Business Today

Smelling the Coffee

Three start-ups now cater to the connoisseur seeking freshly roasted and ground coffee.
Kaavya Chandrasekaran        Print Edition: Sep 15, 2013

Matt Chitharanjan and Namrata Asthana love a good cup of coffee.

So much that the couple have started a coffee business in Gurgaon. The pitch is simple: buy single estate green coffee beans, roast them, grind them, and sell fresh coffee powder online. The magic to a good cup of coffee is in the roast (when the oils and fragrance are released) and the way they are ground (to a grain size best suited to how you make your coffee - on a drip filter, a percolator, a French press, a moka pot, or the nouveau AeroPress).

Blue Tokai Coffee Roasters, Chitharanjan and Asthana's start-up, knows the science, and dispatches the coffee it grinds within 24 hours of roasting. "The flavour of coffee deteriorates, the chemistry changes within two weeks of roasting," says Asthana. Blue Tokai packages carry the roasting date. The coffee roaster even offers a subscription for biweekly deliveries of 250 gm packs to regulars who value freshness of their morning caffeine kick. Also on offer at www.bluetokaicoffee.com is coffee equipment like the AeroPress or a cold brew pot.

Asthana takes pride in the fact that Blue Tokai - Tokai meant the tail of a peacock in ancient Malabar, north Kerala, where the British are said to have seen the bird for the first time - spreads knowledge about coffee plantations in Karnataka and the Nilgiris district. "Nobody talks about the farm. But all the credit should go to them," says the former communications consultant, adding most high quality beans from those farms get exported.

Blue Tokai opened for business about seven months ago and today processes orders of some 300 kg a month. The total investment has been under Rs40 lakh sourced from the promoter-duo's savings and their families. Most of that money has gone into a coffee roaster called Probat that costed Rs22 lakh.

But the journey hasn't been all that smooth. Logistics is the biggest challenge. "We have to keep working with other companies - from making the cardboard boxes to pouches. This hasn't been easy because we want to provide the customer the best experience possible," says Chitharanjan. They finally settled on Fedex - because "for a small business it's difficult to get a good rate". Fedex, which provided the best rate for them, charges Rs80 on each order for delivery. They also ship to the US. Blue Tokai's future strategy involves organising coffee events, acquiring more restaurant clients and opening a café a year or two from now.

Chitharanjan and Asthana are not pioneers in the online coffee business. Kunal Ross, who started The Indian Bean in October 2012 from Versova in suburban Mumbai, says he got the idea of starting an online roaster since fresh ground coffee is on a decline. "The independent roaster culture is dying, where coffee is roasted on the same day. If coffee is bought from independent farmers and is going abroad, why doesn't the Indian consumer benefit?" he asks. He says he felt a void in the coffee space and that there was no innovation in the fresh coffee market. "Every two or three months we get a new coffee and a farm on board." Ross packages humour while selling: coffee from a Kodaikanal estate is named Frowners because a leading farmer on the estate is always grumpy. Other names on www.theindianbean. com - appa, 5000 ft and Watapi - sell for between Rs270 and Rs450 for a 250 gm pack.

The Indian Bean's process of roasting, grinding and packing takes place in Mysore. Operating costs are lower in a smaller city and Mysore has a good network for farmers. The chemical analysis test also gets done at the Central Food Technological Research Institute in Mysore. Ross emphasises the need for good packing so that there is no further interaction with the air. "You need to keep it away from oxygen, like anything else it reacts and most of the aroma will go," he says, adding logistics was a big challenge for him as well.

 Sahil Jatana, Founder, The Coffee Coach
We provide complete solutions for the amateur coffee drinker: Sahil Jatana, Founder, The Coffee Coach Photo: Rachit Goswami/www.indiatodayimages.com
The Indian Bean's investment has been around Rs24 lakh since it started. It aims to make more than Rs1 lakh in monthly revenue by September this year.

Barely eight km away in Oshiwara in central Mumbai, Sahil Jatana launched The Coffee Coach in July 2011 after conducting a series of coffee brewing workshops for amateurs. He says that the three players do not see each other as competitors. "We exist in harmony, a perfect co-existence." Each has its own forte. The Coffee Coach takes pride in that it provides coffee and equipment at an affordable price. Coffee retails from Rs299 a 250 gm pack that comes with an air seal and French presses start at Rs399. "We provide complete solutions for the amateur coffee drinker," Jatana says. The site - www.thecoffeecoach. in - receives an average 800 to 1,000 visitors per month of which 20 per cent gets converted into sales.

But will the online business model work in coffee? Some aren't very sanguine. Keshav Devan of Devan's Coffee, a specialist retailer in south Delhi that is the go-to destination for coffee aficionados in the city, thinks it is a very niche market. He speaks of the challenges: "Online has a problem of delivery, to be precise the delivery front is a big expense. And it is a big pinch for the consumer's pocket."

Still, the three players remain gung-ho. And, they have support from Café Coffee Day, the big daddy of coffee cafes in India. Says its President of Marketing, K. Ramakrishnan: "In India, our per capita coffee consumption is 82 gm while it is four kg in the US and six kg in Europe. So, a large portion of demand extends to the online space." The chain, too, sells coffee powder on the Internet and counts its Dark Forest brand the top-selling coffee online.

Kunal Ross, Founder, The Indian Bean
The independent roaster culture is dying: Kunal Ross, Founder, The Indian Bean Photo: Rachit Goswami/www.indiatodayimages.com
This optimism resonates with Jawaid Akhtar, Chairman of the Coffee Board of India. But it will ultimately depend on how the online roasters build their credibility. "It has to meet the requirement for the consumer - timely delivery, ease of payment and most importantly, maintain quality and freshness," he says.

It's early days but the online coffee merchants are getting custom even from upcountry India. Anand Kothari is Blue Tokai's regular customer from Saharsa, Bihar, where he works for Bihar Rural Livelihoods Promotion Society, an independent society set up by the state government and supported by the World Bank. "Fresh coffee is just better than other kinds of coffee. The marketplace here is small and access to good and high quality coffee is otherwise difficult," he says. He compares the online roaster to coffee retailer Lavazza which he says is more expensive, and prefers to brew his cuppa in a French press he recently bought at Starbucks on a trip to Mumbai. That's a toast to the online coffee roasters.

Additional reporting by K.R. Balasubramanyam

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