Tata Coffee, Starbucks bean supply deal may extend to offshore markets

Bangalore | Updated on February 05, 2011


The ‘non-binding' agreement that Tata Coffee signed with iconic brand Starbucks in January this year for supplying coffee beans to the global major could also include supplying beans to the latter's operations in other Asian markets.

Mr M. D. Kumar, Executive Director, Finance, Tata Coffee Ltd, told Business Line that a “whole lot of things can come out of the deal.”

“As a roaster-grinder, our credibility as bulk operators in the instant coffee market has already been established,” he said.

Tata Coffee's instant coffee output at its two plants in Coorg is about 5,000 tonnes a year, with more than 90 per cent of the output exported. The company's major markets are South-East Asia, Russia, Japan, Korea and CIS. Tata Coffee also expects to reach full capacity production of 6,000 tonnes next fiscal.

Tourism foray

Tata Coffee is also now tapping into the tourism segment based on the rising international interest in coffee and the way it is grown. It recently launched Plantation Trails, a heritage tour of its plantations and bungalows.

“There is a lot of potential in the segment, but it's early days and we would get results only in 2012-13 fiscal,” Mr Kumar said.

In its Q3 results this fiscal, Tata Coffee reported a twelve-fold increase in net profits to Rs 32.83 crore, from Rs 2.72 crore in the corresponding period last year. Revenues, year-on-year, were at Rs 350 crore from Rs 305 crore .

Tata Coffee is Asia's largest coffee plantation company and the third-largest exporter of instant coffee in the country. It produces more than 10,000 million tonnes of shade grown Arabica and Robusta coffees at its 19 estates in South India.

Published on February 05, 2011

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