, who have been around for decades, are now reaping benefits from the investment losses they sustained while seeding the market. Tata Coffee is further handicapped by the fact that it cannot sustain losses beyond a point. As a result, the company has been slow in pushing Tata Café.

                                                    go to page 2